New platforms propel profit at Tim Hortons
OAKVILLE, ONT. — The implementation of new growth platforms, including Panini sandwiches in Canada and single-serve coffee, contributed to a 2% increase in earnings at Tim Hortons Inc. in the third quarter. Net income in the quarter ended Sept. 30 was C$105,698,000 ($106,676,000), equal to C$0.68 per share on the common stock, up from C$103,631,000, or C$0.65 per share, in the third quarter of fiscal 2011.
Net revenues rose 10% to C$802,040,000 ($805,091,000) from C$726,930,000. Same-store sales grew 1.9% in Canada and 2.3% in the United States.
“We continue to execute on our strategic priorities and deliver top-line growth and earnings performance despite continued challenging conditions in the marketplace,” said Paul House, executive chairman, president and chief executive officer. “We have made good progress in implementing new growth platforms, including Panini sandwiches in Canada and single-serve coffee, as well as improving the guest experience by installing Wi-Fi and digital menu boards.”
Operating income in the third quarter of fiscal 2012 rose 0.6% to C$153,659,000 from C$152,806,000.
The U.S. segment had operating income of C$2,947,000 in the third quarter of fiscal 2012, up 3% from C$2,873,000 in the same period a year ago. Revenues in the U.S. segment increased 7% to C$39,299,000 from C$36,835,000.
The company said strong same-store sales growth in the United States was driven in part by a combination of pricing and favorable product mix, as well as continued transaction growth.
“Gains in average cheque were attributable to pricing, and to a lesser extent, favorable product mix, notably the introduction of our new Breakfast Panini sandwiches and our iced espresso lattes,” Tim Hortons said. “Higher average cheque more than offset the decline in same-store transactions in the quarter. System-wide transactions continued to increase due to the new restaurants we have added to the system.”
Tim Hortons opened 73 restaurants in North American and international markets, including 22 in the United States during the third quarter.
For the nine months ended Sept. 30, net income was C$302,544,000, or C$1.94 per share, up 8% from C$279,859,000, or C$1.71 per share, in the same period a year ago. Revenues for the nine months increased 11% to C$2,308,905,000 from C$2,073,177,000.