Tim Hortons profit drops 22 percent in 3rd quarter

Tim Hortons says profit falls 22 percent in 3rd quarter amid higher food costs, reorganization

• On 12:02 pm EDT, Friday October 30, 2009

PORTLAND, Ore. (AP) -- Tim Hortons Inc. said Friday that its profit fell 22 percent in the third quarter as the restaurant operator coped with higher food costs and expenses tied to the reorganization of its Canadian business

The company, headquartered in Canada with business both there and in the U.S., reported income of 61.2 million Canadian dollars ($56.6 million), or 34 Canadian cents (31.4 cents) per share, down from 78.8 million Canadian dollars ($72.9 million), or 43 Canadian cents (40 cents) per share earned in the same quarter last year.

The latest quarter's results include a negative impact of 23.1 million in Canadian dollars ($21.4 million) from reorganizing its Canadian business.

Revenue grew nearly 11 percent to 563.6 million Canadian dollars ($521.2 million), with large gains in franchise fees.

Analysts polled by Thomson Reuters expected the company to earn 44 cents per share on revenue of $533.7 million. Analyst estimates typically exclude one-time items.

Sales at stores open at least a year grew 3.1 percent in Canada and 4.3 percent in the U.S. Sales at stores open at least a year are considered a key indicator of a retailer's performance as they measure growth from existing stores rather than new ones.

Costs of sales grew nearly 12 percent for the quarter, largely because of higher commodity costs for foods that trickled down to the company. The company's operating and administrative costs also grew.

U.S.-listed shares of Tim Hortons fell 84 cents, or 2.8 percent, to $28.80 in midday trading.

Buzz up!