Tim Hortons income eases 3% on operating challenges
by Eric Schroeder
OAKVILLE, Ont. — Net income at Tim Hortons Inc. in the quarter ended March 31 was C$86,171,000 ($85,957,000), equal to C$0.56 per share on the common stock, down 3 percent from C$88,779,000, or C$0.57 per share, in the first quarter of fiscal 2012. The company said the decline reflected lower operating income, which was affected significantly by corporate reorganization expenses.
Net revenues rose 1 percent to C$731,537,000 ($729,948,000) from C$721,284,000. Same-store sales fell 0.3 percent in Canada and 0.5 percent in the United States.
“While it was a soft quarter as expected, we are taking important steps to continue to expand and enhance our system, improve the guest experience and build value for our shareholders,” said Paul House, executive chairman, president and CEO.
Operating income in the first quarter of fiscal 2013 fell 2 percent to C$127,917,000 from C$131,623,000.
The US segment had operating income of C$910,000 in the first quarter of fiscal 2013, down sharply from C$1,654,000 in the same period a year ago. Revenues in the US segment increased 16 percent to C$44,448,000 from C$38,429,000.
“A higher-average check, due primarily to pricing, was offset by a decline in same-store transactions,” the company said. “System-wide transactions continued to increase, reflecting the ongoing development of new restaurants, which also drove system-wide sales growth of 7.8 percent. In the US, the weather had a negative effect on sales of both our cold specialty drinks and our Cold Stone Creamery products.”
Tim Hortons also announced that Marc Caira has been named president and CEO, effective July 2. He will succeed House, who will become non-executive chairman of the board of directors. Caira most recently was global CEO of Nestle Professional and a member of the executive board at Nestle SA.
“We are delighted to announce Marc’s appointment as president and CEO,” said Frank Iacobucci, lead director at Tim Hortons. “His knowledge and experience in the global food services and beverage industry, and his strong leadership, make him the ideal person to lead the company into the future. We are also indebted to Paul House for his significant ongoing commitment and contributions to the organization, and are pleased that he will take on the exclusive role of chairman.”