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Restaurant Brands CEO explains how Burger King plans to rebound in the U.S.

·Anchor, Editor-at-Large
·2 min read
In this article:
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Burger King has put up a stretch of lukewarm sales domestically, and the parent company's CEO tells Yahoo Finance Live that a turnaround is being grilled up with new leadership and a better menu.

The Restaurant Brands-owned Burger King saw U.S. same-store sales fall 0.5% in the first quarter following a 1.8% increase in the fourth quarter. Looked at another way, this could be seen as sales stabilizing after several challenging quarters.

"It's not a victory lap. For us, growth and leading the industry is the goal," Restaurant Brands CEO Jose Cil said (video above). "We want to create gaps, not close them. It's a starting point of the turn. What we are doing is focusing on the core iconic product of Burger King, the Whopper. We removed it from our core discount platform, the 2 for $6. We brought new items into that platform, reduced the price for 2-for-$5 and highlighted the Whopper as it should be, as a core iconic flagship product of Burger King. We brought in Whopper melts and are limiting our messaging to fewer, but more impactful messages and promotions."

A paper crown is seen at a Burger King restaurant. REUTERS/Jorge Silva
A paper crown is seen at a Burger King restaurant. REUTERS/Jorge Silva

The efforts already appear to be taking hold overseas.

The burger brand's "rest of the world" same-store sales surged 20.1% in the first quarter, marking the quickest pace of sales growth out of any of Restaurant Brands' fast-food banners — which include Tim Horton's, Firehouse Subs, Popeyes.

Here's how Restaurant Brands performed compared to Wall Street estimates for the first quarter:

  • Net Sales: $1.45 billion vs. $1.41 billion

  • Adjusted Operating Profits: $530 million vs. $537.8 million

  • Diluted EPS: $0.64 vs. $0.62

Wall Street is staying hopeful about the fast food chain's U.S. business turnaround.

"As it pertains to the quarter itself, we found results to be largely in line with investor expectations across the brands; with the standout item coming in the form of the Burger King rest of world same-store sales result which represented a significant sequential acceleration across its multi-year comp stacks," Deutsche Bank analyst Brian Mullan said.

The analyst — who reiterated his buy rating on Restaurant Brands shares — said the company's getting back to basics efforts are now entering phase two.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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