Tim Hortons 10 percent profit jump less than expected
By Allison Martell
TORONTO (Reuters) - Tim Hortons Inc THI.TO THI.N reported a 10 percent rise in quarterly profit on Wednesday on strong sales growth at its coffee shops in Canada and the United States, but the result fell short of analyst expectations and its shares dropped.
Canada's dominant coffee and doughnut chain earned 56 Canadian cents a share in the quarter ended April 1. Analysts, on average, had expected earnings of 58 Canadian cents, according to Thomson Reuters I/B/E/S.
The company also said Paul House would stay on as chief executive until December 2013 or until the appointment of a new CEO, whichever comes first.
Sales for the quarter ended April 1 at outlets open at least 13 months rose 5.2 percent in Canada and 8.5 percent in the United States. In Canada, all of that growth came from customers spending more during each visit.
The Oakville, Ontario-based company said a mild winter in Canada and "robust product introductions" helped boost sales at established stores. It has launched a number of new products over the past year, including espresso beverages, a beef lasagna casserole and a 24-ounce cup size.
In the United States, the number of transactions also rose in the quarter.
CAN TIM'S KEEP GROWING IN CANADA?
Canaccord Genuity analyst Derek Dley noted that transaction growth has been fairly flat in Canada for several quarters as competition in the breakfast market heats up. Continued...