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Burger King Earnings Soar as Expenses Fall

April 27, 2013 by Leave a Comment

Burger King’s first-quarter earnings more than doubled even though revenue fell, as the fast-food chain trimmed several restaurant-related expenses.

The Miami-based company had warned earlier this month that sales at established restaurants were expected to fall during the quarter, and they wound up declining 1.4 percent. That includes a 3 percent drop in the United States and Canada.

Burger King said competition and a strong first quarter last year hurt U.S. and Canadian sales comparisons to this year’s quarter. But it said sales from those countries rallied in March due in part to promotions like the $1.29 Whopper Jr.

The company has been adjusting its strategy to focus on more menu deals like that. McDonald’s has been particularly aggressive in touting its Dollar Menu to boost traffic at a time when the restaurant industry is barely growing. Wendy’s also revamped its value menu recently.

Overall, Burger King Worldwide Inc. said Friday its net income rose to $35.8 million, or 10 cents per share, in the quarter that ended March 31. That’s up from $14.3 million, or 4 cents per share, in the previous year’s quarter when it was still private.

The company previously said adjusted earnings, which don’t count certain one-time expenses, totaled 17 cents per share in the most recent quarter.

Revenue fell about 42 percent to $327.7 million. Analysts expected $305.8 million, according to FactSet.

Total restaurant expenses, which include things like food costs and payroll expenses, fell nearly 70 percent in the quarter to $108.1 million.

Burger King has been undergoing a revamp since it was purchased and taken private in 2010 by 3G Capital, a private investment firm run by Brazilian billionaires. The company has been selling more restaurants to franchisees, a move that lowers overhead costs. Instead of booking sales from those restaurants, that means Burger King would collect franchise fees instead.

In the first quarter, the company’s restaurant revenues tumbled 69 percent to $121.1 million, but its franchise and property revenues rose 19 percent to $206.6 million. The company sold 33 company-owned restaurants in the U.S. and Canada to franchisees during the quarter for $9.3 million.

Burger King said about 97 percent of its restaurants are owned and operated by independent franchisees.

The company’s selling, general and administrative expenses also fell about 30 percent to $66.7 million in the quarter.

3G Capital also has slashed costs, signed international expansion deals and changed the U.S. menu to appeal to a wider audience. The moves came ahead of the company’s return to public trading on the New York Stock Exchange last June.

Burger King says its efforts to revamp the brand remain on track. But CEO Bernardo Hees, a 3G partner, is moving on later this year to head Heinz, another 3G investment. Chief Financial Officer Daniel Schwartz, also a 3G partner, will succeed Lees as CEO at Burger King.

Burger King shares rose 21 cents, or 1.2 percent, to close at $18.27 Friday. They have traded between $12.91 and $20.20 since relisting.

Article source: http://www.nytimes.com/aponline/2013/04/26/business/ap-us-earns-burger-king.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

‘Eat More Kale’ T-Shirts Challenged by Chick-fil-A

December 5, 2011 by Leave a Comment

So when Chick-fil-A, the fast-food chain that says it sells 537 sandwiches a minute with the help of the slogan “Eat mor chikin” (the words have been penned by cows), sent him a cease-and-desist letter this fall, Mr. Muller-Moore decided to fight the company, setting off a groundswell of local support and national media attention.

“This is corporate bullying,” Mr. Muller-Moore said. His lawyer, Daniel Richardson, sent Chick-fil-A a letter in November, contesting its claim that the slogan “is likely to cause confusion of the public and dilutes the distinctiveness of Chick-fil-A’s intellectual property.”

Chick-fil-A does not have any stores in Vermont. The closest one is in Nashua, N.H., about 120 miles from Montpelier, where Mr. Muller-Moore, an Alabama native, has lived for years. He began making the shirts in 2000, at the suggestion of a local farmer. The few dozen printed at first have swollen into thousands of orders filled every year, he said, but he still works out of the overflowing studio above his garage, buying his art supplies nearby.

“Someone called me a Vermont institution, and it made me blush,” said Mr. Muller-Moore, who has received plenty of local help. His legal representation has been pro bono; a local soup purveyor put a petition on Change.org; and a onetime aide to former Gov. Jim Douglas is assisting him with public relations. And the current governor, Peter Shumlin, has also thrown his support behind the cause and was planning to appear with Mr. Muller-Moore at a news conference.

Mr. Muller-Moore has also taken to Facebook to rally fans of his work, who posted on his wall, sent supportive e-mails and put more than 16,000 signatures on the petition in just over two weeks. Their motivations varied, he said.

“There are certainly the purists and they think of kale as this superfood,” Mr. Muller-Moore said. “I think other people see it as more of this local food movement. I think, in Vermont, other people see it as a shirt printed by Bo down the road.”

For those supporters, the message is simple: Don’t mess with Bo, and don’t mess with Vermont. “I think I’ve given away enough stickers and shirts around here that Vermonters take this very personally,” Mr. Muller-Moore said.

It is a place that prides itself on an artisanal, local business culture and, Mr. Muller-Moore says, is “very supportive of its artists and what it deems as its own.”

In 2009, the Rock Art Brewery, in Morrisville, Vt., received a letter from Hansen Beverage Company, which owns Monster Energy drinks, saying the microbrewery’s Vermonster beer violated their trademark.

Matthew Nadeau, the brewery’s president and co-founder, said one of the state’s largest beverage stores immediately boycotted Hansen’s beverages. “This is the biggest store in the state and they’re standing behind us, so we knew we weren’t going to fight alone,” Mr. Nadeau said.

That story spread on social and traditional media and Vermont’s senators, Bernard Sanders and Patrick J. Leahy, got involved. Mr. Leahy wrote legislation that required the government to survey how trademark law is used by large corporations, though Mr. Nadeau lamented that it was not distributed widely enough to solicit many responses from small businesses. The two sides eventually came to an agreement without litigation, and Rock Art continued to use the Vermonster name.

Chick-fil-A sent Mr. Muller-Moore a warning once before, in 2006, but did not pursue that matter. Now, Mr. Muller-Moore and Mr. Richardson are awaiting a response from the company, and they plan to continue with their trademark application.

In a statement, Chick-fil-A said, “We must legally protect and defend our ‘Eat mor chikin’ trademarks in order to maintain rights to the slogan.”

But Mr. Richardson does not think the company’s argument would hold up in trademark court. “We believe it’s pretty clear, the issue of dilution and confusion aren’t really triggered here,” he said. “There’s no one out there that’s going to come forward and say, ‘I thought I was buying a Chick-fil-A product but I got this T-shirt.’ ”

For Mr. Muller-Moore, the fight is about those T-shirts, and his small business — not kale. Although he does not mind kale.

“If it’s cooked well, it’s good,” he said. “If it’s cooked poorly, no thank you.”

Article source: http://feeds.nytimes.com/click.phdo?i=1325100eda76c2afe65fc3c6aedf3396

Filed Under: Business News Tagged With: , ,

Radioactive Hot Spots in Tokyo Raise Fears of Wider Contamination

October 15, 2011 by Leave a Comment

Then came the test result: the level of radioactive cesium in a patch of dirt just yards from where his 11-year-old son, Koshiro, played baseball was equal to those in some contaminated areas around Chernobyl.

The patch of ground was one of more than 20 spots in and around the nation’s capital that the citizens’ group, and the respected nuclear research center they worked with, found were contaminated with potentially harmful levels of radioactive cesium.

It has been clear since the early days of the nuclear accident, the world’s second worst after Chernobyl, that that the vagaries of wind and rain had scattered worrisome amounts of radioactive materials in unexpected patterns far outside the evacuation zone 12 miles around the stricken plant. But reports that substantial amounts of cesium had accumulated as far away as Tokyo have raised new concerns about how far the contamination had spread, possibly settling in areas where the government has not even considered looking.

The government’s failure to act quickly, a growing chorus of scientists say, may be exposing many more people than originally believed to potentially harmful radiation. It is also part of a pattern: Japan’s leaders have continually insisted that the fallout from Fukushima will not spread far, or pose a health threat to residents, or contaminate the food chain. And officials have repeatedly been proved wrong by independent experts and citizens’ groups that conduct testing on their own.

“Radioactive substances are entering people’s bodies from the air, from the food. It’s everywhere,” said Kiyoshi Toda, a radiation expert at Nagasaki University’s faculty of environmental studies and a medical doctor. “But the government doesn’t even try to inform the public how much radiation they’re exposed to.”

The reports of hot spots do not indicate how widespread contamination is in the capital; more sampling would be needed to determine that. But they raise the prospect that people living near concentrated amounts of cesium are being exposed to levels of radiation above accepted international standards meant to protect people from cancer and other illnesses.

Japanese nuclear experts and activists have begun agitating for more comprehensive testing in Tokyo and elsewhere, and a cleanup if necessary. Robert Alvarez, a nuclear expert and a former special assistant to the United States secretary of energy, echoed those calls, saying the citizens’ groups’ measurements “raise major and unprecedented concerns about the aftermath of the Fukushima nuclear disaster.”

The government has not ignored citizens’ pleas entirely; it recently completed aerial testing in eastern Japan, including Tokyo. But several experts and activists say the tests are unlikely to be sensitive enough to be useful in finding micro hot spots such as those found by the citizens’ group.

Kaoru Noguchi, head of Tokyo’s health and safety section, however, argues that the testing already done is sufficient. Because Tokyo is so developed, she says, radioactive material was much more likely to have fallen on concrete, then washed away. She also said exposure was likely to be limited.

“Nobody stands in one spot all day,” she said. “And nobody eats dirt.”

Tokyo residents knew soon after the March 11 accident, when a tsunami knocked out the crucial cooling systems at the Fukushima plant, that they were being exposed to radioactive materials. Researchers detected a spike in radiation levels on March 15. Then as rain drizzled down on the evening of March 21, radioactive material again fell on the city.

In the following week, however, radioactivity in the air and water dropped rapidly. Most in the city put aside their jitters, some openly scornful of those — mostly foreigners — who had fled Tokyo in the early days of the disaster.

But not everyone was convinced. Some Tokyo residents bought dosimeters. The Tokyo citizens’ group, the Radiation Defense Project, which grew out of a Facebook discussion page, decided to be more proactive. In consultation with the Yokohama-based Isotope Research Institute, members collected soil samples from near their own homes and submitted them for testing.

Matthew L. Wald contributed reporting from Washington, and Kantaro Suzuki from Tokyo.

Article source: http://www.nytimes.com/2011/10/15/world/asia/radioactive-hot-spots-in-tokyo-point-to-wider-problems.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,