Burger King Sales Decline in First Quarter
MIAMI -- Burger King faced a rocky start to 2011 due to falling sales and rising commodity costs, reporting a net loss of $6.8 million for the quarter that ended March 31, according to a Miami Herald report. This is in contrast to the $41 million net profit the chain saw during the same quarter last year. Parent company 3G Capital cited an increase in interest expense due to debt related to its 2010 purchase of the chain as a factor in the loss.
Other factors included $13 million in costs related to the company sale and global restructuring, and a $19.6 million loss due to refinancing of Burger King's senior secured debt.
The company reported revenue of $552 million for the quarter, 8 percent less than the same quarter last year, due to declining sales and refranchising activity over the past 12 months, according to the report.
Same-store sales in North America were down 6 percent, but strong performances in Europe, Asia-Pacific and the Middle East led to only a 3.6 percent decline worldwide.
Burger King has announced a new restaurant remodel program at lower costs and is offering franchisees financial incentives and third party financing to participate. It has also added new value menu items and new products in order to improve restaurant margins, the report said.