Ask the ultra-competitive CEO of Restaurant Brands, which owns Burger King, Popeyes, Firehouse Subs and Tim Hortons, about the Taco Bell Mexican Pizza craze that is sweeping the country, and he won't even mention the fast-food by name.
The restaurant brand has four amazing brands that offer amazing products, CEO Jos Cil told Yahoo Finance Live when asked how he would respond to the Mexican Pizza video above. Our culinary team is now looking to innovate and drive guests in with new ideas, but also ensure that our franchisees deliver core products that people love. So the Whopper the Popeyes chicken sandwich, the Hook Ladder at Firehouse, and the loaded bowls and wraps at Tim Horton's are included in addition to cold beverages and donuts. We need to focus on, and deliver that consistently, to drive growth for our brands, and that is something we need to focus on. Taco Bell owner Yum! Brands said this week that Taco Bell U.S. same-store sales increased 8% in the second quarter, fueled by the chain selling 20 million Mexican pizzas. The menu item that was discontinued in November 2020 has proven that popular Taco Bell will bring it back in the fall.
Sales at U.S. Taco Bell stores opened at least a year increased by 8% in the three months ending June 30. During the same period, Taco Bell sold more than 20 million Mexican pizzas across the country and saw loyalty membership grow by 10%, due to customers desire for early access to the product.
The benefit of things like the Mexican Pizza is the connection it has with consumers, the love they have for the product and the halo it provides to the brand, Yum! David Gibbs, CEO of Brands, said on the company's earnings call.
Despite economic stresses on lower-income consumers, Restaurant Brands solid second quarter suggests it may not need to dazzle up its menu with social media friendly foods a-la Taco Bell.
Same-store sales increased 12.2% at Tim Hortons on the back of new menu items like food bowls in Canada, 10% at Burger King due to overseas momentum, and 1.4% at Popeyes. Sales at all three fast-food chains beat Wall Street analyst estimates handily. The company beat analyst sales estimates by $70 million and earnings per share projections by 9 cents.
Shares of Restaurant Brands increased by more than 7% in Thursday's session, as investors cheered the strong sales gains overseas.
Credit where it is due: the Tim Hortons Canada turnaround is underway, according to Citi restaurant analyst Jon Tower. It is difficult to determine the pieces driving the recovery e.g. Canada is reopening versus idiosyncratic drivers like increased ad spending, new product news or a broader push into cold beverage, the multi-quarter improving trend should not be ignored, especially as it pertains to a read-across for Burger King BK US business. Cil stressed that he is all in favor of bringing back the Whopper to its rightful place in fast-food by improving the product's quality and launching brand extensions.
The Whopper has been a core product since 1957, according to the CEO of Restaurant Brands, and we're elevating it to its proper status as a part of our plan for the Burger King U.S. business. You can follow Sozzi on Twitter and LinkedIn.