Tim Hortons 2nd Quarter Results Released

Tim Hortons 2nd Quarter Results Released
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Nolan A Machan

Nolan A Machan

Nolan Machan is the Publisher of OakvilleNews.Org and has over 41 years of local Oakville knowledge. He is committed to providing Oakville residents with the most up-to-date information about our great town.

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As one of Oakville’s largest employers, and Canada’s top restaurant brand, Restaurant Brands International (RBI) released Tim Hortons 2nd Quarter results.

Unfortunately not all the news was good for Restaurant Brands International as Tim Hortons 2nd Quarter results indicated a -0.8% decrease in world wide sales, primarily driven by a decrease of -0.6% in Canada. The decrease was attributed to a softening of sales in the lunch and baked goods segments.

Overall revenue jumped to $281 million which was up by 4.7%, which according to Restaurant Brands International was do to increase in the number of stores.

When asked by CIBC about the increase of Ontario’s minimum wage to $14.00 per hour effect on Tim Hortons, the company responded that it was not going to pose an issue. They were going to combat that wage increase by focusing on increasing store sales through new products such as their Espresso Program. They are also pinning high hopes on the new launch of their Tim Hortons App.

However, consumer’s were surprised today as they purchased their coffee and donut that rose to $2.60 from $2.55 and their ham and cheese sandwich rose from $7.45 to $8.13 a 9% increase.

Bank of America asked about the dispute between Tim Hortons Franchise owners and Restaurant Brands International, and what if any impact that was having on sales. The response by RBI was to side step the question and refocus the discussion to their main talking points.

On the positive side, RBI announced that Tim Hortons 2nd Quarter results program for Canada Day roll-up the rim was highly successful. It increased restaurant awareness in Canada as well as sales. The Espresso program over the past two months is showing growth each week, and Camp Day raised $13.7 million which will send 20,000 under privileged children to camp.

RBI is putting a great deal of emphasis in rolling out Tim Hortons internationally with a Master Franchisor agreement in Spain, the opening up of it’s first store in Glasgow, and other new international location in Manila. There was a brief mention of a deal in Mexico, however, it wasn’t expanded upon.

When asked why Tim Hortons was not having the success of RBI’s other major brand Burger King, it was explained that getting that type of increase took six years of planning and execution. Tim Hortons is only just 2.5 years in, and those increases are expected to come.

Currently, Restaurant Brands International has $3.9 billion in cash, of which some of that cash will be used to purchase back preferred shares. It also announced a dividend of $0.20 to be paid out in the fall. RBI’s 52 week low was $54.45 and it’s high was $84.15. At the time of this report it was trading at $74.97 on the TSX.

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