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Even the cheap stuff gets cut when jobs are scarce. Burger King (NYSE: BKC), the second largest burger chain, saw fiscal first quarter profit fall 6% year-over-year, as diners opted to make their own meals at home.
Another part of the problem, though, is that competitors have cut their prices aggressively in order to bring customers through the door, a move that can have an upside for market share but doesn't always restore revenue lost to a recession.
Burger King's fiscal Q1 revenues fell 5% to $639.9 million (from $673.5 million in 2008), and its profit dropped to $46.6 million (34 cents a share) from $49.8 million (36 cents a share) last year. The company also cites foreign currency exchange pressure as responsible for trimming 2 cents a share from earnings.
Burger King didn't meet the Street's forecasts, which were 37 cents a share on $652.8 million in revenue.
Across the country, fast-food restaurant traffic fell 3% in the three-month period ending in August, and McDonald's (NYSE: MCD) has said that sales in restaurants open at least a year are likely to be flat or down slightly in October. If this plays out, it will be the first time in more than 6 years that McDonald's hasn't shown a year-over-year increase in the monthly metric.
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