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Restaurant Brands Hit by Burger King’s Sales Miss, Staff Woes

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By Dhirendra Tripathi

Investing.com – Restaurant Brands stock (NYSE:QSR) fell 4% Monday after the company’s third-quarter revenue fell short of expectations on a combination of factors ranging from the Delta variant of coronavirus keeping customers home to more aggressive competition.

July through September total revenue rose to $1.49 billion from $1.33 billion in the 2020 quarter. Analysts had estimated it to come in at $1.52 but sales were weaker as the Delta variant spread and sales fell short of expectations at its Burger King restaurants.

The company said certain markets continue to be affected, and it expects local conditions to continue to dictate limitations on restaurant operations, capacity, and hours of operation.

It said it expects to see a continued impact from Covid-19 on its results in 2021 and will invest more in its digital and marketing capabilities. For most retailers, while online sales have come off from the pandemic-time elevated sales, they continue to be higher than the pre-pandemic period, suggesting the online embrace is here to stay.

Adjusted profit rose around 10%, to $353 million.

Burger King has tried to compete with rivals like McDonald’s (NYSE:MCD) but the effort has faced challenges, and not just from competition. Its newly launched hand-breaded chicken sandwich is considered a labor-intensive product, a tough proposition to straddle at the time of staff-crunches and higher salaries.

On its part, McDonald’s has toyed with its menu and been more aggressive with campaigns, collaborating with popular South Korean boy band BTS to pull in customers.

Same-store sales at coffee chain Tim Hortons, the biggest revenue-maker out of Restaurant Brands’ three brands, jumped around 9%, while Burger King’s rose nearly 8%.

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