Burger King Owner Misses Estimates as Tim Hortons Sales Slip

(Bloomberg) -- Burger King-owner Restaurant Brands International Inc. fell after reporting first-quarter earnings that missed analysts’ estimates amid an unexpected decline in sales at its Tim Hortons chain.

• Same-store sales, a key performance metric for restaurant companies, fell 0.6 percent at Tim Hortons. Analysts had projected growth of 1.9 percent, according to Consensus Metrix. Restaurant Brands’s earnings per share of 55 cents was 3 cents lower than the average projection.

Key Insights

• While Tim Hortons has been pushing all-day breakfast, it has faced stiff competition in the morning, with McDonald’s Corp. boosting advertising of egg sandwiches and McCafe drinks.
• Burger King is healthier, with same-store sales growth of 2.2 percent beating estimates. The chain’s tech push is helping it capture more diners that are looking for convenience. The chain is adding self-order kiosks and digital menu boards, along with offering discounts and coupons for its mobile app.
• Restaurant Brands is pushing big in China, where other chains are also ramping up growth. Burger King is opening more stores there, while Tim Hortons has opened three in that market, with plans for more than 1,500 in China over the next decade.

Market Reaction

• The shares dropped as much as 3.3 percent in New York. The stock had climbed 27 percent this year through Friday’s close, outperforming McDonald’s, which had gained 11 percent.

Related Story: Burger King Plans to Take Its Vegan Whopper National This Year

Get More

• For more on the results, click here.
• For the statement, click here.

--With assistance from Karen Lin.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Thomas Mulier, Craig Giammona

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