News
Burger King comps impacted by winter weather
March 8, 2010
Burger King Holdings Inc. has announced that U.S. and Canada segment same-sales were severely impacted during the months of January and February 2010 by adverse weather conditions in the Central and Eastern portions of the United States. More than 75 percent of the segment's company- and franchise-owned restaurants are located in those regions.
The U.S. and Canada segment reported comps declines of 8.2 percent in the two-month period ended Feb. 28, compared to positive 3.1 percent in the same period last year. Based on its analysis, the company believes inclement weather negatively impacted January and February U.S. and Canada company comps by approximately 3.0 percentage points during the period. Therefore, the company expects third-quarter fiscal 2010 U.S. and Canada total revenues, company restaurant margin and income from operations to be lower than the prior year period.
Worldwide comparable sales for the two-month period ended Feb. 28 were down 5.4 percent, partially offset by positive results in the EMEA/APAC business segment, compared to worldwide comparable sales growth of 2.5 percent in the prior year period.
Company comps growth for the two-months ended Feb. 28 include:
- United States & Canada, down 6.1 percent
- EMEA/APAC, down 4.9 percent
- Latin America, down 5.8 percent
- Total company comparable sales growth, down 5.8
Franchise comparable sales growth for the two-months ended Feb. 28 include:
- United States & Canada, down 8.5 percent
- EMEA/APAC, up 1.3 percent
- Latin America, down 2.1 percent
- Total franchise comparable sales growth, down 5.3 percent
Systemwide comps growth for the two-months ended Feb. 28 include:
- United States & Canada, down 8.2 percent
- EMEA/APAC, up 0.6 percent
- Latin America, down 2.3 percent
- Total systemwide comparable sales growth, down 5.4 percent
"As we mentioned during our second quarter earnings call, U.S. and Canada January sales were impacted by adverse weather conditions, which worsened in February, resulting in lower than anticipated sales," Burger King chairman and CEO John W. Chidsey said in a news release. "However, we have seen improvement in sales with positive traffic at our company-owned restaurants in the U.S. and Canada during the first week of March, compared to January and February, as the impact of weather has become less significant."
Looking ahead
A challenging consumer environment is expected to continue as unemployment levels are forecasted to remain high throughout 2010. As such, the company will continue to feature its robust value menu including the new Buck Double — a double-patty burger with a single cheese slice to replace the $1 quarter-pound double cheeseburger — beginning in April. On the indulgent side of its barbell menu, Burger King's offerings will include the new Steakhouse XT burger and the upcoming rollout of bone-in ribs.
"We are pleased with the consumer response to the new Steakhouse XTT burger and are looking forward to the launch of bone-in ribs at the end of May," Chidsey said. "The innovative products coming off our game-changing broiler are expected to satisfy our guests' indulgent tastes at affordable prices while building higher check."
Later this month, BKC will introduce its BK Breakfast Muffin sandwich priced at no more than one dollar and BKT Breakfast Bowl to enhance its breakfast offerings. These product introductions are in advance of a new U.S. comprehensive breakfast platform launching later in the year and includes Seattle's Best Blend coffee made from 100-percent arabica beans.
The company will provide additional information on its third quarter fiscal 2010 results and an outlook for the full fiscal year as part of its quarterly earnings release and webcast tentatively scheduled on April 29.
Winter impacts other QSRs
Other chains also have reported that the extreme winter weather impacted sales.
Wendy's/Arby's Group chairman and CEO Roland Smith said last week in the company's fourth quarter earnings call that February sales trends at Wendy's were significantly impacted by the weather. McDonald's reported last month that January sales, which were down 0.7 percent, were impacted by the Arctic cold in that month. The company reported this week that February same-store sales in the United States were up 0.6 percent.
Related Media
Subscribe
Get the latest news and resources from QSR Web.
