Third quarter earnings net income for Burger King (NYSE: BKW) soared to $68.2 million, or 19 cents per share, the fast-food chain announced this morning (October 28). The Miami, Fla.-based chain's profits were a mere $6.6 million, or 2 cents per share, for the same quarter last year.
However, Burger King's revenue dropped 39.6 percent to $275.1 million from the prior year, primarily as a result of the re-franchising of 519 company-owned fast-food restaurants. Excluding those costs, Burger King's revenue increased 8.1 percent year-over-year.
Burger King executives attribute the company's profitability increase to its global re-franchising initiative, refinancing the chain received last year, and new product introductions such as SATISFRIES. While global comparable store sales only rose 0.9 percent in the quarter, system-wide sales growth of 4.9 percent was attributed to 592 net restaurant openings for the past 12 months.
"Our positive momentum continued in the third quarter, as we delivered double-digit organic EBITDA growth and industry best-in-class margins. We grew comparable sales across all three international regions and opened 133 net new restaurants globally," Burger King CEO Daniel Schwartz said in a company statement. "In the U.S. and Canada, we launched SATISFRIES(TM), a first of its kind better-for-you French fry, which demonstrates our commitment to leading innovation in the QSR industry."
The restaurant chain's comparable store sales in the U.S. and Canada dropped 0.3 percent because of "continued softness in consumer spending and ongoing competitive headwinds," according to the company statement. "Despite these challenges, a well-balanced mix of value promotions, such as the $1 Fry Burger, and premium products, such as the ANGRY WHOPPER® sandwich, helped drive traffic in the quarter," the statement said.
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