Tim Hortons same-store sales gain in Canada, U.S

Wed Feb 23, 2011 4:54pm EST
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By S. John Tilak

TORONTO (Reuters) - Tim Hortons Inc, Canada's biggest restaurant chain, posted strong quarterly sales growth in stores opened at least a year, especially in the U.S. market, helping lift its shares on Wednesday.

The sales performance, boosted by promotions and menu additions, may have helped investors look past a quarterly profit that was little changed from a year earlier and came up short of analysts' average forecast.

The company issued a full-year forecast that was in line with market expectations.

Sales at stores open for more than a year, or same-store sales, a key measure for retailers, grew 3.9 percent in Canada and were up 6.3 percent in the United States.

Tim Hortons, the fourth-largest publicly traded restaurant chain in North America, dominates the Canadian landscape, but is less familiar in the United States, where it is overshadowed by the likes of McDonald's Corp and Dunkin' Donuts.

"They came up with a very strong same-store sales performance, which is notable," Canaccord Genuity analyst Candice Williams said.

Edward Jones analyst Brian Yarbrough said the U.S. figure was "a real surprise."

"They are doing a better job with their menu innovation and they're doing a better job of being promotional," Yarbrough said. "That's driving the traffic into their stores."   Continued...