Burger King Reports Q2 2011 Results


Privately-held Burger King reported results for its second quarter ending June 30. EBITDA was $150.6 million, compared to $117.1 million in the same quarter of 2010, a 29 percent increase. The Miami-based burger concept, with over 12,000 locations in 78 countries, attributed its strong results to cost savings primarily driven by its restructuring and a zero-based budgeting (ZBB) program.

Financial Highlights

  • Total revenues were $596.2 million, down 4.3 percent from $623 million in last year's quarter
  • Burger King reported an improvement of 140 basis points (BP) in restaurant margin.
  • Net income in the second quarter was $42.8 million, down 13 percent from last year's (LY) $49 million. Global same store sales decreased by 2.2 percent from LY.
  • Same store sales decreased 5.3 percent vs. LY in U.S. markets and Canada
  • In Latin America, same store sales increased by 6.8 percent from LY
  • EMEA/APAC markets posted same store sales growth of 2.2 percent from LY. EMEA/APEC is BK's European, Middle East, Africa and Asia Pacific reporting region.

"Going forward, our focus remains on growing our comparable sales, improving our company restaurant margin and expanding our global footprint through franchisee development,” said Daniel Schwartz, chief financial officer for Burger King (BK).

BK indicated income degradation was primarily a result of transaction costs and increases in interest expense related to sale of the company to an affiliate of 3G in the fall. The chain also said that in addition to the transaction costs, global restructuring costs and professional fees made up the balance of a $12 million special hit to the P&L (profit and loss statement).

Surprisingly, lower labor costs and the benefits of product mix shift away from value meals were main drivers of a higher restaurant margin that more than offset the deleveraging caused by negative same store sales overall and the increase in commodity costs.

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Source: Business Wire

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