April 27, 2015 - 7:34 PM
Sales of dark roast coffee and lunch combos added momentum to revenue growth at Tim Hortons as parent company Restaurant Brands International pared down its losses in the first quarter helped by recent cost cuts.
The owner of Tim Hortons and fellow restaurant chain Burger King posted a net loss of US$8.1 million attributable to shareholders on Monday, which is equal to four cents per share.
The marriage of Timbits and Whoppers was finalized late last year, meaning there aren't actual comparable financial figures. In the fourth quarter, the combined operations logged merger expenses within a US$514.2-million loss, which recognized costs from the layoffs of 350 employees and other expenses.
At Tim Hortons, same-store sales were notably higher as the key industry barometer, which tracks locations open more than a year, rose 5.3 per cent.
Chief executive Daniel Schwartz said the quarterly same-store sales growth was one of the best Tim Hortons has achieved in several years.
"It's just a function of consistent execution and great operations," he said in a phone interview.
Tighter expenses helped lower Tim Hortons' quarterly cost of sales to $419.6 million, compared to its estimate of $426.3 million in costs that would have been logged if the merged company was operating a year ago.
Schwartz, who was CEO at Burger King before the Tim Hortons takeover, said the Canadian coffee brand should focus on what has made it successful in the past as it looks for more growth.
"The best way to stay ahead is constantly asking your consumers and guests what they want, listening to that and innovating," he said.
"You're going to see us doing more of the same of what we've done in the past — launch great products, give guests great value and run great restaurants."
Filtering out some factors, quarterly adjusted net income was $83.6 million or 18 cents per share, which fell short of analyst expectations of 20 cents per share, according to estimates compiled by Thomson Reuters.
However, a separate analyst survey by Bloomberg showed that profits beat estimates of 15 cents per share.
Restaurant Brands (TSX:QSR) reported US$932 million of total revenue for the three months ended March 31, little-changed from what it would have had last year if the two companies had been combined.
Improved sales at Tim Hortons were dampened by foreign exchange fluctuatations. The company reported US$682.4 million in revenue — down $8.3 million or 1.2 per cent from a year earlier. The company said revenues would have been 11 per cent higher than a year ago if the dollar's value was constant.
Burger King's revenue increased to $249.6 million, which offset the decline at Tim Hortons. Sale-store sales at Burger King rose 4.6 per cent from the first quarter of 2014.
Restaurant Brands also declared a dividend of 10 cents per common share to be paid July 3, compared with nine cents in the first quarter of this year.
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News from © The Canadian Press, 2015