Tim Hortons revenue up 10.3% in third quarter
A server pours a cup of coffee at the Tim Hortons' AGM in Toronto on Thursday, May 10, 2012. (Chris Young / THE CANADIAN PRESS)
The Canadian Press
Published Thursday, November 8, 2012 12:21PM EST
Last Updated Thursday, November 8, 2012 2:48PM EST
Tim Hortons boosted its profits in the third quarter, helped by improved sales, but the company also faced a decline in the number of customers at its restaurants.
The coffee, doughnut and fast food chain, which has been grappling with higher competition from its competitors, said third-quarter net income attributable to shareholders was $105.7 million or 68 cents per diluted share.
That was up from $103.6 million or 65 cents per diluted share in the same year-earlier period.
Total revenues increased 10.3 per cent in the three months to Sept. 30 to come in at $802 million, up from $726.9 million.
"We continue to execute on our strategic priorities and deliver top line growth and earnings performance despite continued challenging conditions in the marketplace," said Paul House, executive chairman, president and CEO, in a release.
The company, which doesn't provide specific traffic numbers, said same-store sales transactions were lower in both the U.S. and Canada.
Tim Hortons has launched a wider array of lunch options and specialty drinks in an effort to keep coffee fans coming through their doors after the morning rush, but the response has been mixed at best.
This year, competitors have also launched several promotions to get customers back into their stores more than once a day, including a discount at Starbucks that encourages customers to upgrade their coffee orders to include food items. At McDonalds, the company has continued to offer occasional free coffee giveaways to drive interest in its McCafe brand.
Tim Hortons shares (TSX:THI) fell 3.6 per cent, or $1.78, to $47.73 in Thursday afternoon trading.
"We have made good progress in implementing new growth platforms including Panini sandwiches in Canada and single-serve coffee, as well as improving the guest experience by installing Wi-Fi and digital menu boards," House said.
Tim Hortons is Canada's biggest restaurant chain and the fourth-biggest in North America with more than 4,100 restaurants on the continent.
Since opening its first U.S. store in Buffalo, N.Y., in 1985, it has expanded to more than 750 stores in a dozen states -- including Michigan, Ohio, Kentucky and West Virginia -- and plans to open another 300 locations over the next three years.
The company has recently been changing its approach in some markets, including a licence agreement with Dubai-based Apparel Group to open up to 120 restaurants in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years.
Last month, Tim Hortons joined other Canadian retailers in adding Interac Flash cards to the number of ways customers can make cashless payments at the counter.
Rather than adding to a credit card balance, the Interac cards draw down the funds from the customer's bank account.