Helped by a joint venture sale and rising demand in established U.S. stores, Tim Hortons (NYSE:THI) revealed on Wednesday a stronger-than-expected increase in fourth-quarter earnings, lifting profit four-fold and sending shares into the green.
Robust same-store growth during the quarter contributed to the strong performance, with Canadian sales of 3.9%, growing on year ago increases of 4.9%. Comparable stores in the U.S. surged 6.3%, building on 3.9% in the year-earlier period.
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The Oakville, Ontario-based company posted net income of 377.1 million Canadian dollars, or 2.19 Canadian a share, compared with 91 million Canadian dollars, or 51 cents a share, in the same quarter last year. In U.S. dollars, the company earned $379.9 million, or $2.2 a share, widely beating the Street’s view of 55 cents.
Earnings for the seller of coffee and baked goods were helped significantly by the $475 million sale in August of Tim Horton’s 50% stake in Maidstone Bakeries.
“Our fourth quarter results include a number of significant items but our underlying business enjoyed strong same-store sales performance, and we met or exceeded our key goals for the full-year,” said Don Schroeder, the restaurant’s chief executive. “Our business performance provides the foundation for our investments in future growth that we believe will continue to result in long-term shareholder value.”
Despite an improved profit however, revenue for the operator of quick service restaurants was 643.5 million Canadian dollars, or $648.4, down about 3.5% from 667 million Canadian dollars a year ago. Analysts polled by Thomson Reuters expected on average revenue of $656.81 million.
Looking ahead, the company plans on accelerating growth in Canada and in core U.S. markets, with goals of achieving longer-term international growth.