A must-know overview of Tim Hortons’ 2nd quarter 2014 earnings
An overview of Tim Hortons' 2Q14 earnings and Burger King merger (Part 1 of 11)
Tim Hortons Inc. company overview
Tim Hortons Inc. (THI) is headquartered in Ontario, Canada. It operates quick-service restaurants mainly in the U.S. and Canada, with more than 4,500 locations.
Tim Hortons offers coffee, cold speciality beverages, teas, fruit smoothies, classic sandwiches and panini, soups, chilli, wraps, and breakfast items like sandwiches, donuts, bagels, muffins, oatmeal, danishes, and croissants.
Earnings per share
Tim Hortons Inc.’s second quarter earnings were released on August 6, 2014. The company reported diluted earnings per share (or EPS) of $0.84, which increased by 6 cents compared to EPS of $0.79 in the corresponding quarter last year.
The increase was primarily due to the company repurchasing shares worth ~$900 million. This move led to a decrease in outstanding diluted weighted average shares from 153 million to 134 million shares.
The company’s total operating expense as a percentage of sales remained unchanged at 78% compared to the same period last year. Net profit margins slightly declined, to 14.2% from 15.5% over the same quarter last year.
Competition
In the U.S., Tim Hortons competes with with chains like:
McDonald’s (MCD), which reported earnings per share of $1.40, up 1% from last year
Starbucks (SBUX), which reported earnings per share of $0.67, up 21% from last year
Dunkin’ Donuts (DNKN), which reported earnings per share of $0.43, up 13% from last year
The Consumer Discretionary Select Sector SPDR Fund (XLY) includes both McDonald’s and Starbucks. It gives you wider exposure to the restaurant industry.
Topics discussed in this quarterly overview
In this quarterly overview series for Tim Hortons Inc., we’ll take a deeper look at the earnings and strategic changes or tactics that management discussed during the earnings call. We’ll also discuss key value metrics like same-store sales, the impacts of costs, how the market reacted to the earnings, and Tim Hortons’ year-to-date stock performance.
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