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On Jul 17, 2013, Zacks Investment Research upgraded Burger King Worldwide (BKW - Analyst Report) to a Zacks Rank #1 (Strong Buy) on the basis of impressive changes made to its top management and its upbeat outlook for the ensuing quarters driven by innovative initiatives.

Why the Upgrade?

On Jun 7, 2013, Burger King declared the appointment of Daniel Schwartz as its new Chief Executive Officer (CEO). Schwartz took over the baton from the former CEO Bernardo Hees, now employed as the CEO of H.J. Heinz Company. In mid-February, 3G Capital and Warren Buffett’s company, Berkshire Hathaway, Inc. (BRK.B - Analyst Report) acquired Heinz.

Schwartz, previously the Chief Financial Officer in Burger Kings, has played a pivotal role in expanding the company’s international operations. We believe that these change will speed up the company's growth worldwide, going ahead.

Burger King beat the Zacks Consensus Estimate in the past three out of four quarters and posted an average surprise of 32.48%. In the first quarter, earnings were 17 cents per share, in line with the Zacks Consensus Estimate but up 49% year over year.

Continuous decline in costs appears to be the main reason for annual rise in earnings. The restaurateur is expected to report its second-quarter earnings on Aug 1 2013. The Zacks Consensus Estimate for the quarter at the moment is 20 cents per share reflecting a 17.6% rise in year over year earnings.

Burger King remains steadfast in executing its Four Pillars strategy of menu improvements, marketing initiatives, operational efficiency and re-imaging restaurants in the U.S. and Canada to improve top line in the coming quarters.

Moreover, the company’s innovative ‘BK Delivers’ program will help in spreading its value offerings beyond its outlets and deliver to the customers’ homes, schools and offices.  This initiative will further enhance the company’s presence and boost its same-store sales performance, going ahead.

The company is focused on completely transforming its business into a 100% franchised model by the end of 2013. We believe re-franchising a large chunk of its system will also boost its margin expansion in the ensuing quarters. Presently, about 97% of its restaurants are owned and operated by independent franchisees after it completed refranchising in the U.S. in the first quarter of 2013.

Other Stocks to Consider

Some other players which attained a Zacks Rank #1 (Strong Buy) this week include Cracker Barrel Old Country Store, Inc. (CBRL - Snapshot Report) and Krispy Kreme Doughnut Inc. (KKD - Snapshot Report).

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