Tim Hortons, Canada’s biggest restaurant chain, reported higher quarterly profit on Thursday on strong sales growth at its established stores, but missed analysts' expectations of 52 cents a share.
Same-store sales rose 2% in Canada, down from 5.2% growth a year before, while sales in the US were up 4.9% due to higher prices at these locations. In the first quarter of 2010, US comparable sales rose 3%.
The Oakville-based company said Canadian same store sales growth in the quarter was significant given the impact of heavy snowfalls in key markets, and increased food and beverage prize redemptions - a result of the company's 25th anniversary of the Roll up the Rim to Win promotion.
Tim Hortons opened 11 stores across the U.S., including 5 self-serve kiosks while increasing its marketing and advertising to cement brand awareness.
Total revenue for the quarter rose 10.4% to $643.5 million, from $582.6 million a year before, which Tim Hortons attributes to the sale of new products, higher franchise revenue and distribution sales.
First quarter earnings grew to $80.7 million, or 48 cents per share, compared to $78.9 million, or 45 cents per share, a year before.
Operating income fell 1.3% to $119.7 million, which the company anticipated, it said, due to a loss from the sale of its interest in Maidstone Bakeries.
Still, Tim Hortons stood by its initial full year earnings forecast of between $2.30 and $2.40 per share. During the quarter, the company opened 31 Canadian locations.
On Thursday in Toronto, Tim Hortons' stock traded at $46.19, down 3% as of 9:55 a.m EST.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.