Popeyes parent’s stock rises as chicken sandwich drives sales; earnings top estimates

The return of Popeyes’ chicken sandwich helped parent company Restaurant Brands International top analysts’ expectations for its quarterly earnings and revenue.

The news sent shares of the company up 2% in morning trading Monday.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: 75 cents, adjusted, vs. 73 cents expected
• Revenue: $1.48 billion vs. $1.46 billion expected

Burger King’s parent company reported fiscal fourth-quarter net income of $257 million, or 54 cents per share, down from $301 million, or 64 cents per share, a year earlier.

Excluding expenses from relocating support centers and other items, Restaurant Brands earned 75 cents per share, beating the 73 cents per share expected by analysts surveyed by Refinitiv.

Net sales rose 6.8% to $1.48 billion, topping expectations of $1.46 billion.

Popeyes Louisiana Kitchen’s chicken sandwich returned to restaurants in early November, helping the fried chicken chain’s same-store sales grow by 34% during the quarter. Popeyes originally introduced the sandwich nationwide in August, but it sold out before the end of the month, driven by buzz on social media.

Burger King’s same-store sales grew by 2.8%. Its U.S. same-store sales growth was slower this quarter, rising only 0.6%. Analysts were expecting U.S. same-store sales growth of 3%. In the third quarter, buoyed by the national release of the Impossible Whopper, Burger King saw its same-store sales jump 5% in the U.S.

Amid concerns about the outbreak of the Wuhan coronavirus, executives said that Burger King’s Chinese business accounted for 2% of the company’s consolidated systemwide sales in 2019. The company is monitoring the situation “very closely.”

Tim Hortons, the laggard of Restaurant Brands’ portfolio, saw its same-store sales decline by 4.3% in the quarter. The Canadian coffee chain has struggled as sales growth in its domestic market slow down. Tims’ Canadian same-store sales fell by 4.6% during the fourth quarter.

“At Tim Hortons, our performance did not reflect the incredible power of our brand and it is clear that we have a large opportunity to refocus on our founding values and what has made us famous with our guests over the years, which will be the basis for our plan in 2020,” Restaurant Brands CEO Jose Cil said in a statement.

Cil said that turning around Tims is the company’s top priority. Plans to reignite its Canadian business include renovating its drive-thrus with digital menu boards and improving the bread for its breakfast sandwiches.

The company announced in late December that Tim Hortons President Alex Macedo will step down in March. Axel Schwan, Tims’ regional president for Canada and the United States in October, will oversee the Latin America region as well.