Burger King 3Q net falls 24%
Strong international results drove modest same-store sales growth for Burger King Holdings Inc. in the third quarter, but higher interest on debt took a toll on profits, the company said Wednesday.
The nation’s No. 2 quick-service burger chain said systemwide same-store sales grew by 1.6 percent for the quarter, based largely on a 10.5 percent increase in same-store sales in Latin America and a 3 percent hike at units in Europe, the Middle East, Africa and Asia Pacific.
Same-store sales for locations in the United States and Canada were relatively flat, the company said.
Net income declined 24 percent to $48.1 million, compared with $63.4 million the same quarter last year. The company blamed the drop on a significant increase in interest expense as a result of the company’s debt restructure as well as the positive impact last year of the company’s sale of its entity in the Netherlands.
Revenue for the quarter was $608.1 million, a 1.4 percent increase from $600 million in the third quarter last year.
The company said adjusted earnings before taxes, depreciation and amortization increased by 39 percent, marking the strongest such increase since the Miami-based chain was acquired by investment firm 3G Capital Management LLC in 2010.
Daniel Schwartz, BK Holdings’ chief financial officer, said in the United States the chain would “remain focused on enhancing our menu, improving our restaurant image, streamlining operations and revamping our marketing communications process to appeal to a broader consumer base and drive profitable growth.”
The brand has 7,523 locations in the United States and Canada.
Burger King added 59 restaurants globally during the quarter, mostly overseas, while 35 company locations in the United States and Canada were refranchised.
At the end of the quarter, the Burger King chain included 12,400 locations in 79 countries and territories worldwide.