February 20, 2008 / 12:52 PM / 10 years ago

Tim Hortons boosts its quarterly profit, dividend

TORONTO (Reuters) - Fourth-quarter profit at Tim Hortons Inc THI.TO THI.N rose 11.5 percent, the coffee and doughnut chain said on Wednesday, as growth in same store sales helped to offset higher costs.

The company also raised its quarterly dividend by 28.6 percent.

Well known as Tims in Canada, the chain said net earnings increased to C$75.7 million, or 40 Canadian cents a share, from C$67.9 million, or 35 Canadian cents a share in the same period a year earlier.

The mean analyst estimate was for a profit of 40 Canadian cents a share before exceptions, according to Reuters Estimates.

Quarterly operating income jumped nearly 10 percent to C$116.2 million.

Revenue rose 10.5 percent to C$515.4 million as the company introduced such new products as pumpkin spice smoothes, chicken fajita wraps and cream of broccoli soup.

Same-store sales grew 3.4 percent in Canada and 4.2 percent in the United States.

The company said it planned to increase its dividend payable March 17 to 9 Canadian cents a share.

The chain is trying to increase awareness of its brand in the big U.S. market, where it faces tough competition from such long-standing rivals as Dunkin’ Donuts.

Tim Hortons said its cost of sales in the quarter rose 13.6 percent, partly a reflection of higher distribution costs.

Named after the National Hockey League player who co-founded the restaurant chain, the company opened 119 new restaurants in the quarter, more than the 111 it opened in the same period in 2006.

($1=$1.01 Canadian)

Reporting by Jonathan Spicer; Editing by Scott Anderson

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