Tim Hortons revenues rise, but earnings dip

by Jeff Gelski
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OAKVILLE, ONT. — Tim Hortons Inc. posted revenue growth of more than 14% to $465.3 million in the second quarter ended July 1, which compared with $406.8 million in the previous year’s second quarter. Second-quarter net income, however, dropped nearly 12% to $67.2 million, or 36c per share, from $76.3 million, or 39c per share, primarily because the effective tax rate in the second quarter was 33.8% in 2007 compared to 19.8% in 2006.

Same-store sales grew 6.5% in Canada, compared with 6.1% in last year’s second quarter, and 3.8% in the United States, compared with 8.4%.

"Same-store sales performance in Canada through the second quarter of this year has continued to exceed our expectations, driven by our strong promotional calendar, product innovation, store level operations and some price increases," said Paul House, chairman and chief executive officer. "Although U.S. same-store sales fell below our long-term targeted growth, we are executing on our plan of developing selected markets and growing our brand in the U.S.

"We feel positive about our second-quarter U.S. segment operating results, which improved significantly over the first quarter of 2007, to a slightly positive contribution."

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