The decision to close the stores (almost all of which are located in Rhode Island and Connecticut) has led to a slight drop in third-quarter profits, CBC News reports. According to a recent story in the Toronto Star, the announced closures have caused a 12-cent share hit to profits.
In better news, the chain announced net earnings climbed 20.4 per cent to $73.8 million (or 42 cents a share), but added growth fell short of the 53-cent-a-share performance analysts had predicted.
“We continued to create sales momentum in the third quarter with strong operating performances in both our Canadian and U.S. segments,” said Don Schroeder, president and chief executive officer, as reported by the Star. “However, at the same time, we incurred an asset impairment charge and subsequently made the decisions to close all of our underperforming restaurants in two markets in the New England region. We plan to reinvest a portion of the expected earnings improvement from these closures to increase our brand profile in our U.S. core growth markets where we are building critical mass,” he added.
Tim Hortons operates more than 500 stores south of the border.