Restaurant Brands CEO explains how Burger King plans to rebound in the U.S.

Brian Sozzi

Burger King has put up a stretch of lukewarm sales domestically, and the parent company's CEO tells Yahoo Finance Live that a turnaround is being grilled up with new leadership and a better menu.

The Restaurant Brands-owned Burger King saw U.S. same-store sales fall 0.5% in the first quarter following a 1.8% increase in the fourth quarter. Looked at another way, this could be seen as sales stabilizing after several challenging quarters.

"It's not a victory lap, for us growth and leading the industry is the goal," Restaurant Brands CEO Jose Cil said (video above). "We want to create gaps, not close them. It's a starting point of the turn. What we are doing is focusing on the core iconic product of Burger King, the Whopper. We removed it from our core discount platform, the 2 for $6. We brought new items into that platform, reduced the price for 2 for $5 and highlighted the Whopper as it should be, as a core iconic flagship product of Burger King. We brought in Whopper melts and are limiting our messaging to fewer, but more impactful messages and promotions."

A paper crown is seen at a Burger King restaurant. REUTERS/Jorge Silva
A paper crown is seen at a Burger King restaurant. REUTERS/Jorge Silva (Jorge Silva / reuters)

The efforts already appear to be taking hold overseas.

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

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

Wall Street is staying hopeful on the fast food chain's U.S. business turnaround.

"As it pertains to the quarter itself, we found results to be largely in-line with investor expectations across the brands; with the standout item coming in the form of the Burger King rest of world same-store sales result which represented a significant sequential acceleration across its multi-year comp stacks," Deutsche Bank analyst Brian Mullan said.

The analyst — who reiterated his buy rating on Restaurant Brands shares — said the company's getting back to basics efforts are now entering phase two.

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

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