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Tim Hortons U.S. comps push Q2 results
August 5, 2009
Tim Hortons Inc. has reported systemwide sales were up 5 percent on a constant currency basis for the second quarter ended June 28. Same-store sales were up 1.7 percent in Canada, compared to a strong growth rate of 5.7 percent in the same period last year.U.S. comps were up 3.3 percent, the second straight quarter for strong results. In the first quarter, U.S. comps were up 3.2 percent.
Revenues for the quarter were up 8.9 percent to $556.1 million, compared to $510.7 million in same period last year. Foreign exchange translation increased revenues by approximately 1.4 percent. Foreign currency translation raised both U.S. segment revenues and costs by approximately 14 percent during the quarter compared to the second quarter of 2008.
Net income attributable to Tim Hortons was up 3.7 percent to $77.8 million for the quarter, compared to $75 million in the same period last year.
"We overcame anticipated challenges in the second quarter and delivered positive sales and earnings growth, demonstrating the strength and resilience of our business," said Don Schroeder, Tim Hortons president and CEO. "We were particularly pleased with growth in transactions in our Canadian business and the operational and earnings improvement in our U.S. business."
Continued progress was made during the quarter in transitioning company-operated restaurants to owner-operated restaurants.
Positive same-store sales were driven by continued menu and marketing initiatives that included the launch of Chicken Wrap Snackers immediately prior to the quarter, and the national introduction of Iced Coffee in the Canadian market, supported by a free sample day. In addition to product introductions, Iced Cappuccino, breakfast sandwiches and strawberry bloom donuts were promoted. In the United States, the sausage and a biscuit product offering, first successfully offered in February, also was promoted during the quarter.
The company continues its test of co-branded locations with Cold Stone Creamery in Canada and the United States. The company has six co-branded locations open in Ontario, and is expanding with an additional six sites in other Canadian markets this year. In the United States, 39 co-branded Tim Hortons - Cold Stone Creamery locations have opened, including one co-branded Cold Stone Creamery site. Tim Hortons also previously announced a significant push into New York City, with 12 franchised locations at key sites such as Penn Station, Times Square and Broadway. A total of 10 restaurants opened in the U.S. during the quarter.
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