OAKVILLE, Ont. – Canadian coffee king, Tim Hortons Inc., served a helping of good news to shareholders, revealing news of revenue growth of 10.7 per cent in the third quarter compared to last year, a number that is slightly overshadowed by a profit decline due to the $23.1-million price tag associated with becoming a Canadian legal entity.
“The underlying performance of our business was healthy in the third quarter and our results continue to demonstrate the strength and resilience of our brand,” Don Schroeder, Tim Hortons president and CEO, said in a statement. “Operating conditions continued to be challenging in the third quarter, but we remained focused on executing our growth initiatives and responding to the needs of our customers.”
The good news is revenue increased to $563.6 million in the third quarter ended Sept. 27, led by the Canadian stores, which brought in $50 million more in comparison to this time last year. The American stores saw an impressive turnaround, jumping from $7.8 million in total sales to $38.9 million, growing by 25 per cent. Further to that, same-store sales grew by 3.1 per cent in Canada and 4.3 per cent in the U.S. Net income fell to $61.2 million this quarter, down 22.3 per cent from 2008, due to the aforementioned added costs attributed to the conversion from a U.S. subsidiary to a Canadian legal entity.
In related news: The Globe and Mail reports that the company has announced plans to spend up to $150 million to buy back shares between now and March in a move that was previously put on hold until the Canadian conversion became official. What’s more, CP reports that Tim Hortons has also revealed plans to increase coffee prices in Quebec, Manitoba and the Maritimes to counteract the rising prices of running its franchised stores.