Burger King earnings buoyed by Whoppers overseas

Brian Sozzi

Burger King sales are stalling in the U.S. but delivering Whopper-sized gains overseas as key markets recover from the depths of the pandemic.

The burger brand's "rest of the world" same-store sales surged 20.1% in the first quarter, parent company Restaurant Brands reported on Tuesday, marking the quickest pace of sales growth out of any of Restaurant Brands' fast-food banners — which includes Tim Horton's, Firehouse Subs, Popeyes.

Burger King overseas saw double-digit percentage sales growth in France, Spain, Germany, Korea and Brazil while seeing softness in China amid COVID-19 lockdowns in the country.

"Across regions and some of the key markets that we have, larger markets, Spain, Korea, and several others, we've seen a combination of good work on the menu side, continued growth on the digital front," Restaurant Brands CEO Jose Cil told analysts on an earnings call. "Off-premise continues to be a strong part of our growth, with delivery as well as some curbside and digital rewards type of programs. And then, macro improvements with restrictions easing and mobility picking up has helped us drive growth as well in those markets. And what we're seeing is in-store dining in many of those markets, which is such a big part of the business, is snapping back. So the combination of good plans, good digital and good kind of macro environment has been positive for that business, and we feel confident in the long-term there."

MUNICH, GERMANY - JUNE 15: The promotional figure
The promotional figure "The King" wears fake jewelry depicting the Burger King logo during the opening of the first European Whopper Bar on June 15, 2009 in Munich, Germany. Customers can choose from over 20 toppings for their Whopper burgers. (Photo by Miguel Villagran/Getty Images) (Miguel Villagran via Getty Images)

By comparison, Burger King's U.S. same-store sales fell 0.5% as the brand continues to execute a turnaround under a new division leader.

Here's how Restaurant Brands performed compared to Wall Street estimates for the first quarter:

  • Net Sales: $1.45 billion vs. $1.41 billion

  • Adjusted Operating Profits: $530 million vs. $537.8 million

  • Diluted EPS: $0.64 vs. $0.62

All that said, Restaurant Brands stock was under pressure on Tuesday after the company took a $12 million operating profit hit from its operations in Russia, where it has suspended corporate operations.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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