Burger King, Tim Hortons owner's profit beats on new offerings

Restaurant Brands International, the owner of Burger King and the Tim Hortons coffee and doughnut chain, reported a better-than-expected quarterly profit as menu items such as Burger King's new flavors of chicken fries boosted sales.

Comparable sales — sales at established stores — at Tim Hortons rose 6.3 percent in the fourth quarter, excluding currency impact, helped by strong demand for products such as Nutella pockets and grilled wraps.

Burger King comparable sales increased 3.9 percent, excluding currency impact, helped by new flavors of chicken fries, a new "2 for $5" offer and a pitch-black burger that the company launched for Halloween.

Analysts had estimated comparable sales growth of 3.9 percent for Tim Hortons and 3.8 percent for Burger King, according to Consensus Metrix.

Restaurant Brands competes with burger chains such as McDonald's Corp and Wendy's Co, who have also been adding new items to lure customers back. McDonald's has a new all-day breakfast offer, while Wendy's latest promotions include a "4 for $4 meal."

Net profit attributable to Restaurant Brands' shareholders was $51.7 million, or 25 cents per share, in the quarter ended Dec. 31, compared with a loss of $510.8 million, or $2.50 per share, a year earlier. The year-ago quarter was hurt by merger costs.

On a proforma basis, accounting for the merger of Burger King and Tim Hortons that closed in December 2014, net loss attributable to shareholders was $3.1 million, or 2 cents per share, last year.

Excluding items, Restaurant Brands posted a profit of 35 cents per share, beating the average analyst estimate of 29 cents, according to Thomson Reuters I/B/E/S.

In the latest fourth quarter, revenue more than doubled to $1.06 billion, but fell slightly on a pro-forma basis.

Tim Hortons signage is displayed in the window of a restaurant in downtown Vancouver, British Columbia, Canada.
Ben Nelms | Bloomberg | Getty Images
Tim Hortons signage is displayed in the window of a restaurant in downtown Vancouver, British Columbia, Canada.

In early February, Burger King revealed that it would add Grilled Dogs as a permanent item to its menu, an attempt to make "the Whopper of hot dogs," according to its president of North America operations, Alex Macedo.

Burger King is trying to take a bite out of an enormous business. Americans eat more than 20 billion hot dogs every year, according to the National Hot Dog and Sausage Council. The burger chain partnered with Kraft's Oscar Mayer to make the hot dogs. 3G Capital controls both companies.

In October, Restaurant Brands International's profit soared in the third quarter, fueled in part by the revival of Burger King's Chicken Fries.

— CNBC's Sarah Whitten contributed to this report.