Burger King Worldwide reported a whopping 83 percent drop in third-quarter net profit as the fast-food giant pushes to turn around its hamburger-flipping business.
The Associated Press reported that net income for the three months through September fell to $6.6 million, or 2 cents per share, from $38.8 million, or 11 cents per share, a year earlier.
Excluding what the Wall Street Journal described as “realignment charges,” net profit stood at 17 cents per share, compared with analyst forecasts of 15 cents per share.
Burger King, which returned to the public market in June after a $1.4 billion cash deal with UK investment vehicle Justice Holdings, said revenue dived 26 percent to $451.1 million, beating Wall Street’s expectations for $439.7 million.
Same-store sales at company-owned or franchise restaurants opened at least 13 months rose 1.4 percent, better than the 1.2 percent predicted by many analysts.
The third-largest burger chain in the United States after McDonald's and Wendy's is selling restaurants to franchisees to reduce overhead costs and improve its profit margins.
It has also been seeking to broaden its appeal beyond fast food-loving 20-something-year-old males with a celebrity-studded marketing campaign and new menu items such as fruit smoothies and salads that appeal to women, Reuters reported.
But Burger King, best known for its Whopper hamburger, is not the only fast-food chain doing it tough.
McDonald's just reported its worst quarterly sales growth performance in nine years. The reasons are partly economic. The weak U.S. economy and high unemployment rate means people can't afford to eat out as much as before.
But rivals, such as Yum Brand's Taco Bell and Chipotle Mexican Grill, are stealing customers with new menu items or better-quality food that costs just a little bit more than a greasy hamburger.