Burger King, KFC Miss as Fast-Food Spending Wanes

Burger King parent Restaurant Brands and KFC owner Yum Brands missed market estimates for quarterly results Tuesday, hit by weak demand in the United States and abroad from budget-stretched customers.

Consumers are relying on cheaper, home-cooked meals instead of eating out as fast-food prices have risen over the past year, hurting traffic across the industry.

As a result, restaurant operators have turned to aggressive promotions in an attempt to attract value-seeking customers. Burger King and KFC launched $5 value meals to get lower-income customers back into their outlets.

Still, Burger King sales declined 0.7% in the quarter ended Sept. 30, compared with a 6.6% rise last year. KFC's same-store sales in the U.S. tumbled 5%, marking the third straight quarter of declines this year.

The companies also joined burger giant McDonald's in flagging weakness in international markets such as the Middle East.

Yum Brands, which also owns Pizza Hut and Taco Bell, saw worldwide same-store sales decline 2%, while Popeyes parent Restaurant Brands reported a comparable sales rise of only 1.8% for its international segment, compared with 7.7% last year.

Toronto, Canada-based Restaurant Brands earned 93 cents per share on an adjusted basis, missing analysts' estimates of 95 cents, according to data compiled by LSEG. Excluding items, Yum logged a profit of $1.37 per share, missing expectations of $1.41.

U.S.-listed shares of Restaurant Brands were down about 2% before the bell on Tuesday, while Yum was flat.