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(Reuters) -Restaurant Brands International topped market estimates for quarterly sales and profit on Tuesday, as improved marketing and promotional offers drew more customers to its Burger King chain while traffic at Tim Hortons held strong.
Burger King had previously struggled to drive sales in the United States, but the brand has ramped up investments in restaurant remodels, new technology, advertising and kitchen equipment and also streamlined its menus and operations.
In the second quarter alone, the burger chain invested $12 million as part of its turnaround plan, including $10 million towards advertising.
The efforts seem to have paid off as Burger King gained market share in May for the first time in more than three years, data from research firm M Science showed. Limited-time launches such as the “Spider-Verse” Whopper have also helped.
“It was a very strong quarter. Frankly I was very surprised at the beat across all of their businesses…I have to give management credit for the type of execution that they’re operating on right now,” said Sante Faustini III, director of product intelligence at M Science.
Comparable sales at Burger King U.S. rose 8.3% in the quarter, beating analysts’ estimate of a 4.5% increase.
Meanwhile, Tim Hortons’ comparable sales grew a better-than-expected 12.5% in Canada, aided by strong demand for its hot coffees, breakfast sandwiches and bagels, as mobility continues to improve in the region.
Global comparable sales at Restaurant Brands, which also owns the Popeyes and Firehouse Subs chains, rose about 10% in the quarter ended June 30, beating estimates of 5.75%. Total revenue also rose a better-than-expected 8.3% to $1.78 billion.
“While investor expectations have remained elevated for (Restaurant Brands)…this morning’s results encouragingly show continued strength of the overall business amid a mixed restaurants earnings season thus far,” said Christopher Carril, analyst at RBC.
Excluding items, Restaurant Brands earned 85 cents per share in the quarter, beating estimates of 77 cents, according to Refinitiv data.
