‘We have four amazing brands’

S4ri Kum

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 sweeping the country, and he won’t even mention the fast-food by name.

“We have four amazing brands that offer amazing products,” Restaurant Brands CEO José Cil told Yahoo Finance Live when asked how he would respond to the Mexican Pizza (video above). “Our culinary team is now looking to continue to innovate and drive guests in with new ideas, but also ensuring that our franchisees do this every day, 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 in addition to cold beverages and donuts. That’s what we are good at and need to focus on, and delivering that consistently will drive consistent growth for our brands.”

Taco Bell owner Yum! Brands said this week Taco Bell U.S. same-store sales rose 8% in the second quarter, fueled by the chain selling 20 million Mexican Pizzas. The menu item — which was discontinued in November 2020 — has proven so popular Taco Bell will bring it back in the fall permanently.

IRVINE, CA - SEPTEMBER 12:  Taco Bell's Mexican Pizza remains a popular item and menu staple.  (Photo by Joshua Blanchard/Getty Images for Taco Bell)

IRVINE, CA – SEPTEMBER 12: Taco Bell’s Mexican Pizza remains a popular item and menu staple. (Photo by Joshua Blanchard/Getty Images for Taco Bell)

Sales at U.S. Taco Bell stores open at least a year jumped 8% in the three months ending June 30. In that period, Taco Bell sold more than 20 million Mexican Pizzas across the country and saw loyalty membership grow 10%, driven largely by customers’ desire for early access to the product.

“Really 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! Brands CEO David Gibbs said on the company’s earnings call.

And despite economic stresses weighing 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 rose 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 rose 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,” Citi restaurant analyst Jon Tower wrote in a note to clients. “While it’s difficult to ascertain the pieces driving the recovery (e.g., Canada reopening vs. 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, particularly as it pertains to a read-across for the Burger King (BK) US business.”

Cil stressed that he is all-in on returning 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,” the Restaurant Brands CEO noted, “and we’re elevating it to its proper status as a key part of our plan for the Burger King U.S. business.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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https://finance.yahoo.com/news/burger-king-ceo-on-taco-bell-mexican-pizza-182636833.html

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