Tim Hortons owner profit beats Street on lower costs, new items

Reuters — Restaurant Brands International, owner of Burger King and Tim Hortons, reported a better-than-expected quarterly profit, helped by new menu items and lower costs.

Most of Restaurant Brands outlets are in the U.S. and Canada. But the company has been opening new restaurants in France, Brazil, Russia and India, following its peers such as Starbucks, Krispy Kreme, McDonald’s and Yum Brands.

Oakville, Ont.-based Restaurant Brands said China, where it has a relatively smaller presence than its peers, is one of its fastest growing markets.

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Burger King opened in India last year and the company may launch its coffee and doughnut chain Tim Hortons in the country, chief financial officer Joshua Kobza told Reuters.

Starbucks, Krispy Kreme and Dunkin’ Donuts have been expanding in the fast-growing India market, while Cafe Coffee Day, the country’s biggest coffee chain, is going public.

Breakfast demand

Tim Hortons’ comparable sales increased 5.3 per cent in the third quarter, helped by the launch of new breakfast items, lunch wraps and continued demand for beverages.

Breakfast is the only U.S. restaurant meal time seeing an uptick in customer visits and Burger King was the No. 4 choice for “Breakfastarians”, according to recent survey.

Burger King’s comparable sales increased 6.2 per cent, helped by new menu items such as Fiery Chicken Fries and the Extra Long Jalapeño Cheeseburger. Burger King opened 141 new restaurants during the three months ended Sept. 30.

The company, posting third-quarter results for the first time, said total operating costs and expenses declined about nine per cent to $675.7 million (all figures US$).

Net profit attributable to shareholders soared to $49.6 million, or 24 cents per share, in the third quarter, from $9.6 million, or five cents per share, in the second quarter.

On an adjusted basis, Restaurant Brands earned 34 cents per share, beating analysts average estimate of 28 cents per share, according to Thomson Reuters I/B/E/S.

The company’s quarterly revenue fell two per cent to $1.02 billion, slightly missing analysts’ estimate of $1.04 billion.

Restaurant Brands’ stock had risen a little more than 10 per cent this year through Monday.

Reporting for Reuters by Anet Josline Pinto, Sneha Banerjee and Manish Parashar in Bangalore.

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