Burger King announces Whopper of a shares fall

BURGER King Holdings, the second-biggest US hamburger chain, posted a fourth-quarter loss on payments related to its initial public offering in May.

Its shares had their biggest fall ever.

The company had a net loss of $9 million (€7.06m), or 7 cents a share, compared with net income of $2m, or 2 cents, a year earlier. Sales climbed to $533m from $503m, Miami-based Burger King said today in a statement.

Sales at US and Canadian restaurants open at least 13 months rose 2%. Burger King chief executive John Chidsey is trying to expand the restaurant company as McDonald’s Corp and Wendy’s International Inc have introduced new menu items that are driving their US sales growth higher.

“I think it’s going to take another two or three quarters to see how this team is doing,” said Malcolm Knapp, a principal in his own New York-based restaurant-consulting firm.

Chidsey took over in April for Greg Brenneman, who became the second CEO in four years to leave the hamburger chain.

Burger King had 11,129 restaurants worldwide as of June 30, about 90% of which are franchisees.

In the fourth quarter, Burger King had a one-time $30m payment to end a management agreement following the completion of the public offering, which raised $425m.

Excluding the expense, the company would have earned 21 cents a share, Burger King spokeswoman Edna Johnson said.

Burger King introduced a new $1 discount menu in late February, adding items such as Whopper Jr, mozzarella sticks and tacos.

The company plans to open more than 430 restaurants in fiscal 2007, with more than 250 in the Europe, Middle East and Asia Pacific regions, more than 80 in Latin America and more than 100 in the US and Canada.