Canadian quick service restaurant chain Tim Hortons Inc. (THI: Quote,THI.TO: Quote) reported Wednesday a higher profit for the first quarter boosted by increased same-store sales in both Canada and the U.S. While the top line also surpassed Wall Street analysts' estimates, earnings missed their view reflecting higher commodity costs.
First-quarter net income attributable to the company grew 10 percent to C$88.78 million from C$80.68 million last year. Earnings per share grew at a better rate of 17.4 percent to C$0.56 reflecting the effect of share buyback programs.
On average, 13 analysts polled by Thomson Reuters expected earnings of C$0.58 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues grew 12.1 percent to C$721.28 million from C$643.49 million a year ago and beat analysts' estimate of C$699.54 million.
System-wide sales growth was 9.4 percent at constant currency. New products and higher pricing also boosted sales. Franchise revenues from rents and royalties grew 7.4 percent partly due to the net addition of 211 new full-serve restaurants in Canada and the U.S., while franchise fees dropped 16 percent.
In the quarter, same-store sales in Canada grew 5.2 percent compared to last year's increase of 2 percent, and sales in the U.S. increased 8.5 percent on top of a 4.9 percent increase last year.
Cost of sales increased 15.7 percent, a higher rate than the sales growth, reflecting higher commodity costs and distribution costs.
Further, Tim Hortons said its President and CEO and Executive Chairman Paul House has committed to continue in his roles of President and CEO until either December 2013 or a new successor CEO is identified.
Tim Hortons also said its Board of Directors has declared a dividend of $0.21 per share payable on June 8 to shareholders of record as of May 24.
In Canada, Tim Hortons' shares closed Tuesday's trading at C$57.08, down C$0.83 or 1.43 percent.
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by RTT Staff Writer
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