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Tim Hortons reports strong growth in U.S.

August 11, 2011

Canada-based Tim Hortons continues to grow in the United States, an effort reflected in the company's second quarter, ended July 3.

Total revenues were up 9.8 percent, from $639.9 million to $702.8 million, from the same period last year. Operating income decreased by 4.4 percent during that same timeframe.

Same-store sales in Canada in Q2 2011 were 3.8 percent; while U.S. sales rose 6.6 percent during that time.

Total revenues increased 9.8 percent, driven by systemwide sales growth and higher distribution sales due to commodity pricing.

Same-store sales in the Canadian segment grew as a result of average check growth, which benefited from favorable pricing and product mix. Successful menu initiatives such as Real Fruit Smoothies, which helped grow the company's cold beverage category, contributed to product mix changes in the quarter.

During the second quarter, Tim Hortons opened 24 restaurants in Canada, the majority of which were standard restaurants.

In the U.S., same-store sales performance momentum came from higher average checks, benefiting from pricing in the system, and to a lesser extent, from favorable product mix. Targeted advertising and promotional efforts to increase brand awareness contributed to this strong performance.

During the second quarter, Tim Hortons opened 10 new locations in the U.S., including a mix of standard, non-standard and self-serve kiosks.

"Our business performed well in the second quarter with strong top-line results in both Canada and the U.S. We overcame softness early in the quarter in Canada and delivered strong same-store sales growth in both Canada and the U.S. We continue to focus on executing our strategic plan, taking advantage of market opportunities and our strengths to grow our business and respond to our guests' needs," said Paul House, executive chairman, and president and CEO.

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