(Reuters) -Restaurant Brands International Inc said on Tuesday it expects to further raise prices this year as the Burger King parent tackles higher costs and supply chain disruptions to maintain its profits.
U.S.-listed shares of the company rose about 4% after it topped quarterly results estimates, led by soaring online sales and rebounding demand at its Tim Hortons and Burger King chains.
Restaurants have been hit by higher costs over the last year, as supply chain bottlenecks and staffing shortages increased shipping and labor expenses, while prices of commodities like chicken, coffee and edible oils have also been on the rise.
“Given the level of commodity cost and labor inflation we are seeing, we expect additional price increases in 2022,” Restaurant Brands Chief Executive Officer Jose Cil told analysts on a call.
The company lifted some price caps on select items in 2021 and cut back on some discounts to keep a tight lid on costs.
Tom Curtis, President of Burger King in the U.S. and Canada, said while the brand will look for opportunity for some incremental discounting in the future, “it won’t be every single day”.
The record inflation levels have hit business at major restaurant chains, including burger giant McDonald’s Corp (NYSE:MCD) and coffeehouse chain Starbucks Corp (NASDAQ:SBUX), which have reported downbeat profits for the quarter.
Toronto, Ontario-based Restaurant Brands reported total revenue of $1.55 billion, above estimates of $1.52 billion, on the back of better-than-expected same-store sales growth at Burger King in the United States and Tim Hortons in Canada.
The company reported upbeat revenue despite a decline in U.S. comparable sales at its Cajun-inspired Popeyes chain, which is grappling with stiff competition from rivals such as McDonald’s and Yum Brands Inc’s KFC launching similar menu items.
Restaurant Brands reported per share earnings of 74 cents in the fourth quarter, topping Refinitiv estimates of 69 cents.
Source : Reuters