News
Burger King remains focused on improvement, growth
October 29, 2009
Burger King Corp. assured investors on its quarterly earnings conference call that the company is committed to focus on improvement, including boosting sales in the challenging environment.
The company reported yesterday that global same-store sales were down 2.9 percent for the first quarter ended Sept. 30.
Burger King chief financial officer Ben Wells told investors the company's "commitment to drive continuous improvements across our strategic growth pillars is on track." During the year, the chain opened stores in two new countries, the Czech Republic and Suriname, and is now in 73 countries and U.S. territories. Units are concentrated in 10 countries, representing 88 percent of the total restaurant count.
"We are also executing on our strategic initiatives aimed at driving profitability, including our U.S. and Canadian re-imaging program and the introduction of innovative food offerings utilizing our new batch broiler," he said. "We also continue to extend our competitive hours of operation and significantly upgrade our POS system (now in 46 percent of all systemwide) to improve restaurant performance to enhance controls and real time visibility into product sales."
Regarding the batch broilers, Burger King chairman and CEO John Chidsey said the new broilers have been installed in 55 percent of the system worldwide and 79 percent in the United States and Canada. U.S. installations are on track for the national rollout of the Steakhouse XT launch in February.
The company will continue to focus on new value-oriented product development, but developing premium products for the new broilers is equally as important, he said. "Although we must be nimble and responsive to the current consumer environment, it is imperative that we also stay focused on growing the brand over the longer term. And we believe products cooked out on the new batch broiler will provide us with a unique competitive advantage over our peers for years to come."
Chidsey said that U.S. comps bottomed out in May but have improved since then, "although not at levels that we are satisfied with and we are taking additional steps to improve these." He told analysts traffic improved sequentially month by month and should continue to do so.
One tactic has been the addition of the the $1 Double Cheeseburger, now in more than 40 U.S. markets. Chidsey said those markets are performing well and impacting national results.
Chidsey also said that the company's marketing efforts in the next fiscal year will include a repositioning push.
"Globally our marketing campaigns and menu options will focus on the brand equities we believe give us a distinct competitive advantage, flame-broiled taste, quality and size at affordable prices."
Regarding the company's growth, more than 90 percent of restaurants — 338 locations — opened outside the United States and Canada during the year, the best international development year in the company's history. The company expects to add 250 to 300 net new restaurants next year, with 80 percent to 90 percent of new restaurants will be outside of the United States.
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