Burger King Gets Fatter

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Burger King (NYSE: BKC) shareholders have been treated royally since the world's second largest burger chain went public last year. This morning's fiscal third quarter report gave them no reason to overthrow the Whopper-fueled monarchy.

Revenue rose 9% to $539 million at Burger King. Profits clocked in at $0.25 per share, well ahead of the $0.15-a-share profit that the fast-food titan had posted on an adjusted basis a year earlier.

Most of the metrics held up well. Comps rose by 3.2%, the 13th consecutive quarter of store-level gains at Burger King. Company restaurant margins rose the fourth quarter in a row.

The only concern I have is that -- like Wendy's (NYSE: WEN) -- the number of North American locations is shrinking. There are 120 fewer Burger King franchised locations in the United States and Canada than there were a year ago. Healthy expansion overseas has more than offset the domestic unit decline, though one would think that the concept's consistently improving store-level popularity should be making it an easy sell to prospective franchisees.

Burger King's return to financial glory -- earnings per share have soared 148% to $0.82 a share through the first nine months of fiscal 2007 -- has come by cutting against the grain. Wendy's and McDonald's (NYSE: MCD) have grown comps by promoting higher-priced healthier items like grilled chicken breast sandwiches and roasted chicken-topped salads.

Burger King's solution has been to roll out fatter -- and fattier -- burgers. Items like the Texas Double Whopper, Angus Cheesy Bacon, and BK Stacker have been the marquee promotions at the company. Yet BK isn't the only one gunning for decadence. CKE's (NYSE: CKR) Hardee's and Carl's Jr. chains have also scored with audiences, nutritional values be darned.

It just goes to show that there is more than one way to skin a burger chain. For now, at least, the artery-tightening eats have led to (ironically enough) healthy growth at Burger King.

For more on the burger wars saga, check out:

• Burger King's Less Subservient Chickens
• McDonald's Wants a Title Shot
• Still Turning a Corner at Wendy's

Longtime Fool contributor Rick Munarriz lives in Burger King's hometown of Miami and actually grabbed dinner at BK last night. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.