News

Dark roast coffee, lunch sandwich boost Tim Hortons' average check

November 6, 2014

Tim Hortons’ Q3 same-store sales jumped 6.8 percent in the US and 3.5 percent in Canada. These gains were driven primarily by an increase in average check, and sales were boosted by the dark roast coffee and spicy crispy chicken sandwich rollout.

Costs of $27.3 million associated with the proposed transaction with Burger King had a negative impact of $0.21 on EPS during the quarter.

"We have strong momentum in our business, supported by early stage execution of our strategic plan. We are pleased with our ongoing growth and evolution which we believe is positioning our brand for long-term success," CEO Marc Caira said in a news release. "With our strategic transaction announced in August, we can build on our momentum and have the opportunity to participate in the creation of a global powerhouse in the quick-service restaurant sector. We expect Tim Hortons to significantly expand its reach as a strong, independent brand within the new company."

Consolidated results

Systemwide sales increased 7.5 percent on a constant currency basis, as a result of same-store sales growth of 3.5 percent in Canada and 6.8 percent in the U.S., as well as new restaurant development.

Segmented performance

Canada’s same-store sales increase was driven by average check increases from pricing and product mix, and was slightly offset by a decline in transactions. The average check benefited from breakfast and lunch dayparts. The company said the new dark roast coffee blend has proved popular among guests.

Forty-one restaurants opened in Canada in Q3.

In the US, the average check increased from a favorable product mix and pricing, as well as same-store transactions. The company said the US is experiencing momentum in the breakfast daypart and cold beverage category.

Increased sales of coffee and hot beverages, including the new dark roast blend, also contributed to same-store sales growth.

Ten units opened in the U.S. in Q3. Seven development agreements have been signed in the US, representing approximately 145 new restaurants throughout the next 10 years.