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Restaurant Brands stock drops after Burger King strength is offset
Burger King posted 3.8% comps and 8.6% same-store sales growth, but weaker performance at other brands weighed on the parent’s results.
Restaurant Brands International Inc. saw its stock fall 2% after a quarter in which Burger King outperformed expectations, while other brands underperformed, Yahoo Finance reported. On the August 11 episode of Mad Money, Jim Cramer focused on the divergence between Burger King’s resurgence and the broader headwinds facing the multi-brand operator.
Burger King delivered 8.6% same-store sales growth in the US and Canada, exceeding the 6.2% analyst expectation. Cramer also cited adjusted operating income at Burger King up 13% and said Burger King’s results helped drive operating income for the parent up 7%.
At the parent level, Cramer said total revenue was in line, but operating income came in better than expected. He added that Burger King’s strength translated into a 3-cent earnings beat versus a $1.04 basis.
The weakness in other Restaurant Brands units, particularly Tim Hortons and Popeyes, was enough to offset Burger King’s gains, according to Cramer’s discussion. He pointed to Burger King’s customer-focused changes, including menu improvements tied to a Whopper revamp, store refreshes, and an emphasis on value, as part of what has been driving the sales momentum.