stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
RBI tops profit forecasts; shares jump
space
Tim Hortons parent said it is doubling its dividend for the first quarter of 2018
space
By MARINA STRAUSS
  
  

Email this article Print this article
Tuesday, February 13, 2018 – Page B2

Investors of the parent of Tim Hortons reacted favourably to its fourth-quarter results with profit beating analysts' expectations, helped by strong sales at the company's Burger King business despite some softness at the iconic coffee-and-donut chain.

Shares of parent Restaurant Brands International Inc. rose more than 6 per cent to close at $75.48 on the Toronto Stock Exchange. They had previously fallen 17 per cent since their peak in late October amid the company's strained relations with some of its Tim Hortons franchisees and tensions over managing higher minimum wages in Ontario.

RBI said on Monday it was more than doubling its dividend for the first quarter of 2018 to 45 US cents a share from 21 US cents a share, a hike that "is larger than anything we would have predicted," said Mark Petrie, retail analyst at CIBC World Markets.

But on the minimum-wage controversy, RBI chief executive Daniel Schwartz said Tim Hortons would focus on bolstering sales to make up for any cost inflation, without suggesting he was yielding to franchisees' push for higher prices to offset the added expense pressure.

"As it pertains to the Tims brand, the business is strong, the brand is healthy and we're working closely with our restaurant owners to drive sales for many years to come to offset any inflation we may face," Mr. Schwartz told an analyst conference call.

RBI grappled with worker protests last month after its franchisees responded to higher minimum wages in Ontario by clawing back some benefits and paid breaks to make up for the added costs. The protests added to the bad publicity for Tim Hortons that some analysts said was one of the factors driving down RBI's stock price.

But Mr. Schwartz did not indicate how Tim Hortons was performing in its current first quarter of this year when January's protests took place. On Jan. 1, minimum wages rose 21 per cent in Ontario, the chain's key market.

In its fourth quarter, Tim Hortons sales at restaurants open a year or more, a key industry indicator, rose 0.1 per cent compared with 0.2 per cent a year earlier and slipped 0.1 per cent for 2017, down from a 2.5-per-cent lift in 2016.

Still in Canada, where Tim Hortons has struggled with unhappy franchisees and tensions over minimum-wage increases, those same-restaurant sales were higher at 0.8 per cent. On the other hand, outside of Canada those critical sales may have fallen as much as 7 per cent, said David Palmer, an analyst at RBC Dominion Securities.

Same-store sales at RBI's Popeyes Louisiana Kitchen division also were soft, dropping 1.3 per cent in the fourth quarter compared with a 2.8 per cent increase a year earlier.

Mr. Schwartz, who has focused more on the Tim Hortons business amid the tensions with franchisees, said the chain was challenged by a weak economy in Western Canada as well as in its lunch business.

But he said he is encouraged by the opportunities in introducing more of its Tim Hortons customers to its relaunched espresso-based coffee as well as a new digital order-and-pay app and new lunchtime sandwiches.

He said the company is putting more focus than ever on technology to help build the business, having recently named its previous chief financial officer, Josh Kobza, as chief technology and development officer, while promoting another RBI executive, Matt Dunnigan, as chief financial officer.

In its fourth quarter, Tim Hortons's gross profit margin failed to rise for the second quarter in a row after having increased in past quarters.

But Mr. Dunnigan said the company is happy with those levels.

Some Tim Hortons franchisees have complained that RBI was overcharging them for some supplies and the company lowered some prices it charges its restaurant owners although they say the reductions aren't enough.

CIBC's Mr. Petrie said with the big boost in the dividend payout, RBI may not be as quick to do an acquisition in the coming year but is more likely to concentrate on improving sales momentum and accelerating international growth at both Tim Hortons and Popeyes. RBI acquired Popeyes last March.

Mr. Kobza said Tim Hortons' U.S. growth is progressing at a slower pace than the company had initially anticipated. But he said expansion outside of North America is advancing well, including new restaurants in Britain and the Philippines and the first ones in Spain and Mexico.

In Canada "we're still growing quite well," he said.

"You'll see us continue to do that in the future in Canada, we just chose to be a bit more selective in 2017."

In the United States "our progress there has been slower than we had hoped" but the company still sees it as "a really big long-term opportunity," he said.

RBI of Oakville, Ont. said its same-restaurant sales at Burger King, known for its Whopper burgers and onion rings, rose 4.6 per cent in the quarter ended Dec. 31. Analysts on average had expected growth of 2.5 per cent, according to Consensus Metrix.

RBI's net profit attributable to shareholders more than tripled to US$395-million or US$1.59 per share while total revenue climbed 11 per cent to US$1.23-billion.

Excluding one-time items, the company earned 66 US cents per share, beating analysts' average estimate of 57 US cents, according to Thomson Reuters I/B/E/S.

RESTAURANT BRANDS INTERNATIONAL (QSR) CLOSE: $75.48, UP $4.39

Associated Graphic

RBI grappled with worker protests last month after Tim Hortons franchisees responded to Ontario's minimum-wage hike by cutting some benefits.

DOUG IVES/THE CANADIAN PRESS


Huh? How did I get here?
Return to Main Rick_Salutin Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page