The fast-food chain and home of the Whopper has been working to revive its menu and marketing strategy to expand beyond its core market of men in their early 20s. New restaurant designs and fresher food like salads, fruit smoothies and chicken snack wraps have also helped in that respect.
Burger King, which came back to the stock market in June, said sales at locations open at least a year rose 1.4% in the third quarter, helped out by its limited-time menu items, like the summer BBQ-themed and chicken ones, and by its progress in attracting a more diverse customer base.
The company acknowledged that, like the rest of the industry, it saw a deceleration from the second quarter, citing "more-challenging prior-year comparisons and the loss of some value-based traffic."
Burger King has said it plans to sell nearly all of its company-owned restaurants to franchisees by the end of this year as it looks to shift to a more "asset light" model. The franchise strategy helps insulate restaurant companies from the volatility of commodity costs and other burdens, providing a more steady income stream from royalty fees.
As the U.S. fast-food market becomes increasingly competitive, Burger King is looking to international markets for much of its growth. Nearly half of its locations are abroad currently, with all the segments reporting growth in sales at established locations except for the Asia-Pacific region.
Burger King profit fell to $6.6 million, or 2 cents a share, from $38.8 million, or 11 cents, a year earlier. Excluding business-combination expenses, realignment project costs and other items, adjusted per-share earnings rose to 17 cents from 16 cents.
Revenue dropped 26% to $451.1 million. "Organic" revenue, which strips out acquisitions, divestitures and the effects of foreign exchange, grew 0.2%, excluding the impact of re-franchising.
Systemwide same-store sales rose 1.4%.
Company restaurant profit margin fell to 11.6% from 12.4%.
Also Monday, the company initiated a quarterly cash dividend of four cents a share
Burger King returned to the public market in June after a $1.4 billion cash deal with U.K. investment vehicle Justice Holdings Ltd. The New York-based private-equity firm 3G Capital Management LLC—which initially paid $3.3 billion in 2010 to take Burger King private—remains Burger King's principal shareholder with a 71% stake.