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Burger King Holdings (NYSE: BKC) is on the upswing today after the fast-food chain topped analysts' earnings expectations. In its fiscal fourth quarter, the burger baron banked a profit of $58.9 million, or 43 cents per share, representing a 16% increase from the year-ago period. Revenue dipped 2% to $629.9 million, while same-store sales fell by 2.4%. By contrast, analysts were looking for a profit of just 33 cents per share on $632 million in revenue.
Looking ahead, the restaurant chain warned that it expects sales to be soft through Christmas. As a result, Burger King declined to issue specific earnings guidance for the current fiscal year. Additionally, the company plans to slow the pace of its new store openings; rather than the 360 new outlets opened in fiscal 2009, Burger King is targeting 250 to 300 openings in fiscal 2010.
Despite Burger King's less-than-rosy outlook, the shares have shot higher today as traders cheer the earnings surprise. But with the fast-food firm warning of weak sales through the first half of the fiscal year, it's unclear how long the post-earnings euphoria will last.
In fact, today's pop higher has propelled the shares closer to their declining 10-month moving average, which hasn't been bested on a monthly closing basis since May 2008. Slightly north, near the $20 level, additional resistance looms from Burger King's 50-week trendline. This moving average rejected the equity's rally attempt in April, and could continue in its role as a technical ceiling.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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