Burger King and Tim Hortons are struggling with a staffing crunch and the Delta variant keeping coffee-loving office workers at home, causing parent Restaurant Brands International Inc. to miss estimates for quarterly revenue on Monday.
Restaurant Brands also faced stiff competition from McDonald’s Corp. and Wendy’s Co. doubling down on marketing and launching new menu items.
“COVID-19 contributed to labor challenges, which in some regions resulted in reduced operating hours and service modes at select restaurants as well as supply chain pressures,” Restaurant Brands said in a statement.
Burger King, like most rivals, has struggled to ensure its restaurants have sufficient staff, with its newly launched hand-breaded chicken sandwich also considered a labor-intensive product.
Wendy’s launched a new ‘Big Bacon Cheddar Cheeseburger’ and reformulated its french fries to keep them crispy for longer earlier this year, while McDonald’s collaborated with boy band BTS and rapper Saweetie to draw customers.
Same-store sales at the Tim Hortons coffee chain, the biggest revenue maker for Restaurant Brands, jumped 8.9 percent in the third quarter, while those at Burger King rose 7.9 percent. Analysts on average had expected increases of 9.8 percent and 9.3 percent, respectively.
Analysts have said marketing behind some Burger King products have been lackluster, with the brand singled out as the biggest drag on Restaurant Brands’ overall performance.
Restaurant Brands said on Monday it expected to continue to invest more in its digital and marketing capabilities, noting a pandemic-led shift to online orders.
Total revenue rose to $1.50 billion in the quarter ended Sept. 30, compared with $1.34 billion a year earlier. IBES data from Refinitiv had estimated revenue of $1.53 billion.
Net income attributable to common shareholders rose to $221 million, or 70 cents per share, from $145 million, or 47 cents per share, a year earlier.
Excluding items, it earned 76 cents per share, beating estimates of 74 cents.
