Burger King Worldwide Inc (BKW)’s Focus on Coffee Should Reward Shareholders

In the fourth quarter, Burger King announced that same store sales had increased 2.7%. For the full fiscal year, same store sales increased 3.2%. Burger King will continue to see these positive trends with strength in new products. The company introduced chicken nuggets in January in another move aimed at Wendy’s and McDonald’s.

Another benefactor of the increasing same store sales at Burger King is publicly-traded Carrol’s Restaurant Group, Inc. (NASDAQ:TAST). Carrol’s is the largest franchisee of Burger King in the world, with over 550 locations. The company saw third quarter sales increase 87% to $169.5 million, thanks in large part to the acquisition of 278 additional Burger King restaurants. Carrol’s is a key beneficiary of Burger King’s goal to be 100% franchised.

In Carrol’s third quarter earnings, the company reported a same store sales increase of 6.2% in its legacy restaurants. This marked the fifth consecutive quarter of positive same store sales for the company. It seems Carrol’s continues to believe in the long term growth of the Burger King chain and brand. Recently the company spun off two other restaurant concepts into a separate company, so it could focus on Burger King.

Ultimately the restaurants competing in the coffee business are attempting to take market share from Starbucks Corporation (NASDAQ:SBUX). While Burger King will try to sell more coffee to customers and get people to come enjoy its products rather than a trip to the local Starbucks, it will directly be helping the Seattle-based coffee chain. Back in 2003, Starbucks purchased Seattle’s Best, a small regional coffee chain, for $72 million. Since 2010, Burger King has had a partnership to offer Seattle’s Best branded coffee in all of its locations.

Exciting things are happening at Burger King and investors still have time to get in on this re-listed public restaurant company. Coffee sales will pick up and could help Burger King take away and regain market share from Wendy’s and McDonald’s respectively.

The article Burger King’s Focus on Coffee Should Reward Shareholders originally appeared on Fool.com and is written by Chris Katje.

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