UPDATE 1-Canada's Tim Hortons raises dividend, expands buyback
Feb 20 (Reuters) - Canadian coffee and doughnut chain Tim Hortons said it would buy back up to C$440 million ($399 million) in shares and raised its quarterly dividend, as it reported an 11 percent rise in fourth-quarter sales.
Tim Hortons is under pressure from shareholders in the face of a saturated Canadian market and encroaching competition from the likes of McDonald's Corp.
The company says it sells eight of every 10 cups of coffee in Canada and is expanding its food menu in pursuit of growth.
Fourth-quarter same-store rose increased 1.6 percent in Canada and 3.1 percent in the United States, although both growth rates slowed from the same quarter a year ago.
The company, which is set to unveil a new five-year plan next week, said it expected sales at established stores in Canada to increase 1-3 percent and those in the United States to rise 2-4 percent this year.
But that means going head to head with the likes of McDonald's Corp, which is also ramping up promotions to attract customers.
Hortons raised its quarterly dividend to 32 Canadian cents per share from 26 Canadian cents per share. The dividend is payable on March 18, to shareholders of record as of March 3.
Net income per share attributable to Tim Hortons for the quarter ended Dec. 31 rose to 69 Canadian cents per share, from 65 cents per share a year earlier, bolstered by share buybacks that led to a decrease of 8.6 million shares outstanding year-over-year.
The share repurchase program announced on Thursday is part of a previously announced program to buy back up to C$1.2 billion in shares through August, the company said in a statement. Continued...