Tim Hortons profit down 14% on Burger King deal costs
Tim Hortons says its profit dropped 14 per cent to just over $98 million last quarter as the iconic coffee and doughnuts chain was hit by costs related to Burger King's deal to buy the company.
The chain posted profit of $113 million in the comparable period a year ago. On a per-share basis, profit came in at 74 cents per share in its latest quarter, down from 75 cents per share a year ago.
Total revenue was $909.2 million, up from $825.4 million in the same three-month period last year.
Tims said it booked $27.3 million in costs related to the deal with Burger King Worldwide Inc. and 3G Capital as well as $1 million in corporate reorganization costs. Outside of that, Tim Hortons said it earned an adjusted operating profit of $196.1 million for the quarter, up from $169.8 million a year ago.
Adjusted earnings were 95 cents a share. That's up from 76 cents a year ago.
Same-store sales up
"We have strong momentum in our business, supported by early stage execution of our strategic plan. We are pleased with our ongoing growth and evolution which we believe is positioning our brand for long-term success," CEO Marc Caira said.
"With our strategic transaction announced in August, we can build on our momentum and have the opportunity to participate in the creation of a global powerhouse in the quick service restaurant sector."
Same-store sales were up 3.5 per cent in Canada. The number of actual transactions fell slightly, but those who did buy bought more, which explains the same-store sales increase.
The company said sales were helped by its new chicken sandwich specialty doughnuts and dark roast coffee.
U.S. stores did even better, seeing same-store sales increase by 6.8 per cent in the quarter. In the chain's U.S. restaurants, the chain saw more customers but also people buying more.