Burger King Profit Rises 37% as Refranchising Lowers Costs

By Tess Stynes 

Burger King Worldwide Inc. said its fourth-quarter earnings rose 37% as its refranchising effort lowered costs and same-store sales improved.

The fast-food chain said it has refranchised a net 360 of its restaurants in 2013.

The company also has introduced menu items that helped increase sales in the quarter, namely its Satisfries--a lower-fat, lower-calorie french fries--and its "Big King" burger. Although Burger King offered a sandwich it called Big King for a limited time in 1997, it didn't have a middle bun--but now it does, just like bigger rival McDonald's Corp. Big Mac.

In the latest period, same-store sales grew 1.7%, including an increase of 0.2% in the U.S. and Canada despite a strong prior-year comparison.

Burger King reported a profit of $66.8 million, or 19 cents a share, up from $48.6 million, or 14 cents a share, a year earlier. Excluding franchising-related charges, stock-based compensation and other items, adjusted earnings rose to 24 cents from 23 cents.

Revenue decreased 34% to $265.2 million. Excluding currency fluctuations and refranchising impacts, systemwide rose 5.7%.

Analysts polled by Thomson Reuters expected per-share profit of 23 cents and revenue of $270 million.

Total company restaurant expenses declined 89%.

Burger King also has been aiming to expand internationally, including plans for restaurants in South Africa and nearby countries, as well as joint ventures in France and India.

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