Burger King
Revenue climbed 10% to $594 million. Net margins improved, helping prop up profits by 20%, to $0.20 a share. Silly analysts! They were looking for just a profit of $0.27 a share on $580 million in revenue. Will they ever truly know the King?
Period |
EPS est. |
EPS actual |
---|---|---|
Q1 2007 |
$0.26 |
$0.30 |
Q2 2007 |
$0.26 |
$0.28 |
Q3 2007 |
$0.22 |
$0.25 |
Q4 2007 |
$0.27 |
$0.29 |
Q1 2008 |
$0.33 |
$0.35 |
Q2 2008 |
$0.32 |
$0.36 |
Q3 2008 |
$0.27 |
$0.30 |
Comps clocked in strong, rising 5.8% globally, or 5.4% in the United States and Canada. The company's hardly working off a base of depressed numbers here; these unit-level gains are stacked on top of four years of rising register rings.
Things aren't perfect throughout the company's kingdom of more than 11,400 restaurants, though. Margins at the restaurant level were pinched by the same high food costs that have plagued the hospitality industry. With 90% of the company's units franchised, the King's got to keep his franchisees happy.
Then again, franchisees are unlikely to overthrow royalty. A quick look around should give them plenty of motivation to stay put. Wendy's
BK's got to prove itself fallible -- eventually. But since it went public two years ago, the company has done little to disappoint investors. For now, it makes a lot more sense to roll with the King than to bet against the kingdom.