Burger King has reported a 0.9% rise in global comparable sales in its third quarter, driven by positive comparable sales growth in Europe, Middle East and Africa (EMEA), Latin America and the Caribbean and Asia Pacific, partially offset by slightly negative comparable sales growth in the US and Canada.
System-wide sales climbed 4.9%
Revenues during the quarter stood at $275.1m, a decline of 39.6% from the prior year primarily as a result of the net refranchising of 519 company-owned restaurants in the same period in 2012.
Excluding the impact of refranchising and currency movements, revenue increased 8.1% year-over-year due to net restaurant growth and positive comparable sales growth in EMEA, LAC and APAC.
Adjusted EBITDA of $176m grew 16.7% from the prior year on an organic basis, excluding the impact of refranchising and currency movements, driven by positive double-digit EBITDA growth across all four regions. Adjusted EBITDA margins expanded to 64.0% from 35.7% in the prior year.
The company said this was largely due to its global refranchising initiative and effective cost management that resulted in a $5.6m year-over-year decrease in management general and administrative expense.
It said that its operations in EMEA continued to deliver strong results in the third quarter with comparable sales growth of 2.4%, the eleventh consecutive quarter of comparable sales growth in the region. Germany continued to be its top-performing market with positive comparable sales growth driven by the success of the “Trial Weeks” value platform. It said that EMEA systemwide sales growth of 10% reflects the impact of 296 net new restaurant openings, an 86% increase from the prior year.
US and Canada comparable sales growth declined 0.3% in the quarter due to continued softness in consumer spending and ongoing competitive headwinds.
Burger King chief executive Daniel Schwartz said: “Our positive momentum continued in the third quarter, as we delivered double-digit organic EBITDA growth and industry best-in-class margins. We grew comparable sales across all three international regions and opened 133 net new restaurants globally. In the US and Canada, we launched Satisfries, a first of its kind better-for-you French fry, which demonstrates our commitment to leading innovation in the QSR industry. We believe that new products like this, combined with our focus on improving operations will enhance the guest experience and drive increased restaurant profitability. Our exceptional franchisees, partners and employees are aligned to execute on our strategy and we expect to finish 2013 strong.”
