010242 Burger King Profits Down 7%February 24, 2001London - Diageo PLC, the food and drinks conglomerate, said its Burger King business' operating profits were down 7% to $143.5 million in the six months ending in December The company blamed a cold winter and weak marketing promotions in the United States. While the number of total Burger King restaurants is up to 11,345, worldwide comparable restaurant sales were down 6% for the six months, Diageo said. In a bid to boost sales, Burger King announced a new North American promotional campaign featuring movie star Jackie Chan and based on Jackie Chan Adventures, a Kids' WB! Saturday morning cartoon series. Burger King, based in Miami, is the world's second-largest hamburger chain, behind McDonald's Corp. Most of the restaurants are franchised. “Burger King has faced a more difficult trading environment, particularly in the United States,” said Paul Walsh, Diageo chief executive. “We are determined to improve the operating performance of Burger King to ensure that the proposed full separation of Burger King from Diageo realizes value for shareholders.” On Tuesday, Diageo announced the appointment of John Dasburg, former head of Northwest Airlines, as Burger King's chief executive, starting in April. Diageo's predecessor company, Grand Metropolitan PLC, acquired the fast-food operation in 1988 as part of its purchase of Pillsbury Co. Diageo intends to spin off Burger King in the next few years. Strong sales of beer and liquor helped Diageo boost interim earnings by four percent, despite Burger King's performance. Diageo reported second-half sales of $9.92 billion, up from $9.56 billion in 1999. The company's operating profits were up 11% to $1.79 billion, from $1.67 billion for 1999. Diageo has been refocusing on businesses where it sees better growth potential. It agreed in July to sell Pillsbury, owner of the Green Giant vegetables and Haagen-Dazs ice cream brands, to General Mills. The company has also joined forces with Pernod Ricard of France in a bid for Seagram Co.'s alcoholic beverages business.
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