UPDATE 3-Restaurant Brands results beat estimates on strong sales at Burger King, Tim Hortons
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By Deborah Mary Sophia
Feb 13 (Reuters) - Restaurant Brands International beat Wall Street estimates for quarterly results on Tuesday, lifted by signs of a turnaround at its Burger King business and robust demand at coffee chain Tim Hortons.
Burger King in September 2022 set the ball rolling on a revamp that included remodeling stores and tailoring marketing to draw more younger customers to boost sales amid intense rivalry with McDonald's.
Cheaper snack items at Burger King such as the Crispy Wraps and deals like the '$5 Duo' meal have also attracted American diners seeking affordable meal options when household budgets remain under pressure from inflation.
Total same-store sales at Burger King rose 6.3% in the quarter, beating estimates of a 5.87% increase, per LSEG data.
"(Burger King showed) nice improvement across the board ... We're in the earlier innings (of the turnaround) here, but it's encouraging to see that the things the company is saying are showing up in our actual checks with operators," said Stephens analyst Joshua Long.
"Perhaps this is the beginning of an era where Burger King can step it up and narrow the gap (with McDonald's)," he added.
Meanwhile, steady demand for cold drinks, donuts and breakfast bundles at Tim Hortons drove a same-store sales growth of 8.4% in the three months ended Dec. 31 at the coffee chain, against expectations of 4.36%.
Still, Restaurant Brands, like other fast-food majors including McDonald's, signaled pressure on its international business due to the Israel-Hamas conflict.
Comparable sales growth in Restaurant Brands' international segment slowed to 4.6% from 10.5% a year earlier.
Total revenue at the company, which also owns the Popeyes fried chicken chain, rose 7.8% to $1.82 billion in the fourth quarter, edging past analysts' average estimate of $1.81 billion.
Excluding items, Restaurant Brands earned 75 cents per share, exceeding estimates of 73 cents. (Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)
