UPDATE 2-Tim Hortons results fall short as company spends on growth

Wed May 7, 2014 11:00am EDT
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* Costs rise on store openings, credit card launch

* Cold winter, tough competition pressure results

* Reports EPS C$0.66, revenue C$766.4 million

* Same-store sales rise 1.6 pct in Canada, 1.9 pct in U.S. (Adds shareholder and analyst comments, stock price, company background)

By Solarina Ho

TORONTO, May 7 (Reuters) - Tim Hortons Inc, Canada's biggest coffee and doughnut chain, posted first-quarter results that fell short of analysts' expectations, with fewer customers visiting established stores and the company spending more on growth.

Oakville, Ontario-based Tim Hortons, which serves an estimated 7.5 out of every 10 cups of coffee sold in Canada, reported higher expenses related to new store openings and the launch of its credit card, aimed at cultivating customer loyalty.

Shares, which have retreated nearly 4 percent since the start of the year, slipped more than 1 percent on Wednesday morning.

"It was a lousy winter, everybody knows it. The fact that they had better same-store sales growth than I was expecting is a big plus," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services, which owns some 150,000 Tim Hortons shares.   Continued...