Is Burger King Beating McDonald's in a Street Fight?

On Thursday morning, Burger King Worldwide (NYSE: BKW  ) will release its fourth-quarter results. We will finally learn if Burger King is one of the culprits that is taking market share from McDonald's (NYSE: MCD  ) . With Burger King's stock near 52-week highs at the time of this writing, look to its earnings results for clues on the fight that could send it to new highs or cause it to retreat.

The McDonald's clues
McDonald's same-store sales have been slipping backward. In the third quarter, U.S. same-store sales were up 0.7%. For October, they only grew 0.2%. For November, they declined by 0.8%, and overall for the fourth quarter they dropped by 1.4%, meaning that December saw a relatively sharp plunge.

On the conference call, CEO Don Thompson in part blamed the competition, implying that rivals may be taking some of McDonald's market share. He said, "It's a very competitive market out there, [there's a] lot of price [competition] going on and it's a fight for market share. It's a street fight and we are getting at it."

Is Burger King the one beating up McDonald's?
While McDonald's has been busy looking the other way by launching flops such as Mighty Wings, Burger King has been launching a number of initiatives that appear to be aimed at McDonald's jugular.

First, Burger King delivered a jab in September when it launched Satisfries, a lower-fat and -calorie version of its french fries that still maintain much of their taste. McDonald's has been trying to push apple slices as a healthy alternative, which, let's face it, is not a reason most people are showing up at the Golden Arches.

Second, Burger King launched the Big King sandwich in what is an obvious sucker punch against McDonald's Big Mac. It has three patties and two buns with special sauce. It looks and even kind of sounds like the Big Mac. Burger King doesn't even try to deny it. One TV commercial says, "The new Big King from Burger King may look familiar, but it's what's on the inside that counts. Our two fire-grill patties and king sauce makes all the difference." 

Third, less than two weeks after announcing the Big King, Burger King delivered a hard left hook to McDonald's by announcing the $1 BBQ rib sandwich right around the time McDonald's was promoting its McRib at a much higher price. Clearly, it's another direct attempt to steal McDonald's thunder.

Fourth, a few days later Burger King landed an uppercut by announcing it is moving into France, one of McDonald's strongest markets in Europe. Burger King plans to quickly take 20% of the market there through its "well-funded" partners.

Finally, and perhaps the knockout blow, Burger King launched its own spicy chicken sandwich, similar to McDonald's spicy McChicken sandwich. Burger King doesn't seem to be pulling any punches. Burger King doesn't seem to be finished beating up on McDonald's just yet and may kick the larger chain while its same-store sales are down.  

Foolish final thoughts
This vast direct assault on McDonald's is fascinating, but we still don't have official word on whether it's been effective and, if so, how effective. We should get a wealth of information with Burger King's upcoming report. The key metrics to examine will be same-store sales as well as comments from management on what it is seeing in terms of guest traffic and guest response to the introductions.

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