OAKVILLE, ONT. — Solid execution of the company’s growth strategy, especially in the United States, contributed to an 11% increase in first-quarter earnings at Tim Hortons Inc. Net income in the quarter ended April 1 was C$88,779,000 ($88,357,000), equal to C$0.57 per share on the common stock, up from C$80,679,000, or C$0.48 per share, in the first quarter of fiscal 2011. The company said most of the increase was attributable to higher operating income and a lower effective tax rate, partially offset by higher net interest expense.
Net revenues rose 12% to C$721,284,000 ($718,137,000) from C$643,487,000. Same-store sales grew 5.2% in Canada and 8.5% in the United States.
“We continue to execute our ‘More than a Great Brand’ growth strategy and focus our efforts in a disciplined manner,” said Paul House, executive chairman, president and chief executive officer. “By responding to our guests’ needs, we have continued to build momentum, as positively reflected in our strong first-quarter results.”
Operating income in the first quarter of fiscal 2012 rose 9% to C$131,623,000 ($131,045,000) from C$120,603,000.
The U.S. segment had operating income of C$3,210,000 ($3,195,000) in the first quarter of fiscal 2012, up 23% from C$2,611,000 in the same period a year ago. Revenues in the U.S. segment increased 9% to C$38,529,000 ($38,351,000) from C$35,459,000.
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.
“Product mix changes benefited from recent menu innovation in our U.S. market, including contributions from Panini sandwiches, which guests have responded favorably toward,” Tim Hortons said. “Transaction growth during the first quarter of 2012 was supported by these new products, and by ongoing marketing and promotional efforts, which were designed to increase brand awareness and guest traffic. We believe favorable weather also contributed to the sales performance in our U.S. segment.”
Tim Hortons opened 7 restaurants in the United States during the first quarter.