Burger King, Wendy's, Red Robin Savor Their Special Sauce
The market's getting a broader snapshot of the burger restaurant industry as Burger King Worldwide (BKW), Wendy's (WEN) and Red Robin Gourmet Burgers (RRGB) reported quarterly results over the past few days.
It hasn't been a perfect showing, but it seems as if the burger niche itself is holding up a lot better than McDonald's, which has tormented investors with four consecutive quarters of negative U.S. comparable-restaurant sales.
Crowning the King
Burger King posted healthy financial results after Tuesday's market close. Systemwide sales grew 7.7 percent, fueled by 152 more restaurants open now than there were a year ago and a 2.4 percent uptick in comparable sales. There are now nearly 14,000 Burger King locations worldwide.
Burger King is almost the anti-McDonald's these days. It's coming off four consecutive quarters of positive comps, contrasting the four-quarter slide at McDonald's. Burger King is crediting the rollout of the A1 Ultimate Bacon Cheeseburger and the return of Chicken Fries to its magnetism at a time when the new gourmet offerings at McDonald's aren't gaining traction. Burger King points to its King Deals value menu as a growing source of sales at a time when McDonald's is conceding that it needs to get back to emphasizing its own bargain offerings.
Red Robin's Yummy Earnings
Shares of Red Robin Gourmet Burgers shot 16 percent higher on Tuesday after it posted blowout results. Red Robin's profit of 50 cents a share obliterated Wall Street expectations of a mere 36 cents a share. Systemwide sales grew 5.2 percent, assisted by a 0.9 percent increase in comparable-restaurant sales.
Red Robin Gourmet Burgers isn't technically a fast-food chain; it falls under the casual-dining umbrella, given its waitstaff and table service. However, it has been expanding its Burger Works concept, where folks order from a limited menu at a counter -- just like at Burger King, McDonald's and Wendy's.
We Want the Redhead
Wendy's wrapped up the burger week with its report on Thursday. It wasn't the blowout that we saw at Red Robin or even the reasonable performance that we saw at Burger King, but it still held up better than the Golden Arches.
Wendy's experienced a 2 percent increase in comps at company-owned locations. Profitability fell short of expectations, but Wendy's is in the process of updating the decor of its eateries and handing over its owned Canadian locations to franchisees. There are a lot of moving parts to what's going on at Wendy's, but at least we're seeing it stepping in the right direction. It was comfortable enough with its performance and outlook for continuing growth in 2015 to raise its quarterly dividend by 10 percent.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. For a list of high-yielding dividend stocks to complement your portfolio, check out our free report.