Why Burger King’s revenues increased in 3Q14



Overall revenues

Burger King (BKW) reported revenues of $278.9 million in the third quarter. Revenues grew 1.4% year-over-year (or YoY) from $275.1 million—compared to the same quarter last year. Revenues from franchise and property grew 5% to $260 million YoY. Revenues from company-operated restaurants declined 30% to $18 million YoY.

The highest growth came from the Asia Pacific (or APAC) segment. It was followed by the Europe, the Middle East, and Africa (or EMEA) segment. The Latin America segment was third. The US and Canada segment had a 3% decline in revenues. This can be seen in the chart below.

BKW Segment-Wise Revenues 2014-11-11

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US and Canada

The company reported revenues of $166.8 million in the US and Canada segment. The revenues declined 3%—compared to $172 million in the same quarter last year. According to the company, this was down due to differences in the timing of revenues and the franchise fee.


In the EMEA segment, revenues grew 8% from $71 million to $77 million YoY. This section was mainly driven by Turkey, Spain, and the United Kingdom. The company ran the Double Deals promotion in Turkey during the quarter. It also ran the premium burger series. In the United Kingdom, BKW had Summer BBQ—an extension of its US offerings. Value meals also drove sales.

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Latin America

The Latin America segment only grew 3.8% YoY to $19 million from $18 million—compared to the same period last year. The company experienced softer sales in Mexico. This was due to lower traffic. In Puerto Rico, it was due to the economic slowdown.

Asia Pacific

Finally, the segment with the most growth was APAC. It had a revenue growth of 19%. It grew to $16 million from $14 million—compared to the same period last year. According to the company, sales in this region were mainly driven by Australia.

During the quarter, the company also opened its first store in India. Several fast food players—like McDonald’s (MCD) with 250+ restaurants, Yum! Brands (YUM) with 700+ restaurants, and Domino’s Pizza (DPZ) with 600+ restaurants—established a presence in India several years ago. MCD and YUM are both included in the Consumer Discretionary Select Sector SPDR (XLY).

In the next part of this series, we’ll take a look at Burger King’s expenses for the quarter.


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