Tim Hortons parent company reports profit up from year ago
Signs for a Tim Hortons restaurant, foreground, and a Burger King restaurant are displayed along Peach Street in Erie, Penn., Tuesday, Aug. 26, 2014. (AP / Erie Times-News, Christopher Millette)
Aleksandra Sagan, The Canadian Press
Published Monday, October 24, 2016 8:10AM EDT
Last Updated Monday, October 24, 2016 11:55AM EDT
TORONTO -- The CEO of the parent company of Tim Hortons said Monday he plans to keep pushing with an international expansion of the coffee-and-doughnut chain despite softness in the quick-service restaurant industry as well as political unrest and economic uncertainty abroad.
Daniel Schwartz, head of Restaurant Brands International Inc. (TSX:QSR), said he wasn't fazed by geopolitical storms such as Britain's vote to leave the European Union or the recent election in the Philippines of President Rodrigo Duterte, who has come under criticism for his approach to human rights.
"We would expect to start seeing restaurants from (Tim Hortons) in those markets next year," Schwartz said in an interview, adding that it takes time to establish the brand's supply chain and infrastructure in new regions.
This summer, RBI announced plans to push the Philippines, which would be the company's first foray into Southeast Asia, and Britain but had not set out any timelines.
His comments came as RBI, which also owns Burger King, reported a bump in profits for the third quarter ended Sept. 30.
RBI, which keeps its books in U.S. dollars, earned US$86.3 million, up from US$49.6 million in the same quarter last year. The company said the profit amounted to 36 cents per diluted share compared with 24 cents per diluted share a year ago.
On an adjusted basis, RBI said it earned $201.4 million or 43 cents per diluted share. That was up from an adjusted profit of $151.6 million or 32 cents per diluted share a year ago.
Revenue grew to nearly $1.08 billion, up from nearly $1.02 billion in the same period last year.
Sales at Tim Hortons stores that have been open for 13 months or longer grew two per cent -- not accounting for the effect of foreign currency fluctuations -- while Burger King's comparable sales increased 1.7 per cent.
All of Burger King's comparable sales growth came from markets overseas, while such sales dropped 0.5 per cent in Canada and the U.S.
Industry observers have pointed to lower grocery costs and higher restaurant prices as a reason why people may be dining at home more frequently in North America, said RBI chief financial officer Joshua Kobza.
Tim Hortons added 28 new restaurants in the quarter to end the period with 4,492 locations. Burger King added 143 new restaurants to finish with 15,243.