Same-store sales drive revenues. Burger King (BKW) reported global same-store sales growth of 2.4% in the third quarter—compared to 0.9% during the same quarter in 2013. As we discussed earlier in this series, 99% of Burger King’s restaurants are franchised. The system sales represent the franchised restaurants’ same-store sales growth.
In contrast, Chipotle Mexican Grill (CMG) only has company-operated restaurants. It reported same-store sales of ~19% in the third quarter. To learn more, read “Why Chipotle Mexican Grill’s same-store sales grew?”
According to management, the growth in same-store sales was driven by new product launches. Sales were also driven by increased traffic growth that came from the KING DEALS value menu. On the KING DEALS menu, Burger King offers a different sandwich every day of the week. We’ll discuss new product launches in the next part of this series.
Segment-wise same-store sales
Same-store sales in Asia-Pacific (or APAC) grew 4.1%—compared to 3.7% during the same quarter in 2013. In the US and Canada, same-store sales were 3.6%—compared to -0.3% in the same period last year. Europe, the Middle East, and Africa (or EMEA) grew 1.3%—compared to 2.4%. Latin America had a -3% same-store sales—compared to 2.1% in the same quarter last year.
Burger King performed better than its peers
The US segment did well compared to McDonald’s (MCD) and YUM! Brands’ (YUM) Kentucky Fried Chicken (or KFC). MCD had same-store sales of -3% during the third quarter. KFC had a same-store sales growth of 2% in the US.
The Consumer Discretionary Select Sector SPDR (XLY) includes McDonald’s, Yum! Brands, and several other restaurant stocks. XLY gives investors broad exposure to the restaurant industry.
Why did Burger King have a better quarter this year than the same quarter last year? What initiatives helped drive the same-store sales? We’ll discuss these questions in the next part of this series.
During the quarter, Burger King relaunched Chicken Fries. The item was suspended in 2012. It had been replaced with other chicken items.
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