TORONTO — A Dream Donut lineup could help make a return to comparable sales growth a reality for Tim Hortons. Systemwide sales for Tim Hortons, a chain owned by Restaurant Brands International, Inc., dipped 0.1% in the third quarter ended Sept. 30, and comparable sales were down 1.4%.
Dream Donuts made their debut in July when Tim Hortons 130 King, an innovation café, opened in Toronto. The restaurant will be used to test new menu items and technology initiatives. Among the 12 Dream Donuts offered, one was dipped in icing made from Canadian maple syrup and topped with candied bacon. A PB&J variety was a raspberry jam-filled donut with peanut butter icing and crushed peanuts.
“The donuts are not only selling at $1.99 but are also driving nearly half of our product mix in the café,” said José E. Cil, chief executive officer of Restaurant Brands International, in an Oct. 28 earnings call. “We’re planning to roll out a selection of these Dream Donuts across Canada as step one in a larger strategy around product innovation and leadership.”
Internationally, Tim Hortons is opening restaurants in the United Kingdom, Spain, Mexico and the Middle East, Mr. Cil said.
“Baked goods and breakfast are strong in the international markets, and we see a big opportunity for growth over the long haul, and in the U.S. we continue to work with our franchise partners there, the restaurant owners, on fine-tuning and evolving the model to be able to accelerate growth over time,” he said.
Executives of Toronto-based Restaurant Brands International will focus on four areas to reinvigorate the Tim Hortons business: coffee leadership, food quality and innovation, guest experience, and community connection. The Dream Donut lineup is an example of food quality and innovation.
Tim Hortons is rolling out new brewers to improve the consistency of its coffee and to free up its employees to serve guests. Double drive-thrus are an example of improving the guest experience. A Smile Cookie campaign, an example of connecting with communities, raised $10 million for local charities in September.
Restaurant Brands International posted net income of $351 million, or 76c per share on the common stock, in the quarter ended Sept. 30, which was up 40% from $250 million, or 53c per share, in the previous year’s third quarter. Total revenues rose 6% to $1,458 million from $1,375 million in the previous year’s third quarter. Restaurant Brands International’s stock price on the New York Stock Exchange closed at $65.86 per share on Monday, Oct. 28, which was down from a close of $68.45 on Friday, Oct. 25
System-wide sales for Burger King grew 11% in the quarter with comparable sales growth at 4.8%. Popeyes Louisiana Chicken in the third quarter achieved systemwide sales growth of 16% and comparable sales growth of 10%.
For the first nine months of the fiscal year, Restaurant Brands International recorded net income of $854 million, or $1.85 per share on the common stock, which was up 1.3% from $843 million, or $1.81 per share, in the same time of the previous year. Nine-month total revenues rose 3.8% to $4,124 million from $3,972 million.
---------------
The Dream Donuts lineup:
- A crème brulee donut with a vanilla bean custard-style filling;
- A donut filled with dulce de leche and topped with cinnamon sugar coating;
- A donut dipped in icing made from Canadian maple syrup and topped with candied bacon;
- A donut dipped in pink icing and topped with frosted Froot Loops and a white drizzle;
- A donut dipped in pink icing and finished with a confetti buttercream swirl and sprinkles;
- A raspberry jam-filled donut topped with peanut butter icing and crushed peanuts;
- A donut dipped in a hibiscus flower icing and topped with dried blueberries;
- A donut covered in brown butter icing and topped with sea salt flakes;
- A donut with a chocolate base featuring buttercream with hazelnut spread that is topped with roasted hazelnuts and dark chocolate curls;
- A donut with a sour cream cake base that is dipped in an orange zest icing and topped with a candied orange peel and chopped cranberries;
- A Tim Hortons original glaze donut mixed with vanilla to create a vanilla bean dip donut;
- A donut featuring a dark chocolate crust, praline almond spread and toasted coconut topping.
