Shares of Burger King have risen an impressive 16.3% in 2014 compared to a 1.92% decline for McDonald's. The home of the Whopper has fallen into the good graces of Wall Street as a result of its strengthening quarterly U.S. same-restaurant sales and consistent gains in international markets.
McDonald's financial troubles revolve around upset franchisees being forced to invest in new kitchen equipment to meet the needs of an expanding menu, and Yum Brands' (YUM) Taco Bell division attacking it in its breakfast daypart via new offerings. On the other hand, Burger King's focus on well-marketed, unique limited-time offerings (such as the premium Chicken Crunch sandwich in Australia) globally appears to be the ingredient to its success.
The differences between the two burger chains financially are striking, and becoming increasingly apparent, so much so that McDonald's shares could fall further in the months ahead.
By the Numbers
According to Bloomberg, Burger King's same-restaurant sales have increased for three straight quarters while McDonald's same-restaurant sales have declined for three consecutive quarters. In the second quarter, Burger King reported a 0.4% same-restaurant sales increase compared to a 1.5% decline for McDonald's.
In Asia, Burger King has beaten McDonald's in terms of same-restaurant sales growth for seven straight quarters. In the second quarter, at an increase of 3.7%, Burger King's Asia same-restaurant sales growth trumped McDonald's by about three times.