TORONTO (Reuters) - Quarterly profit at Tim Hortons Inc THI.TO rose after stripping out a one-time gain recorded a year earlier as sales by the Canadian-based coffee shop chain jumped, the company said on Thursday, sending its shares more than 2 percent higher.
Overall revenue and sales at established stores rose in the quarter ended January 1, driven mostly by customers spending more during each visit. The chain has been raising prices and introducing new products, including espresso beverages and smoothies.
The company also raised its quarterly dividend 24 percent to 21 cents a share.
Tim Hortons, which dominates its home market, claiming eight out of every 10 cups of coffee sold in Canada, said franchise fees rose significantly, thanks to new store openings and resales.
Net income fell to C$103 million ($103 million), or 65 Canadian cents a share, from C$377.1 million, or C$2.19 a share a year ago, when results were helped by Tim Horton’s sale of its interest in supplier Maidstone Bakeries.
Excluding that gain and impairment costs in the previous year, earnings per share rose 26 percent.
Revenue rose 21 percent to C$779.8 million. Sales at stores open 13 months or more rose 5.5 percent in Canada and 7.2 percent in the United States.
Shares of Tim Hortons were 2.4 percent higher at C$51.84 Thursday morning in trading on the Toronto Stock Exchange.
($1 = $0.99 Canadian)
Reporting by Allison Martell In Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Frank McGurty