Burger King sales in January and February hurt by severe winter storms

Burger King sales hurt by winter storms

CHICAGO — Winter storms hurt Burger King’s results in January and February, the fast-food chain said Tuesday.

In the U.S. and Canada, Burger King’s sales in locations open at least a year fell 8.2 percent over the two-month period.

More than 75 percent of Burger King stores are in the central and eastern U.S. — the two regions hit hardest by the storms.

The company, like many of its competitors, has been in a heated fight for customers in recent months as economic woes caused diners to skip meals out, even at lower-priced fast-food chains.

In 2009 traffic at fast food restaurants fell 3 percent, according to market research firm NPD Group. To combat that, much of the industry has been locked in a price war to offer value menus to customers.

Burger King’s sales for the two months were weaker than two of its competitors. At rival McDonald’s Corp., the same measure fell 0.7 percent in January and climbed 0.6 percent in February. Meanwhile, at CKE Restaurants Inc., which owns Carl’s Jr. and Hardee’s, the measure fell 6.4 percent in January and 4.2 percent in February.

On a worldwide basis, the sales measurement fell 5.4 percent.

Sales at restaurants open at least a year are a key performance indicator because they measure growth from existing locations rather than newly opened ones.

Burger King Holdings Inc., based in Miami, said storms hurt the sales metric by about 3 percentage points in the U.S. and Canada. The company expects revenue and income from operations in the fiscal third quarter will fall from the year-ago period in the U.S. and Canada.

During the first week in March, sales in stores open at least one year have improved, CEO John W. Chidsey said in a statement.

Analysts said the results were disappointing, and lowered their earnings-per-share estimates for the company by roughly 2 cents per share.

“We … believe today’s release could reinforce investor skepticism around management credibility,” Bernstein analyst Sara Senatore told investors in a research note. “The worst is likely behind the company, as leading indicators point to an improving consumer picture, but we remain cautious on the stock.”

Investors surveyed by Thomson Reuters now expect Burger King to earn 30 cents per share for the quarter, down from 32 cents per share on Monday.

Burger King is to report its full fiscal third-quarter results April 29.

Burger King shares rose 40 cents, or 2.2 percent, to close at $18.72 Tuesday.