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Oct 24, 2016

Restaurant Brands International beats profits expectations on new items, lower costs

Restaurant Brands

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Restaurant Brands International Inc (QSR.TO), owner of Burger King and Tim Hortons, reported a better-than-expected quarterly profit, helped by new menu items and lower costs.

Total comparable sales at Burger King rose 1.7 per cent in the quarter ended Sept. 30, mostly due to higher demand in Asia Pacific and Latin America.

The rise was much smaller than the 6.2 per cent rise a year earlier, due to decreased demand in the United States and Canada, where Burger King faces tough competition from food chains such as McDonald's Corp (MCD.N) and Wendy's Co (WEN.O).

U.S. restaurants are also battling intense competition from upstart chains and meal-kit sellers, in addition to getting battered by falling grocery prices, which are encouraging more people to eat at home.

Total comparable sales at Tim Hortons, which operates mainly in Canada, rose 2 per cent in the quarter, compared with a growth of 5.3 per cent last year.

Total costs and expenses for Restaurant Brands fell 3 per cent to $655.2 million.

The company's net profit attributable to shareholders rose to $86.3 million, or 36 cents per share, in the third quarter, from $49.6 million, or 24 cents per share, a year earlier.

On an adjusted basis, Restaurant Brands earned 43 cents per share, beating the analysts' average estimate of 40 cents per share, according to Thomson Reuters I/B/E/S.

Oakville, Ontario-based company's revenue rose 5.5 per cent to $1.08 billion, missing analysts' estimate of $1.06 billion.