I guess that's why they call
Burger King (NYSE: BKC) the home of the
Whopper.
The country's second-largest burger chain quietly ended a
once-impressive streak this week, when it posted its first
quarter of negative comps in more than five years. Global
comps in its fiscal fourth quarter clocked in at a negative
2.4%, after positive showings in each of the 21 previous
periods.
Burger King didn't acknowledge the end of its
DiMaggio-esque streak in its release. The fast-food giant
simply widened its timeline to brag about its streak of six
consecutive fiscal years of positive comps.
The market bought it. Shares of Burger King jumped 6%
higher yesterday, largely the result of the chain's ability
to beat Wall Street's profit expectations.
I'm a bit more cynical. I'll have a Whopper Jr., but hold
the sugar-coated bun. After all, what if there's more to this
mortal slip? What if the recessionary run that found
penny-pinching patrons flocking to value meals is
toast? Â
McDonald's (NYSE: MCD) is holding up
considerably better at the register, but the trend is
undeniable. After watching comps grow by 6.9% in April and
5.1% in May, same-store sales for the entire quarter that
ended in June rose by only 4.8%.
July didn't get in the way of the downtrend, with comps up
by just 4.3% -- and just 2.6% if we limit ourselves to
domestic locations. One can only imagine how bad results at
McDonald's would have been if it hadn't rolled out its
premium McCafe coffees earlier this year, in a push to take
on
Starbucks (Nasdaq: SBUX) and raise the
ceiling on beverage prices.
Burger fans aren't getting a whole lot of help elsewhere.
Wendy's/Arby's (NYSE: WEN) posted a 0.4%
decline in comps at its North American Wendy's restaurants in
its latest quarter.
Red Robin Gourmet Burgers (Nasdaq: RRGB) and
Jack in the Box (Nasdaq: JACK) posted even
lower comps in their latest quarters.Â
The fresher the data, the more troublesome the results.
CKE Restaurants (NYSE: CKR) recently posted
sales metrics for the four weeks ended Aug. 10. Its burger
brands Carl's Jr. and Hardee's posted comps declines of 5.2%
and 1.6%, respectively. Continued... |