Burger King 3rd-quarter profit falls as bad winter weather hampers sales

Bad winter weather hurts Burger King 3Q profit

CHICAGO — Bad winter weather crimped fiscal third-quarter revenue at Burger King Holdings Inc., and the fast food’s profit fell 13 percent.

The nation’s No. 2 burger chain earned $41 million, or 30 cents per share, in the period that ended March 31. That compares with a profit of $47.1 million, or 34 cents per share, a year earlier.

Revenue dipped 1 percent to $596.9 million from $599.9 million.

Analysts surveyed by Thomson Reuters, whose estimates usually exclude one-time items, predicted a profit of 29 cents per share on revenue of $597.7 million.

Citigroup analyst Greg Badishkanian said Thursday’s results were “decent” and top Wall Street forecasts thanks to more customers visiting the company’s restaurants, particularly in March.

While there are tentative signs of improvement in the economy, high unemployment rates hurt Burger King so the Miami company is expanding its menu with items that appeal to both budget-conscious customers and those willing to spend more.

The burger chain continued to push its $1 quarter-pound double cheeseburger during the quarter but also launched the pricier Steakhouse XT burger line in February, which executives said helped bring in customers.

It’s also planning to add a BK Breakfast Muffin and Buck Double cheeseburger and add the more expensive BK Breakfast Bowl and BK Fire-Grilled Ribs in the current quarter.

“In the near term, we are excited about our product lineup that includes a balance of value and premium products,” Chairman and CEO John Chidsey said in a statement.

Burger King faced harsh criticism from its franchisees last fall when it announced the double cheeseburger promotion. They said they would lose money on the deal, but the company says the promotion continues to spur traffic and has boosted lunch and dinner sales.

Promotions are tricky for restaurants and can hurt profit even as they boost traffic.

Meanwhile, Burger King said a key indicator dropped during the quarter: Sales at its U.S. and Canadian restaurants that have been open at least a year sank 6.1 percent — including about 3 percentage points due to winter weather. The figure, which is considered a key performance measured because it isn’t skewed by results from restaurants that open or close during the year, fell 3.7 percent worldwide.

In contrast, worldwide and in the U.S. and Canada, the figure rose a year ago from 2008’s quarter.

Last week, rival McDonald’s reported rising sales.

Burger King runs more than 12,000 restaurants in all 50 states and in 74 countries and U.S. territories worldwide.

Its shares rose 71 cents, or 3.4 percent, to $21.40 in morning trading Thursday.

AP Retail Writer Michelle Chapman contributed to this report from New York.

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