Tim Hortons Q3 Profit Up 8%

(RTTNews) - Canadian quick-service restaurant chain Tim Hortons Inc. (THI.TO, THI) Thursday said profit for the third quarter increased 8 percent from last year, as same store sales improved in Canada and the U.S.

Net income attributable to the company advanced to C$113.86 million ($109.4 million) from C$105.7 million in the previous year. Earnings per share grew to C$0.75 from C$0.68. The company recognized an asset impairment charge of C$2.9 million for the quarter, relating to some under-performing markets in the U.S.

In the prior year, the firm incurred C$8.6 million of corporate reorganization expenses relating to termination costs, CEO transition costs and professional fees.

On average, 14 analysts polled by Thomson Reuters expected earnings per share of C$0.77 for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues increased to C$825.35 million from C$802.04 million in the prior year. Analysts had a consensus revenue estimate of C$825.93 million.

Systemwide sales increased 5.3 percent on a constant currency basis, as a result of new restaurant development in Canada and the U.S., and same-store sales growth of 1.7 percent in Canada and 3 percent in the U.S.

The revenue growth rate was below that of systemwide sales due to a 0.3 percent slide in distribution sales, the largest component of revenues, driven primarily by lower commodity costs and corresponding decreases in pricing charged to restaurant owners.

Marc Caira, president and CEO, said, "I am pleased to see continued progress in our business, including improving sales and profitability, despite a challenging operating environment. Our same-store sales growth was particularly strong in our U.S. business."

In the previous year, same-store sales growth was 1.9 percent in Canada and 2.3 percent in the U.S.

In Canada, same-store sales growth of 1.7 percent was driven by gains in average cheque, resulting primarily from pricing. U.S. same-store sales increased as a result of increase in transactions.

On November 6, the company's Board of Directors declared a quarterly dividend of C$0.26 per common share, payable on December 10, to shareholders of record as of November 25.

THI.TO closed down 0.2 percent at C$62.60. THI settled at $60.10.