An IPO company has delivered a bumper quarterly result, and its shares are up 2.5 percent after the issue. That’s saying a lot in these troubled times for newly listed public companies.
Burger King Worldwide Inc (NYSE:BKW) rode a huge expansion in its menu to a quarterly profit that vaulted 60 percent. It went public just last month.
Net earnings rose to $48.2 million (14 cents a share) compared to $30.2 million (9 cents a share) last year, and beat the consensus estimate of $45.6 million (13 cents a share).
Barron’s Mailbag June 1962: Irving Kahn On False Comparisons
The following letter from Irving Kahn appeared in the June 25, 1962, issue of Barron’s. Irving Kahn wrote to Barron's criticising the publication’s comparison of the 1962 market crash to that of 1929. Irving Kahn points out that based on volume and trading data, the 1962 decline was a drop in the ocean compared to Read More
Total revenues however, fell to $540.8 million from $595.4 million, and missed estimates of $570.2 million. Though the strong dollar dampened overseas results somewhat, galloping growth of over 10.5 percent in regions such as Latin America and the Caribbean more than made up for it. The company has a huge thrust on expanding overseas – over 80 percent of its new store openings have taken place in Europe, the Middle East and Africa. The company is also seeing traction from the revamp and remodelling of its restaurants in the U.S. and Canada.
What really did the trick for Burger King Worldwide Inc (NYSE:BKW), was a completely revamped and expanded menu, the largest ever in its history, and a new-found focus on health and quality ingredients. Introductions such as smoothies and snack wraps helped established sales leap 4.4 percent. The fast food chain benefited by emulating rivals, McDonald’s and Wendy’s, to ride this new trend.
Burger King Worldwide Inc (NYSE:BKW) had been taken private for $3.26 billion about two years ago by 3G, a private equity firm that had investors such as Brazilian billionaire, Jorge Paulo Lemann, and other Brazilian investors.
3G later sold a 29 percent stake to a British investment firm, Justice Holdings. Justice was founded in February 2011 by activist investor Bill Ackman, private equity player Nicolas Berggruen, and Martin E Franklin. Ackman took on the stake, as he was impressed with Burger King’s predictable revenues and growth in free cash flow. The deal made it possible for the fast food chain to be again listed on U.S. exchanges. At the time, Burger King Chief Financial Officer, Daniel Schwartz, said, “We believe it is the right time for Burger King to be publicly traded in the U.S. again. With this transaction, we are positioning the Burger King brand for long-term growth both domestically and internationally, and are excited to take this next step in delivering on our strategic objectives.”