Burger King Worldwide Inc (NYSE:BKW) posted a higher first quarter profit as cost cutting measures compensated for weak U.S. sales. On Friday, the fast food company reported that global sales at established locations gained 2%, while in U.S. sales were up only 0.1%.
Rivals also suffered lower U.S. sales
For the quarter, Burger King Worldwide Inc (NYSE:BKW) earnings came in at $60.4 million, or 17 cents per share. Excluding one-time items the earnings were 20 cents per share, which were a penny more than the consensus estimate. Revenue for the quarter was down to $240.9 million compared to the consensus estimate of $241.3 million. Also, for the second quarter, the board of directors declared a quarterly dividend of $0.07 per share, payable on May 27 to shareholders of record on May 12.
For the first three months of 2014, other fast food chains including McDonald’s, Taco Bell and Dunkin’ Donuts also posted weak U.S. sales. However, Chipotle and Starbucks were able to produce reasonably strong sales gains.
Severe winter affected Burger King numbers
Alex Macedo, president of Burger King’s North American operations, said, “It’s very difficult to estimate what is really the weather impact and what is performance.” Macedo added that numbers were somewhat affected by the weather.
Despite the severe winter witnessed by many of the regions, Burger King Worldwide Inc (NYSE:BKW) was able to post marginal improvement in U.S. and Canada comparable sales growth owing to the strategy of introducing fewer but “more impactful products.” The fast food giant also worked on delivering attractive value at the $1 price point, and came up with our KING DEALS(R) value menu, which included all new items like the Rodeo Chicken Sandwich and Rodeo Burger.
Since its acquisition by investment firm 3G Capital in 2010, Burger King has been making efforts to lower its costs. 3G Capital, based in Brazil, took the Miami-based chain public again in 2012 along with introducing a redesigned menu and a heavy marketing program.
Since going public, Burger King Worldwide Inc (NYSE:BKW) has come up with many new items for its U.S. customers, including lower-calorie fries called Satisfries and other products similar to those at McDonald’s.
As of 11.16 AM EDT, Burger King Worldwide Inc (NYSE:BKW) shares were up 1.05% to $26.05. For the year to date, BK shares have gained 14.51%.