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Burger King's earnings up thanks to that creepy mascot?

McDonald's (NYSE: MCD) may be the big brand name in the fast-food industry, but don't discount Burger King (NYSE: BKC). The King reported its fiscal Q3 numbers on Thursday, and they were pretty regal indeed.

Revenues increased 10%, and earnings per share did even better, rising 20% to 30 cents (that beat earnings by three pennies, says Briefing.com). Now, when talking about retail stores and fast-food joints, the issue of same-store sales always comes up, since it's such an important element to consider (be sure to keep in mind that comps must always be put in an overall context, especially if you are only measuring a one-month timeframe). Global comps increased 5.8% for the quarter, a good showing for Burger King which wants to become a force to be reckoned with around the world. The domestic side of things isn't doing too badly either as comps in the United States and Canada moved up 5.4%. Restaurant margins, however, decreased due to the challenging commodity-cost environment we all live in nowadays. Otherwise, I see these earnings as very positive for Burger King, and I am bullish on the stock.

One thing I love about this company is its catchy advertising campaigns. Seriously, that King character is creepy, but it injects an edge to the commercials that the teenage/college-age crowd really respond to (although, ironically enough, I'm sure a lot of folks find Ronald McDonald, a clown, rather creepy as well). Burger King knows how to market itself and how to catch the attention of the youth who love to stock up on fast food at the drive-thru. Yep, the Big Mac is getting a lot of competition from the Whopper, and these earnings results show that Burger King is indeed differentiating itself through an innovative image. McDonald's, Wendy's (NYSE: WEN), and Yum! Brands (NYSE: YUM) need to watch out for the King (I'm going to have nightmares tonight for sure).

Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.

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Last updated: May 18, 2008: 10:55 AM

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