News

Tim Hortons sales accelerate systemwide

February 23, 2012

Tim Hortons Inc. has announced results for the fourth quarter and full year ended Jan. 1, which included a 9.2 percent growth in systemwide sales. Tim Hortons U.S. had the strongest quarter of same-store sales growth since 2006, increasing 7.2 percent.

The lift was attributed to strong same-store sales increases and continued implementation of the company's new restaurant development strategies.

"Our disciplined focus on responding to our guests' needs, evolving our business and executing our growth strategies resulted in great momentum in the fourth quarter and a strong finish to the year," said Paul House, executive chairman, president and CEO.

Consolidated results

On a comparative basis, the fourth quarter of 2010 included a substantial gain from the sale of the company's 50 percent joint-venture interest in Maidstone Bakeries, which had a significant impact on earnings.

Total revenues increased 21.2 percent, to $779.8 million, compared to $643.5 million last year.

Of note, operating expenses grew modestly (up 3.3 percent) partially due to a bigger investment in U.S. marketing to grow the brand outside of its core Canadian market.

On a full-year basis, systemwide sales increased 7.4 percent on a constant currency basis. Total revenues rose 12.5 percent to $2.85 billion compared to $2.54 billion last year.

Canada

Tim Hortons' Canadian and U.S. segments both delivered robust same-store sales growth during the fourth quarter, with positive growth in transactions and average check in both markets.

Fourth quarter same-store sales grew by 5.5 percent in Canada, significantly outpacing growth earlier in the year. Increases in average check due to product innovation and previous pricing in the system, and slightly positive same-store transactions growth, contributed to the performance. In addition, the company benefited in the quarter from milder weather compared to the year-ago period.

Tim Hortons opened 79 restaurants in the fourth quarter, including 50 standard restaurants, 26 non-standard full-serve locations and three self-serve kiosks.

On a full-year basis, the company's Canadian segment increased same-store sales 4.0 percent. The company opened 175 restaurants in 2011.

United States

Tim Hortons U.S. had the strongest quarter of same-store sales growth since 2006, increasing 7.2 percent. The increase comes on top of a 6.3 percent comps increase delivered in the same period of 2010.

Executives believe the continued momentum in the U.S. has benefited from a strategic focus on brand differentiation and awareness, product innovation, enhanced marketing and promotional initiatives and capital deployment to increase restaurant penetration.

A total of 70 new locations opened in the fourth quarter of 2011, including 44 standard and non-standard full-serve locations and 26 self-serve kiosks.

In 2011 on a full-year basis, Tim Hortons grew same-store sales in the U.S. segment by 6.3 percent, the company's healthiest rate of growth since before the recession. In total, 114 locations opened domestically during the year, comprised of 30 standard full-serve restaurants, 42 full-serve non-standard locations and 42 self-serve kiosks.

Finally, internationally, Tim Hortons opened four restaurants in the fourth quarter as part of a new international strategy. The five units are operated through a master licensee in the Gulf Cooperation Council.

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