Tulsa World: Burger King's trends

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Burger King's trends
At first blush, Burger King's recently reported fourth-quarter results look downright tasty, with earnings topping analysts' estimates.

Signs hang in the window of a Burger King restaurant in Mexico City. Profit margins at Burger King Holdings Inc., the world's second-largest hamburger chain, have plunged in recent months, so McDonald's and Yum! might be more preferable as restaurant stocks. Susana Gonzalez / Bloomberg News

By MOTLEY FOOL
Published: 9/21/2009 2:22 AM
Last Modified: 9/21/2009 4:38 AM

When looking deeper into the report, however, Burger King's results didn't quite hit the spot. Sales trends remain dismal. Fourth-quarter sales fell 15.8 percent versus the year-ago quarter, and global sales at locations open a year or more decreased 2.4 percent. U.S. and Canadian restaurants saw a decline of 4.5 percent. Still, for fiscal 2009, the company achieved some success, including worldwide sales growth of 1.2 percent at units open a year or more and a 28 percent increase in operating cash flow.

Management's near-term outlook was less than reassuring, though. It declined to provide expected numbers for fiscal 2010, citing "consumer uncertainties," but reiterated annual long-term growth targets of 6 percent to 7 percent for revenue and 15 percent for EPS.

The stock looks reasonably priced based on next year's earnings estimates, with a forward P/E ratio of less than 13. Unfortunately, with sales trends and operating expenses moving in the wrong direction, analysts may become more pessimistic in the months ahead.

For those seeking appetizing quick-serve restaurant stock, McDonald's or Yum! Brands may be preferable. Either will quench your thirst for international growth and is better-positioned for the weak consumer demand in the U.S. By MOTLEY FOOL

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	Report Comment Aggie, (9/21/2009 9:17:41 AM) It's because whatever oil is used for their fries and onion rings makes these foods taste awful! Where does this oil come from? Do they drain it out of an old VW Beetle?
	Report Comment turtle6602, (9/21/2009 9:40:04 AM) It is the same criso you get at the store.
	Report Comment SS_Hippy, Tulsa (9/21/2009 9:51:22 AM) The king is creepy
	Report Comment Arbythree, Tulsa (9/21/2009 10:36:39 AM) I am thinking Arbys.
	Report Comment SS_Hippy, Tulsa (9/21/2009 10:39:18 AM) YOU would be!
	Report Comment Mar, Tulsa (9/21/2009 10:54:08 AM) Personally I don't care for Burger King, their burgers always gave me indigestion from the charcoal grill flavor. Also, their King gives me the creeps. If I want a fast-food burger, I go to Wendys. Otherwise for great burgers (made with real beef) I prefer Goldies, Chili's, Applebees, The Brook, Webers, Backyard Burgers etc.
	Report Comment Few Clothes, America (9/21/2009 11:34:49 AM) What? The the dead animal sandwiches are selling as briskly as everyone thought? Tsk! Tsk!
	Report Comment Few Clothes, America (9/21/2009 11:36:09 AM) OOPS! delete the are and insert aren't.
	Report Comment Ric, Broken Arrow (9/21/2009 12:08:11 PM) I like a good Whopper from time to time, just like a good Fish Sandwich. But, McDonalds has the good ol' fish sandwich.
	Report Comment Terree, Tulsa (9/21/2009 12:37:38 PM) a whopper tastes pretty good at 2 in the mornign when the bars close..lol...
	Report Comment my view, Sand Springs (9/21/2009 1:48:51 PM) All these places will be out of business as soon as they get the fat tax passed. Do you think they'll stop at soda pop? I don't. We're not grownup enough to manage our own health we need government to do it for us. Webers and Sonic makes the best burgers in the area. I want grease dripping off mine just like the old days.
	Report Comment red02v, (9/21/2009 2:20:06 PM) Thank god the govt. is there to protect me! I was thinking a Ron's special sounded good.
	Report Comment LocalBoy, B.A. (9/21/2009 2:25:08 PM) "global sales at locations open a year or more decreased 2.4 percent." "worldwide sales growth of 1.2 percent at units open a year or more" EXCUSE ME, what is th difference between "global" and "worldwide"? Whatever it is, it would seem to be having significantly idffering impact on sales.
	Report Comment LocalBoy, B.A. (9/21/2009 2:26:43 PM) "differing" -- my kingdom for an "edit" button.
	Report Comment LocalBoy, B.A. (9/21/2009 2:27:23 PM) "difference" - oh, whatever...
	Report Comment Cooldaddy, Broken Arrow (9/21/2009 2:49:52 PM) I likes BK's Whoppers. They gooood!!
	Report Comment Ric, Broken Arrow (9/21/2009 3:41:55 PM) Tried Scott's Hamburgers in Bixby?
	Report Comment shaw411, Scottsdale, AZ (9/21/2009 4:41:48 PM) I miss Burger Chef and Griff's
	Report Comment Source_Code, (9/21/2009 8:14:36 PM) McDonald's? Where's the Beef?
	Report Comment Daniel Day Simpson, Edmond (9/22/2009 6:08:38 AM) I went in with what I thought was a valid coupon. It did not have an expiration date on it. I took it into the Edmond B.K. and they rude, nasty lady behind the counter not only told me that it was no longer valid, in her vile meaningless life she said she was tired of people bringing them in. I was prepared to go ahead and purchase a meal but I walked across 33rd to McDonalds and got a Southwest Ranch salad instead. I will never darken the doors of another B.K. for the rest of my life.
	Report Comment olddude, tulsa (9/22/2009 6:25:15 AM) Does anyone cook at home anymore?my wife does.not to say we don't eat out,but not fast food.
	Report Comment The Bug, Tulsa (9/22/2009 7:37:48 AM) I have now become a Smashburger addict. Now in two locations in South Tulsa. Holy cow, they're good. Smashburger for burgers and Which Wich of hoagies. Man, it's a long time until lunch... ;)

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