* Q3 adjusted EPS C$0.47 vs C$0.46 consensus view
* Canadian same-store sales up 3.1 pct
* Sees 2009 same-store sales at low end of forecast range
* Shares down 2.9 percent at C$30.88 (Recasts and adds analyst and company comments)
By Scott Anderson
TORONTO, Oct 30 (Reuters) - Tim Hortons THI.TO, the iconic Canadian coffee shop chain, warned on Friday that sales in Canada could slow due to the sluggish economy, even as it reported a quarterly profit that narrowly topped estimates.
The company, which has 2,971 stores in Canada and about 550 more in the United States, said it expects 2009 Canadian same-store sales to come in at the low end or slightly below its target of 3 percent to 5 percent growth.
"Everyone had projected by the third quarter that we would probably see some real recovery," Don Schroeder, the company's president and chief executive, said on a conference call with analysts. "There is some in some parts of the country, but at best it is sluggish to date."
The company, however, maintained its 2009 forecast of 6 percent to 8 percent growth in operating income, excluding unusual charges.
Last month Tim Hortons completed its reorganization as a Canadian public entity to take advantage of a better tax rate. When reorganization costs are excluded, the company earned 47 Canadian cents a share in the third quarter.
Revenue rose 10.7 percent to C$563.6 million ($521.9 million).
Analysts on average were expecting earnings of 46 Canadian cents a share, excluding items, and revenue of C$552.5 million, according to Thomson Reuters I/B/E/S.
Customer traffic slowed earlier this year as the recession deepened and consumers cut back on discretionary spending. During the second quarter, Canadian same-store sales rose just 1.7 percent, down from 5.7 percent growth a year earlier.
"This is something to keep an eye on because they have done exceptionally well in terms of maintaining same store sales growth compared to their competitors like Starbucks...," said Gavin Graham, director of investments at BMO Asset Management.
"The strength that they have demonstrated so far is from people trading down from Starbucks and if that is starting to get squeezed, then you might well be worried."
In the third quarter, same-store sales, or sales at locations open for more than a year, rose 3.1 percent in Canadian stores and increased 4.3 percent in the United States.
"I was a little bit surprised by same-store sales accelerating in Canada, and even the one in the U.S. is pretty impressive considering the environment that we are in," said analyst Brian Yarbrough of Edward Jones in St. Louis. "So I think they are benefiting from people trading down."
Tim Hortons shares, which have slipped almost 10 percent this year, were off 2.9 percent at C$30.88 on the Toronto Stock Exchange at midday on Friday.
The company said net earnings fell to C$61.2 million, or 34 Canadian cents a share, in the third quarter from C$78.8 million, or 43 Canadian cents a share, a year earlier.
Separately, Tim Hortons said it planned to buy back up to C$150 million of its shares by March. ($1=$1.08 Canadian) (Reporting by Scott Anderson; editing by Peter Galloway)