Updated from Feb. 16 to include information from Jack in the Box.
Restaurant Brands International (QSR) - Get Report , the parent of both Burger King and Tim Horton's, reported on Tuesday before the open that fourth quarter earnings adjusted for one-time items rose 35% year over year to 35 cents a share, compared to analyst expectations of of 31 cents a share. Excluding the negative impact of the stronger U.S. dollar, same-store sales at Tim Horton's and Burger King increased a solid 6.3% and 3.9%, respectively, during the quarter.
Shares of QSR gained about 5.6% on Tuesday.
But despite another overall solid quarter for Burger King amid interest in innovative new items such as spicy chicken fries and the all-black Halloween Whopper, the U.S. division may not have been immune to people's hearty appetite for McDonald's new all-day breakfast platform.
Fourth quarter same-store sales for Burger King U.S., which operates about 7,150 restaurants, rose 2.8% in the quarter, slowing from a 4.2% increase a year earlier. In the third quarter, Burger King's U.S. same-store sales improved a more impressive 5.2%.
To fend off a revived McDonald's, Burger King will soon start selling grilled hot dogs.
Launched on Oct. 6, McDonald's all-day breakfast has drawn in customers who were no longer visiting the Golden Arches. McDonald's fourth-quarter same-store sales in the U.S. surged 5.7%, trouncing Burger King's results and marking the second consecutive quarterly increase.
"All-day breakfast exceeded our expectations, it's driving incremental business," said McDonald's CEO Steve Easterbrook on a Jan. 25 call with analysts, adding that "all-day breakfast was the primary driver of the quarter."
McDonald's has sought to keep the sales momentum going by debuting a new dollar menu in January and expanding the number of breakfast items that are available all day.
Burger King has responded to a resurgent McDonald's in several ways.
People are loving McDonald's all-day breakfast, forcing BK to respond.
In early January, Burger King launched its 5 for $4 value menu that allows consumers to purchase five specific menu items -- a bacon cheeseburger, small fries, small drink, four-piece chicken nuggets and a chocolate chip cookie -- for four dollars. Burger King's new value menu takes aim at McDonald's McPick 2 menu that also debuted in early January.
And starting Feb. 23, Burger King will sell flame-grilled hot dogs for the first time in its 62-year history. McDonald's currently does not offer hot dogs.
Burger King is not alone in likely experiencing slowing sales growth as a result of McDonald's all-day breakfast program.
Dunkin' Donuts U.S., a division of Dunkin' Brands Inc. (DNKN) - Get Report , surprisingly saw overall sales decline 0.8% in the fourth quarter, while traffic to its restaurants fell 1% year over year. "I was a little surprised -- I think McDonald's did a very good job with it, they advertised it well, it's everywhere you look," Dunkin' Donuts chairman and CEO Nigel Travis toldTheStreet regarding all-day breakfast.
Similar to Burger King, Dunkin' is coming up several moves to compete with McDonald's. First, it plans to offer more premium coffee products, along the lines of its 2014 introduction of dark roast blend and more recently, a line of macchiatos. It will also become more aggressive on value promotions, such as a current program offering two egg and cheese sandwiches for $3.
Travis also did not rule out launching a dollar menu.
To sell more of its breakfast foods, Dunkin' Donuts is offering more discounts.
Jack in the Box (JACK) - Get Report shares were crushed by 20% in after-hours trading Wednesday following worse than expected profits, in part due to McDonald's all-day breakfast stealing sales. Earnings adjusted for one-time items in the fourth quarter came in at 93 cents a share for Jack in the Box, badly missing estimates for $1.03 a share.
"Jack in the Box sales in the last part of the quarter were lower than we anticipated as several competitors began promoting aggressive value offers," said Jack in the Box CEO Lenny Comma in a statement. Comma added, "In addition, we believe a competitor's messaging around its launch of all-day breakfast had some impact on our results, particularly in the 10:30am to noon period."
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Meantime, all-day breakfast at McdDonald's also weighed on southern fast food joint Bojangle's(BOJA) - Get Report . Bojangle's, which operates about 657 locations primarily in the Southeast, has traditionally served its menu of indulgent breakfast biscuits all day.
Breakfast items, or those items sold before 11am, represent about 38% of Bojangle's overall business, while lunch accounts for roughly 28% of Bojangle's business.
"McDonald's has taken some share," conceded Bojangle's CEO Clifton Rutledge in a Jan. 27 interview with TheStreet. Rutledge continued, "there has been a good bit of discounting from McDonald's, Wendy's (WEN) - Get Report and Burger King and we have been forced to respond."
The chain recently ran a $0.99 steak biscuit promotion, a sharp discount from the normal price of $1.89.
McDonald's all-day breakfast may even be hurting diners like Denny's.
Even a sit-down restaurant known for its affordable breakfast may be feeling the heat from McDonald's. On Jan. 11, Denny's (DENN) - Get Report -- synonymous for its cheap "Grand Slam" breakfast -- reported that its preliminary fourth quarter same-store sales in the U.S. rose 2.9%, cooling from a 5.8% increase a year ago. In the third quarter, Denny's domestic same-store sales increased 6.1%.