360° Coverage : Burger King Worldwide Earnings Preview: Sales And Margins To See...

2 Updates

Burger King Worldwide Earnings Preview: Sales And Margins To See Incremental Growth

Apr 25 2014, 12:59pm CDT | by

Burger King Worldwide is scheduled to release its Q1 2014 earnings on April 25. The company had a good year in 2013, recording a 0.5% rise in same-store sales. Comparable sales or same-store sales,...

Filed under: news

 
 
 

25 weeks ago

Burger King Worldwide Earnings Preview: Sales And Margins To See Incremental Growth

Apr 25 2014, 12:59pm CDT | by

Burger King Worldwide is scheduled to release its Q1 2014 earnings on April 25. The company had a good year in 2013, recording a 0.5% rise in same-store sales. Comparable sales or same-store sales, is an important measure to gauge a restaurant’s performance since it only includes restaurants operating for more than a year and excludes the effect of currency fluctuation. Last quarter, the same-store sales increased by 1.7%. Keeping in mind Burger King’s expansion plans, store re-imaging efforts and menu optimization, we expect increasing sales and widening margins in Q1 2014.

We have a price estimate of $28.97 for Burger King, which is about 13% above the current market price.

See full analysis for Burger King

Sales To See Incremental Growth

The company observed a negative impact on sales in Q4 2013 due to the extreme winter weather and expects the effect to continue in Q1 2014. Moreover, it faces tough competition from fast food chains such as McDonald’s and fast casual chains such as Chipotle Mexican Grill and Panera Bread. However, Burger King is trying to differentiate through re-imaging its outlets and optimizing its menu offerings. By Q4 2013, 30% of Burger King outlets in the U.S. had been remodeled on the modern “20/20″ image. These remodeled outlets had recorded an average sales uplift of 15-20%. The company plans on remodeling 40% of its stores in the U.S. by 2015. This could contribute to lifting the sales in the U.S. outlets in the first quarter this year.

Last quarter, the company had also successfully introduced new offerings in the menu, namely the Big King Sandwich and BBQ Rib Sandwich. These new items offer wider options in the larger burger segment and are expected to attract more customers to some extent.

Franchise Royalties To Rise As Expansion Continues

Burger King completed its global re-franchising initiative in Q4 2013, handing over all but 52 of its stores to franchisees. The franchising model proves profitable to the company as it doesn’t require it to incur operating costs. According to our valuation, Franchise Royalty contributes 74% to the company’s share price. Burger Kings’ expansion plans are expected to boost the franchise royalty stream of revenue for the company, which will lead to wider margins.

The company added 670 new restaurants in 2013, bringing the its total store count to 13,500. Joint ventures initiated by the company in China, Brazil and Russia have grown significantly adding 100 more outlets in these markets last year. In 2014,the company plans to further expand internationally and also to enter France and India.

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a ne ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed Tuesday that she no longer had the virus in her blood.
 
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development.
 
 
Colombia to launch world's first floating gas liquefaction plant
Bogota, Oct 21 (IANS/EFE) The world's first floating gas liquefaction plant is due to begin operating next year off the coast of northern Colombia under a pact between Canada-based Pacific Rubiales Energy and Belgian shipbuilder Exmar.
 
 
Paralysed man walks again after pioneering cell therapy
London, Oct 21 (IANS/EFE) A paralysed man has been able to walk again after therapy that involved transplanting cells from his nasal cavity into his spinal cord, the BBC reported Tuesday.
 
 
 

Latest from the Network

Keira Knightley was 'a goody two-shoes'
Keira Knightley was ''a goody two-shoes'' when she was younger. The 29-year-old actress claims she was a ''boring'' well-behaved child and never skipped school because she didn't want to upset her parents or teachers....
Read more on Celebrity Balla
 
Kat Dennings is in love with Kim Kardashian
Kat Dennings thinks Kim Kardashian's butt is ''amazing.'' The '2 Broke Girls' actress was ''very nervous'' when the 'Keeping Up with the Kardashians' star filmed a cameo for the show's 80th episode and was too shy to...
Read more on Celebrity Balla
 
Taylor Swift doesn't 'need some guy' for inspiration
Taylor Swift is ''figuring out how to cope'' with life on her own. The 'Shake It Off' hitmaker hopes her upcoming album, '1989,' will prove she doesn't ''need some guy'' to help her ''make a great record'' or to feel...
Read more on Celebrity Balla
 
Sarah Hyland is 'great'
Sarah Hyland says she is ''great'' after obtaining a restraining order against her ex-boyfriend. The 'Modern Family' star is happy to be focusing on her career again after a judge recently granted her a three-year...
Read more on Celebrity Balla
 
India re-elected to UNHRC for two years
United Nations, Oct 21 (IANS) India was Tuesday re-elected to the United Nations Human Rights Council (UNHRC) for the term 2015-2017 in a keenly contested election in the UN General Assembly in New York. Other...
Read more on Politics Balla
 
Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed...
Read more on Business Balla
 
Gurdwara closed in Belgium
Brussels, Oct 21 (IANS) The mayor of the town of Vilvoorde in Belgium, Hans Bonte, has ordered the closure of the local gurdwara, Guru Nanak Sahib, for one month. Belgian media Tuesday charged that the Sikh temple "...
Read more on Politics Balla
 
Air strikes kill 28 militants in Pakistan
Islamabad, Oct 21 (IANS) At least 28 militants were killed when the Pakistani army launched an air strike in the country's northwest tribal town of Datta Khel Tuesday, military said. In a statement, Inter Services...
Read more on Politics Balla
 
Report reveals large-scale torture in China's 'Black Jails'
Beijing, Oct 21 (IANS/EFE) The use of hotels and factories as clandestine prisons where thousands of people -- mostly women -- are tortured to prevent their complaints against the government from coming to light has...
Read more on Politics Balla
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development. WHO Assistant...
Read more on Business Balla