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Popeyes’ sales surge, thanks to the chicken sandwich

Same-store sales rose 10.2% last quarter with help from the popular menu item, which returns on Sunday.
popeyes
Photograph courtesy of Popeyes

Popeyes Louisiana Kitchen’s same-store sales surged 10.2% in the third quarter, parent company Restaurant Brands International (RBI) said on Monday, as consumers flocked to the chain’s restaurants to try its chicken sandwich.

The chain, which ran out of six weeks’ worth of supply in less than two weeks, said it plans to bring the sandwich back nationwide on Sunday. Franchisees have already staffed up and trained employees for an expected surge of customers.

The same-store sales result was the best performance for the chain in five years. The result “far exceeded our most ambitious expectations,” Jose Cil, Restaurant Brands’ CEO, said during the company’s third-quarter earnings call on Monday.

Meanwhile, sister company Burger King’s same-store sales rose 5% in the U.S. and 4.8% worldwide. The chain’s U.S. sales were its best in two years and its global sales were its best in five, the company said on Monday.

Yet Tim Hortons’ same-store sales declined 1.4%.

Cil admitted that it was a “challenging quarter” for Tim Hortons.

Still, the quarter proved to be an important one for Toronto-based RBI, which was created in 2014 with the merger of Tim Hortons and Burger King, and then bolstered with the 2017 acquisition of Popeyes.

The company has prided itself on its marketing strength, and the chain flexed those muscles with Burger King and Popeyes in the third quarter, prompting strong sales results at both chains.

Popeyes introduced the chicken sandwich somewhat quietly in late August after two years of development. The product received rave online reviews, however, and then a tweet aimed at rival Chick-fil-A ignited an Internet storm.

Customers flocked to the chain’s restaurants in subsequent days, and some locations saw double their normal traffic and more.

Popeyes’ global same-store sales rose 9.7%, the company said, and systemwide sales rose 15.6% at the chicken chain. “Popeyes had one of its best quarters in nearly two decades,” Cil said.

Not surprisingly, the company is poking at Chick-fil-A again as it plots its return. The company is bringing the sandwich back on Sunday, when the Atlanta-based sandwich chain is typically closed.

An ad highlighting the sandwich’s return features a Popeyes logo on a highway-side being changed to say “open Sunday.” The Chick-fil-A logo next to it reads “closed Sunday.”

Popeyes Chick-fil-A

Photograph courtesy of Popeyes

Executives on Monday said that the interest in the chicken sandwich helped the chain’s other products, too.

“It lifted all other parts of the business,” Cil said. “We saw a lift in our bone-in chicken business. We saw lift in beverages, and quite a lift in desserts. So there was a strong performance across the entire business.”

That’s important for a chain that focuses on getting people in the door to try the product. “About 65% of the U.S. hasn’t tried Popeyes and we know when we get a guest to try a product, it’s preferred over other chicken QSR,” Cil said. “Our goal is to have people try the product. When they try the product, they come back for more.”

Similarly, Burger King surprisingly announced a test of the plant-based Impossible Whopper in April and then quickly expanded the product nationwide in the summer. The product generated considerable sales during tests and strong results during the third quarter ended Sept. 30.

Burger King’s system sales rose 10.7%, including 5.8% unit growth. The chain operates more than 18,000 global locations.

Tim Hortons system sales declined 0.1%. The chain operates nearly 4,900 locations.

Revenues at RBI rose 6% to $1.5 billion. Net income adjusted to factor out one-time events rose 13% to $337 million, or 72 cents per share.

UPDATE: This story has been updated to add commentary from Monday's earnings call.

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