MIAMI Burger King Holdings Inc. lowered its full-year profit guidance, citing the weak economy and the possible affect of the swine flu outbreak that started in Mexico, despite a third-quarter profit increase of 14.6 percent.
Burger King said Wednesday that its net income for the quarter ended March 31 rose to $47 million, or 34 cents per share, from $41 million, or 30 cents a share.
In its guidance for the rest of the company’s fiscal year, which ends in June, Burger King forecast a per-share profit of between 34 cents and 37 cents in the fourth quarter. The company lowered its full-year outlook to between $1.39 and $1.42 per share, from previous expectations for earnings between $1.44 and $1.49 per share. The company cited “ongoing market challenges and unknown potential effects of the swine flu situation.”
Burger King has 390 restaurants in Mexico, including 84 corporate locations.
As reported earlier this month, Burger King’s third-quarter revenue rose 1 percent, to $600 million. The company said sales were strong in January and February but slowed in March. Quarterly same-store sales rose 1 percent worldwide and 1.6 percent in the United States and Canada.
Fast-food chains have benefited from consumers “trading down” to lower priced restaurant offerings. Burger King had showed strong sales, as had burger leader McDonald’s Corp., but Burger King’s momentum slipped in March. While it’s quarterly same-store sales rose 1 percent, competitor McDonald’s reported same-store increases of 4.3 percent globally and 4.7 percent in the United States, for the same three months.
“While we performed well in January and February, the unexpected decline in March traffic across many of the countries in which we operate, particularly the Germany and Mexico markets, adversely affected our results,” John Chidsey, chairman and chief executive officer for Burger King Corp., said in a statement. “Although disappointed in our company restaurant margins, we are pleased to have been able to offset the earnings impact with continued revenue growth, general and administrative cost reductions, lower interest expense and tax savings.”
Burger King owns or franchises more than 11,800 restaurants worldwide.
Contact Ron Ruggless at [email protected].
