First North America, then the world — at least that's how Tim Hortons Inc. (TSX:THI) hopes to conquer the coffee market.
Chief executive Marc Caira told investors Thursday that he plans to grow the restaurant's operations outside the company's home base, and the United States, starting first with the Middle East and then moving onto other countries.
"Our focus in the short-term is on continue to grow and learn in this part of the world (the Middle East) before embarking on further expansions internationally," he said on the company's financial results conference call.
"This is not about plastering the Tim Hortons brand everywhere, this is about taking the brand where it makes sense and where we can further build," he added.
He did not say what other countries Tim Hortons might consider as the next step.
Under Caira's leadership, the company has been undergoing a widespread review of its priorities and ways that it can boost its reputation with both domestic and international coffee consumers.
Third quarter profits grow
Tim Hortons already has operations in the Middle East, and Caira said he's "very happy in the way that's progressing."
In its financial results, Tim Hortons said third quarter profits grew, even though the results still fell short of analyst expectations.
Net income rose to $113.9 million, or 75 cents per share, from $105.7 million a year earlier, or 68 cents a share.
On an adjusted basis, earnings were 75 cents per share, two cents shorter than analysts expected, according to a poll by Thomson Reuters.
Tim's revenue did come in nearly a million dollars ahead of estimates, rising nearly three per cent from a year earlier to $825.3 million, up from $802.0 million a year earlier.
In Canada, same-store sales grew 1.7 per cent as customers spent more per visit, mainly due to an increase in prices. Same-store sales are an important metric for the retail industry that factors in locations open for at least a year.
In the United States, same-store sales increased three per cent on more transactions.
The company, which has been undergoing some changes, spent notably less on corporate reorganization. About $1 million went towards the initiative, compared to $8.6 million a year ago when it booked costs from a change in its chief executive officer and other fees.
Tim Hortons shares were ahead seven cents at $62.67 on the Toronto Stock Exchange.