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Tim Hortons store closings affect Q4 net
February 19, 2009
OAKVILLE, Ontario — Tim Hortons Inc. reported same-store sales increased 4.4 percent in Canada and decreased 0.1 percent in the United States for the fourth quarter ended Dec. 28, 2008, the company has announced. For the year, Canadian same-store sales growth also rose 4.4 percent, of which pricing contributed about 3.4 percent, and U.S. same-store sales increased 0.8 percent, with pricing accounting for approximately 2.2 percent of same-store sales.
Total revenues were up 9.4 percent to $563.7 million (Canadian dollars) in the fourth quarter, compared to $515.4 million in the same period last year. For the year, revenues were up 7.8 percent to approximately $2 billion, compared to $1.9 billion last year.
Fourth quarter net income was $69.1 million, down 8.6 percent from $75.7 million in the same period last year. The company attributed the decrease in net income to $15.4 million in after-tax costs associated with previously announced restaurant closures and the related asset impairment charge.
For the year, net income was up 5.6 percent to $284.7 million, compared to $269.6 million last year. Net income includes a $17.1 million after-tax impact from the asset impairment and related closure costs described previously and the management restructuring charge announced in the second quarter.
"Sales growth in our core Canadian business was quite strong in the fourth quarter considering the challenging economic circumstances," said Don Schroeder, Tim Hortons president and CEO. "At the same time, we took decisive steps to improve profitability in our developing U.S. business by closing a number of underperforming restaurants in southern New England, as announced late last year. For the full year, we had consolidated operating income growth of close to 10 percent excluding non-comparable items, and we are pleased with this overall performance. We continue to focus on executing our growth agenda."
A replay of the Tim Hortons conference call discussing its fourth quarter and year-end results will be available for one year and can be accessed by calling (416) 626-4100 or (800) 558-5253. The reservation number for the replay of the call is 21412008.
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