Tim Hortons names new CEO; profit falls
TORONTO (Reuters) - Tim Hortons Inc THI.TO, under pressure from a U.S. hedge fund seeking better returns, named a new chief executive on Wednesday as it reported a 3 percent fall in first-quarter profit.
The Canadian coffee and doughnut chain said Marc Caira, a long-time Nestle SA NESN.VX executive, would take over from interim CEO Paul House on July 2. Caira, 59, was most recently the global head of Nestle Professional.
Caira will take the reins at Tim Hortons as the company faces pressure from Boston-based Highfields Capital to scale back its U.S. expansion plans and take on new debt to buy back shares.
The first-quarter results could stoke further pressure from the activist investor. Tim Hortons said same-store sales in the United States fell 0.5 percent, while sales in Canada slipped 0.3 percent.
Highfields has said Tim Hortons' returns in the United States do not justify further investment there. It recommended that the chain enter into less capital intensive franchise deals in the United States or scrap its U.S. expansion plans altogether, according to documents seen by Reuters.
Tim Hortons said earnings in the first quarter fell despite a 1.4 percent rise in revenue to C$731.5 million ($727.9 million).
Net income attributable to Tim Hortons was C$86.2 million, or 56 Canadian cents per share, down from C$88.8 million, or 56 Canadian cents per share, a year earlier.
Operating income dropped to C$127.9 million from C$131.6 million. Continued...