No Whopper Freakout Here

It's a good thing that the marketing department at Burger King (NYSE: BKC  ) would rather punk its customers -- during the successful "Whopper Freakout" ad campaign, patrons were told that the signature burger had been discontinued -- than its shareholders.

Burger King continues to have a shimmering coat to match that of its crunchy fries, posting yet another blowout quarter. Earnings soared 29% to $0.36 a share, as revenue climbed by 10% to hit $613 million. Wall Street was expecting the company to earn just $0.32 a share on $597 million in revenue.

Worldwide comps rose by 4.5% during the quarter. Burger King now has an enviable streak of 16 consecutive quarters of clocking in with higher comps. The restaurant count is growing again, too.

The company closed out the quarter with 11,395 units, most of them franchised locations. Burger King is experiencing its highest unit growth in six years, but all of that growth is taking place internationally. As with rival Wendy's (NYSE: WEN  ) , the number of North American locations continued to shrink, as Burger King shed more than 20 domestic units year over year.

That's a minor quibble, because this really is a great report. Comps and margins expanding, even as the economy is contracting? Maybe the burger chains will be recession-resistant after all. It makes sense. Places like McDonald's (NYSE: MCD  ) , Jack in the Box (NYSE: JBX  ) , and Carl's Jr. parent CKE Restaurants (NYSE: CKR  ) will provide economical treats even when money is tight.

My only real concern with the burger joints is that many have taken to a barbell pricing approach. They're offsetting dollar-menu items with higher-margin premium offerings. If diners are counting their pennies, they may gravitate to the lower-priced, lower-margin items.

However, that clearly isn't happening at Burger King right now. Comps and margins wouldn't be this strong if customers weren't going for the high-end chicken breast salads or new premium offerings like the homestyle burger melts. Well served, BK.

The Whopper Freakout ads -- rich with humor and aided by a self-contained website showing many of the pranks in action -- may have fooled unsuspecting customers, but Burger King is also deliciously fooling the analyst community. With this morning's report, it has now topped Wall Street expectations in each of the past six quarters.  

Way to go, Burger King. The ultimate prank is when you punk the bears.

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