Americans have undoubtedly reined in their spending. If it can't be eaten or lived in, Americans don't want to buy it right now. That's good news if you happen to sell food, and particularly good news if you happen to sell fast (i.e. cheap) food like Burger King (NYSE:BKC) or McDonald's (NYSE:MCD).

In this piece, I'd like to delve a little deeper into Burger King. The Florida-based company's first quarter results, which were released on Oct. 31 before the opening bell, have inspired me to give the shares a fresh look.

Slowdown? What Slowdown?
In the period ended Sept. 30, Burger King earned $50 million, or 36 cents per share (38 cents excluding charges). That is small bump up from the $49 million, or 35 cents a share, it earned in the comparable period last year, and for the record it was a penny shy of analyst estimates.

What I was really keeping an eye on was Burger King's same-store-sales numbers, also called comps. Comps are one of the best ways to get an apples-to-apples view of a company's health, and Burger King's comps were up a healthy 3.6%.

Quite simply, positive comps are an achievement in this environment. Several big names including Brinker International (NYSE:EAT) to Darden (NSYE:DDI) have seen declines lately. Brinker saw a drop of 4% and Darden saw comps decline 1%. This isn't the first quarter of improved comps from Burger King either; in fact, it's the nineteenth consecutive quarter of worldwide comps growth.

Even North American comps were cooking - where, despite the current market malaise, U.S. and Canadian comps climbed 3%.

It's important to note that Burger King was going up against a tough comparison. In the same period last year it generated a positive 5.9% comp, which is pretty amazing. This is proof that Burger King's newer products, like its BK Fresh Apple Fries, are working. Finally the number puts Burger King in the same league as McDonald's, which generated a 7.1% comps increase in its most recent quarter. (To learn more about comps, read Sinking Your Teeth Into Restaurant Stocks.)

Forecast and Valuation
Commodity costs have been a concern for Burger King, but management now seems to have a handle on the situation. Management was confident enough in their ability to deal with volatile commodity prices that they reaffirmed the full year earnings forecast of $1.54-1.59 per share. That's consistent with both the guidance it offered in August, and it's also consistent with analyst estimates of $1.55 per share.

At present Burger King trades at about 12.83 times the current-year earnings estimate of $1.55 per share. That's attractive given that Burger King is expected to grow its EPS at a 16.8% pace in the following year (fiscal 2009-2010). For comparison purposes, McDonald's trades at about 16 times the current year estimate of $3.61 and is expected to grow its EPS at a roughly 6.4% rate for fiscal 2008-2009.

Bottom Line
The good news at Burger King also bodes well for McDonald's and Wendy's (NYSE:WEN). McDonald's is in its fourth quarter right now, and Wendy's is poised to release its third-quarter numbers on November 6. Investors would be well severed to watch these results.

As far as Burger King is concerned, this quarter was indeed a good one. I was impressed by both its comps and by its forward-looking forecast. I believe Burger King and its rivals will fair well despite the sluggish economy.

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