NEW YORK (AP) — Burger King reports its first-quarter results Friday, which should provide an update on the chain's push to win over customers with cheap eats.
WHAT TO WATCH FOR: The Miami-based company warned earlier this month that sales at established restaurants are expected to fall 1.5 percent on the period, including a 3 percent decline in North America. Executives have said they hadn't been emphasizing value enough at a time when rivals were doing just that.
Burger King said it was adjusting its strategy to focus on more deals, such as an offer for a $1.29 Jr. Whopper. McDonald's has been particularly aggressive in touting its Dollar Menu to boost traffic at a time when the restaurant industry is barely growing. Wendy's also revamped its value menu recently.
For the first three months of the year, Burger King has said it expects adjusted earnings of 17 cents per share, an increase of 45 percent from the previous year when it was still private.
WHY IT MATTERS: Burger King has been undergoing a revamp since it was purchased and taken private in 2010 by 3G Capital, a private investment firm run by Brazilian billionaires. 3G has slashed costs, inked international expansion deals and revamped the menu back in the U.S. to appeal to a wider audience. The company has also been selling more restaurants to franchisees, a move that lowers overhead costs. Instead of booking sales from those restaurants, that means Burger King would collect franchise fees instead.
The moves came ahead of the company's return to the New York Stock Exchange this past June. Burger King says its efforts to revamp the brand remain on track. But CEO Bernardo Hees, a 3G partner, is moving on later this year to head Heinz, another 3G investment.
Chief Financial Officer Daniel Schwartz, also a 3G partner, is taking over.
WHAT'S EXPECTED: Analysts on average expect a profit of 17 cents per share on revenue of $305.8 million, according to FactSet.
LAST YEAR'S QUARTER: Burger King Worldwide Inc. earned 5 cents per share on revenue of $569.9 million in the year-ago period when it was a private company, according to FactSet.