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Burger King earnings suffer from weak dollar
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NEW YORK - Rising Whopper sales failed to translate into bottom-line dollars for Burger King Holdings Corp. in the fiscal second quarter, the fast-food chain said Thursday.
The nation's No. 2 hamburger chain reported that profit fell and missed Wall Street's expectations by 4 cents per share, as the result of a stronger dollar.
Chief Executive John Chidsey said during a conference call with investors that the magnitude of the exchange-rate hit "was more than we forecast or could have anticipated."
The Miami-based company also cut its full-year profit guidance, saying that as long as the dollar remained strong against other currencies, that would hurt Burger King's profit and cut into the benefit fast-food companies are seeing from consumers seeking value during the recession.
Shares tumbled $1.35, or 6.2 percent, to close at $20.51.
The company said the currency translation hurt profit by 5 cents per share in the quarter ended Dec. 31.
The company earned $44 million, or 33 cents per share, compared with $49 million, or 36 cents per share, a year earlier.
Burger King said that, because of the dollar's strength, it now expects to earn between $1.44 and $1.49 per share in 2009, down from $1.54 to $1.59 per share. Analysts expect $1.52 per share.
High beef and cheese costs led the company to test a higher-price Whopper Jr. burger in some markets last year. Chidsey said that the company has no plans to take that pricing nationwide.
But he said that the company will keep testing changes to the value menu.
Revenue rose 3 percent, to $634 million, from $613 million in the year-ago period.
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