Cheap Breakfast Swings Burger King to Profit
Burger King Holdings, the world's No. 2 hamburger chain, Friday posted a better-than-expected quarterly profit, helped by longer store hours and its low-cost breakfast menu.
The company, whose shares rose as much as 4% in early electronic trading, said fourth-quarter net profit was $36 million, or 26 cents per share, compared with a loss of $10 million, or 8 cents per share, a year ago.
Excluding costs related to a lease termination, adjusted earnings were 29 cents a share. On that basis, analysts expected 27 cents a share, according to Reuters Estimates.
Miami-based Burger King said revenue rose 11% to $590 million.
Same-store sales, a key industry measure that tracks sales at restaurants open at least 12 months, rose 4.4% worldwide and 4.8% in the United States and Canada.
Burger King recently introduced a lower-priced "Value Menu" that has helped it compete with McDonald's Dollar Menu and Wendy's International Super Value Menu.
The company also introduced a breakfast version of that menu in February, seeking to challenge McDonald's dominance in the early morning hours. During the quarter, Burger King said it expanded restaurant hours at many of its U.S. restaurants.
In July, the company said all of its U.S. restaurants would be using frying oil free of artery-clogging trans fats, by the end of 2008.
Burger King also said it continued to pay down debt, as part of its efforts to spruce up its balance sheet.
Its shares were up 3.6 % at $25.81 in premarket trading on the New York Stock Exchange.