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Earnings

Burger King parent beats profit forecasts, plans drive-thru expansion

(Reuters) - Burger King parent Restaurant Brands International Inc QSR.TOQSR.N on Tuesday reported a bigger-than-expected quarterly profit, powered by the success of fried chicken sandwiches at Popeyes and demand for food delivery as consumers stay at home.

FILE PHOTO: The company logo for Restaurant Brands International is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 6, 2019. REUTERS/Brendan McDermid

Restaurant Brands said it would modernize drive-thrus at more than 10,000 Burger King, Tim Hortons and Popeyes outlets in North America, beginning the rollout with the chicken sandwich chain this year.

During the pandemic, Americans have flocked to drive-thrus to get food quickly with limited human contact.

The car-centric service model has become a necessity for fast-food restaurants, including rivals McDonald's Corp MCD.N and Starbucks Corp SBUX.O as dine-in operations were either stopped or limited during the outbreak.

“We believe strongly that it is time to modernize our drive-thru lanes throughout the U.S. and Canada,” Chief Executive Officer Jose Cil said, adding that the new drive-thrus would feature menu options on digital screens, integration of loyalty program and contactless payment to speed up service time.

On an adjusted basis, the company earned 68 cents, 5 above expectations, according to IBES data from Refinitiv.

The drive-thru expansion and new technology should support revenue growth and signal franchisee’ willingness to invest, Bernstein analyst Sara Senatore said.

For the third quarter, comparable sales at Popeyes, the popular chain that gathered a huge social media audience and long lines at stores last year, rose 17.4%.

But comparable sales at Burger King fell 7% and slumped 12.5% at Tim Hortons, as fewer people bought their morning cups of coffee at cafes amid the work-from-home orders.

Net income attributable to the company’s shareholders fell 27.8% to $145 million for the three months ended Sept. 30 as operating costs and expenses rose.

Reporting by Nivedita Balu in Bengaluru, Editing by Sherry Jacob-Phillips

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