Image via WikipediaBurger King earns $49M in 4Q, down 17 pct; lower sales, higher ingredient costs take toll
MIAMI (AP) -- Burger King Holdings Inc.'s fourth-quarter
net income fell nearly 17 percent as sales slipped and costs for ingredients and packaging climbed.
The
fast-food restaurant said Tuesday that it earned $49 million, or 36 cents per share during the period that ended in late June. That compares to last year's net income of $58.9 million, or 43 cents per share.
The company also got a smaller tax benefit than last year.
Revenue slipped 1 percent to $623 million.
The earnings beat
Wall Street forecasts, but revenue fell short. Analysts surveyed by
Thomson Reuters expected the company to earn 34 cents per share with revenue of $635 million.
Sales at restaurants open at least a year slid for the fifth consecutive quarter. That key indicator of a
restaurant chain's performance excludes growth at stores that open or close during the year. The measure fell 0.7 percent around the globe and 1.5 percent in the
U.S. and Canada.
While the declines weren't as steep as those recorded in previous quarters, Burger King continued to lag its bigger competitor,
McDonald's Corp.
Burger King has been particularly vexed by the
economic downturn as layoffs and a high unemployment rate hurt its core demographic of young men. Its tried to compensate by expanding its menu with items that appeal to both budget-conscious customers and those willing to spend more.
And Tuesday, the company said that effort is showing some success as customers in North America bought its $1 menu items like a breakfast muffin and a double cheeseburger. But customers also gravitated toward some more expensive dishes too, like the company's breakfast bowl, Whiplash Whopper and ribs.
For the full year, Burger King earned $186.8 million, or $1.36 per share. That's down 7 percent from last year's net income of $ 200.1 million, or $1.46 per share.
Full-year revenue slipped 1 percent to $2.50 billion, down from $2.54 billion.
"In
fiscal year 2010, we faced sustained levels of high unemployment and a fragile global economy that combined made this one of the toughest operating environments in recent history," Chairman and CEO John Chidsey said in a statement.
Burger King is based in Miami and has more than 12,000 restaurants around the globe.
Its shares climbed 38 cents, or 2.3 percent, to $17 in pre-market trading Tuesday.
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