Restaurant Brands International (QSR) reported third-quarter earnings and revenue that came in line with Wall Street estimates — with sales bolstered by nearly 10% growth at Popeye’s amid the chicken sandwich wars.
Here were the numbers for Restaurant Brands’ third quarter, compared with Bloomberg-compiled estimates:
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Revenue: $1.46 billion vs. $1.46 billion expected
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Adj. earnings per share: 72 cents vs. 72 cents expected
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Burger King same-store sales: +4.8% vs. +3.6% expected
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Popeyes same-store sales: +9.7% vs. +4.9% expected
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Tim Horton’s same-store sales: -1.4% vs. +0.6% expected
“During the third quarter, we grew system-wide sales nearly 9% through a combination of strong global comparable sales growth and restaurant expansion,” Restaurant Brands CEO Jose Cil said in a statement.
It was a big quarter of partnerships and menu innovation for Restaurant Brands. During the third quarter, Burger King rolled out its Impossible Whopper nationwide, Popeye’s sparked the chicken sandwich wars — which helped spark the chain’s best sales in almost 20 years — and Tim Hortons collaborated with plant-based meat maker Beyond Meat (BYND).
Burger King’s nationwide rollout of the Impossible Whopper in August boosted food traffic significantly for the burger chain, with Cil boasting 15% international sales growth and 5% comp sales domestically — the company’s best since 2015.
Analysts at Barclays studied the increase in foot traffic at Burger King locations in St. Louis, where the initial Impossible Whopper tests ran in April. The data found that traffic jumped 18% in St. Louis Burger King stores during the test period, while there was no traffic gain at St. Louis McDonald’s (MCD) locations and Burger King’s Kansas City stores.
Meanwhile, Popeyes’ summer sensation, the chicken sandwich, has yet to return to stores after a blowout launch nationwide. “Popeyes had one of its best quarters in nearly two decades, achieving comparable sales growth of more than 10% in the US,” according to Cil.
It took the Popeyes culinary team two years to develop the chicken sandwich, and after officially releasing it on August 12, the sandwich sold out in just two weeks.
The chicken chain was expecting the supply to last for at least three months, but the unintended viral social media attention drove huge levels of traffic to stores, and wiped out chicken supplies within weeks. Recent reports have suggested that the chicken sandwich could return to menus as soon as next month.
“We knew we had a very high quality product at a very attractive price point,” Popeyes America’s President Felipe Athayde previously told Yahoo Finance in an interview. “One thing is to predict high demand, the other thing is when you have 50 people lined up outside of the restaurant at 9 a.m. when the restaurant opens at 10 a.m.”
In Canada, Tim Hortons announced in June that it would be selling Beyond Meat breakfast sandwiches across almost 4,000 Tim Hortons locations across the country. But after about three months, the coffee chain said that it would be pulling the Beyond Meat products from most menus except for in Ontario and British Columbia. Cil noted that it was a challenging quarter for the Canadian chain, but said the company is committed to its long-term growth.
Prior to Monday’s results, Restaurant Brands stock rose nearly 34% this year, while the S&P 500 Index (^GSPC) jumped 22% in the same time period.
The conference call with management kicks off at 8:30 a.m. ET.
This post is developing. Please check back for updates.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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