Restaurant Brands lifts 3Q sales 6.4% on rise in fried chicken sales

Friday 12th December 2014

Restaurant Brands, the nation's largest fast food operator, lifted third quarter sales 6.4 percent as an increase in revenue at its KFC stores offset falling sales at its Carl's Jr burger chain.

The Auckland based company lifted sales to $81.1 million in the 12 weeks ended Dec. 1 from $76.2 million a year earlier, it said in a statement. On a same store basis sales rose 7.5 percent to $78.6 million. The number of stores across its brands fell to 173 from 177 in the year, reflecting the closure of five Pizza Huts and one Starbucks Coffee, while it opened a new Carl's Jr and bought the Oamaru KFC store, previously owned by an independent franchisee.

In October, the company lifted its outlook for earnings as it benefits from lower input costs, higher sales and restructuring of stores. Restaurant Brands expects full year profit will exceed $22 million, higher than the company's $20 million forecast in April and the $18.9 million posted last year.

The quarterly lift in same store sales was led by an 11 percent gain at its fried chicken KFC stores to $59 million, while total store sales rose 9.8 percent to $60.7 million. Restaurant Brands said sales were driven by a new menu, increased marketing spend and revised store opening hours.

In November, Restaurant Brands agreed to buy seven Carl's Jr stores owned and operated by Forsgren NZ for $10.5 million, making it the sole operator of the burger chain brand in New Zealand. The acquisition, which settled earlier this week and isn't reflected in third quarter sales, takes the company's total number of Carl's Jr stores to 16.

On a same store basis, burger sales at its newest chain Carl's Jr dropped 29 percent to $2.8 million, and on a total store basis slipped 9.6 percent to $3.6 million. The drop in quarterly burger sales reflected initial opening sales at the Auckland International Airport, Hastings and Otahuhu stores in the corresponding quarter, Restaurant Brands said.

Pizza Hut lifted same store sales 5.8 percent to $10.9 million in the three months ended Dec. 1, while total store sales declined 1.6 percent to $10.9 million. Starbucks increased same store sales 4.9 percent and total store sales rose 1 percent to $5.9 million. The company has been selling its regional and lower volume Pizza Hut stores to independent franchisees and closing unprofitable Starbucks Coffee outlets, in an effort to boost earnings.

In the year to date the company has lifted same store sales 5.6 percent to $257 million, and on a total stores basis increased sales 6 percent to $267 million.

Shares of the listed fast food operator rose 1.9 percent to $3.75 and have climbed 31 percent since the start of the year.

BusinessDesk.co.nz

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