August 1, 2018 / 2:29 PM / in 18 days

Restaurant Brands misses estimates on weak Burger King sales

(Reuters) - Fast-food chain Restaurant Brands International Inc missed analyst estimates for total revenue on Wednesday, as weak sales at its Burger King chain overshadowed improvements at Tim Hortons.

Burger King logo is seen in a restaurant in a communist-era building in Warsaw, Poland October 2, 2017. REUTERS/Kacper Pempel

Restaurant Brands said comparable sales at Burger King rose 1.8 percent in the second quarter, compared with a 3.9 percent increase a year earlier.

Like other fast-food chains, the Whopper burger maker has struggled to attract customers in a slowing U.S. market, which is also its biggest.

Larger rival McDonald’s Corp missed quarterly U.S. same-store sales estimates for the first time in at least two years.

In contrast, same-store sales at Restaurant Brands’ coffee chain, Tim Hortons, stabilized in the latest quarter as it overhauled stores and introduced new menu items, including “Breakfast Anytime”.

Same-store sales at Tim Hortons were flat, compared with a 0.8 percent dip a year earlier.

“We were also encouraged to see stable results at Tim Hortons and the launch of all-day breakfast, which we believe will drive incremental traffic gains,” Stephens Inc analyst Will Slabaugh said.

Tim Hortons is looking to tap a growing cafe culture in China and said in July that it would open 1,500 coffee-and-donut outlets in the country.

The move is part of a strategy by Tim Hortons’ new president, Alex Macedo, who is trying to cope with mounting competition in the industry.

Net income attributable to shareholders rose to $169.1 million, or 67 cents per share, in the three months ended June 30 from $89.5 million, or 37 cents per share, a year earlier.

On an adjusted basis, the company earned 66 cents per share, beating analysts’ average estimates of 63 cents, according to Thomson Reuters I/B/E/S.

Revenue was $1.14 billion, missing estimates of $1.37 billion.

Restaurant Brands shares were down 1.8 percent at $80.99 on the Toronto Stock Exchange.

Reporting by Nivedita Bhattacharjee and Laharee Chatterjee in Bengaluru; Editing by Anil D'Silva

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