Burger King posts a whopper of a quarter
August 21, 2008 by Tisa Silver
Filed under Finance
Burger King had a whopper of a quarter!
The fast food giant posted a 42 percent increase in profits for the fourth quarter, which ended on June 30. Same store sales were up 5.3 percent worldwide, right behind McDonald’s which posted a same store sales increase of 6.1 percent.
BK has made some major adjustments in the past year. BK added 110 new stores worldwide and extended hours at domestic locations to compete for the dollars of early birds and late night diners.
BTW, the chain announced the extended hours with a commercial campaign starring music mogul Sean P. Diddy…Puff Daddy, whatever his name is… Combs ;) BK also had a Whopper tied to the latest installment of the Indiana Jones movie machine.
In spite of the good news, some analysts are focusing on costly renovations and higher food prices that ate away at the company’s margins. So, even though the King beat Wall Street’s estimates, shares are trading down 7.5 percent.
Hi Prof.Silver- hope you’re enjoying the rest of the summer.
Anyways, I’m just doing a bit of late-night browsing of conference calls/transcrips (my normal Friday nights now, haha). I always get a laugh when CNBC brings up the “whopper indicator” vs. inflation. I saw the most recent segment with CEO Chidsey saying they’ve been very conscientious about food prices in developing new products for the menu.
I also found it interesting that BKC is 90% franchise owned- I did not know that at all. I’m guessing that should help hedge commodity costs for the corporation.
That being said, I’m surprised it took as hard of a shot that it did after reporting on Thursday. I guess technically speaking, its bullsih to have bounced off support levels with a $25-handle (double bottom 3month).
A few of the tv pundits have recommended buying MCD recently; just seeing if you had any take on the risk/reward of buying MCD versus, say, a BKC or WEN?
Thanks for the post!