The 'Children' Running Burger King Are Winning; Should More Fortune 1000s Get Younger Leadership?

Doubts about a young executive team have diminished as it continues to improve the outlook for Restaurant Brands International.
By Mary Ellen McGonagle ,

Fourteen months ago, Bloomberg ran a cover story: "Burger King is Run by Children." Fast forward to today, and you can see that any skepticism regarding the age of the then-32-year-old CEO Daniel Schwartz and his 28-year-old CFO Josh Kowba was overstated. (The average age of a Fortune 1000 CEO is 53.)

Restaurant Brands International (QSR) - Get Report , which is parent to Burger King as well as Canadian coffee and doughnut chain Tim Hortons, reported third-quarter earnings last week, and it was a triumphant moment for the young management team. Earnings grew 21% over last year and beat analyst's estimates. Since acquiring Tim Hortons in 2014, the company has over 19,000 restaurants in close to 100 countries.

Much of the company's recent earnings growth can be attributed to bold menu additions at Burger King in the U.S., such as Fiery Chicken Fries and Extra Long Jalapeno Cheeseburger. The company has also been innovative in other countries as well; take the All Black Burger in Japan, which features an A-1 sauce-infused black-colored burger bun and has caused quite a buzz there.

Perhaps it's his lack of experience in fast food that has helped the now-33-year-old CEO bring a fresh perspective to the company. Beginning in 2013, he showed his Wall Street background by initiating deep cost cuts throughout the company. With cash flow improved, the company was able to acquire Canada's largest coffee chain (Tim Hortons) last year. This move now puts the focus on growth as new location openings for QSR were strong last quarter.

QSR stressed that both companies will continue to respond to changing tastes in an effort to continue to grow sales. And while being young and in charge is not always looked at positively, it's obvious that other Fortune 1000 companies could benefit from a youthful (or rejuvenated) look at how things are done.

Other fast food restaurants that reported recently are McDonald's, whose international sales helped propel them to beat analysts estimates.  The company also reported a break in its seven-quarter losing streak in the U.S., where same store sales grew 0.9%. Wendy's reported a revenue beat this quarter

On the other hand, Chipotle reported earnings that were below analysts expectations as well as disappointing sales that were strong but also below expectations as competition continues to heat up in the fast-casual food space.

This article is commentary by Mary Ellen McGonagle President MEM Investment Research an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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