The parent company of Tim Hortons says it plans to invest more in Canada this year as it accelerates the pace of the coffee chain’s remodels and new store openings. Restaurant Brands International Inc. (RBI) is planning more than 300 remodels and will inject “hundreds of millions of dollars of investments” back into local markets, chief executive Josh Kobza said during the company’s first quarter earnings call on Wednesday. “We’re going to be opening up restaurants and bringing Tims to new markets and new communities,” he said. “We’re making huge investments that I think almost nobody else is making or can make in Canada.” RBI reported US$338 million in net income attributable to common shareholders for the three months ending March 31, up from US$159 million a year earlier. Diluted earnings per share were US$0.97 cents, up from US$0.49 cents a year earlier. Revenue for RBI, which also owns Burger King, Popeyes and Firehouse Subs, increased from US$2.11 billion to US$2.26 billion. System-wide sales grew 2.4 per cent for Tim Hortons, which represents 41 per cent of RBI’s operating profit. Kobza said the chain marked 20 consecutive quarters of positive same-store sales, which were up 1.6 per cent year over year. The company reported 4,569 Tim Hortons locations at the end of the quarter, up from 4,523 last year. Kobza attributed Tims’ “broad-based” growth to strength in both morning and late-night sales, largely of cold beverages and breakfast foods. That’s despite “macro softness” in Canada’s economy, which Kobza said reflected higher gas prices weighing on consumers’ confidence and a particularly rough winter in the large Toronto market. “Our job, I think, is to deliver throughout any ups and downs that you see in the short run, and I think those things tend to even out over the medium term,” said Kobza. RBI’s same-store sales increased 3.2 per cent, driven by strong showings from Burger King and the company’s international business, which Kobza said continues to be a “reliable” source of growth. He highlighted strong performances during the quarter in China, Japan, South Korea and Australia. Burger King led RBI’s four fast-food brands in comparable sales growth, which increased 5.8 per cent during the quarter. RBI is continuing to work on its four-year plan to grow the burger chain’s sales by renovating and modernizing U.S. locations, revamping its signature Whopper burger and improving digital operations. Chief financial officer Sami Siddiqui said the company has also faced “unprecedented” pressure from high beef prices over the last year. “We are closely monitoring beef costs and expect normalization over time, with relief now anticipated closer to 2027,” he said. Siddiqui said the company is on track to open around 1,800 net new restaurants per year by 2028, which includes between 300 and 400 in Canada and the U.S. RBI started repurchasing shares in March for the first time in two years, buying 463,442 common shares for US$34 million during the quarter. Between March 31 and April 30, it repurchased another 337,204 common shares for US$26 million. As of April 30, the company had US$940 million remaining under its share buyback program. Siddiqui said RBI is on track to repurchase roughly US$500 million in shares for the full year. Tim Hortons’ parent RBI posts higher revenue, lower profitWhat fast food’s downturn says about the U.S. economy The company also declared a dividend of US$0.65 per common share and partnership exchangeable unit of Restaurant Brands International Limited Partnership. “In total, we returned approximately (US)$315 million of capital to shareholders in Q1, through dividends and share repurchases,” said Siddiqui. Shares of RBI were trading lower on Wednesday afternoon, but the company’s stock is up nearly 12 per cent over the last year. • Email: jswitzer@postmedia.com
RBI, parent of Tim Hortons, planning ‘huge investments’ in Canadian markets
