Tim Hortons’ sales grew last quarter, surpassing pre-pandemic levels, as the coffee and donut chain continues to expand its product lineup in the dinner category.
Restaurant Brands International ( QSR ) ( QSR.TO ), the parent of Tim Hortons, Burger King, Popeyes and Firehouse Subs, says the chain’s system-wide sales rose to $1.95 billion in the three months ended Sept. 30. From the US$1.78 billion reported last year and in 2019. Comparable sales, a key measure of retail sales that excludes newly opened locations, were up 11 percent from last year and up 5 percent from 2019.
“These results were driven by the continued strength of our core offering and our strong calendar initiatives to expand Tim Hortons into high-growth day parts and products through strategic price increases,” RBI CEO Jose Cil said on a conference call with analysts on Thursday.
“We are pleased to see that our core food offerings – breakfast and pastries – helped drive comparable sales during the quarter, with additional benefits from our cold beverage and PM food initiatives.”
Tim Hortons is in the middle of the second phase of a turnaround plan focused on expanding into the fast-growing lunch and dinner category, known in the fast-food industry as “PM daypart.” The category is the fastest growing in the fast food industry in Canada, according to Tim Hortons, representing an $8.5 billion market that is growing at an annual rate of 5 percent.
Tim Hortons has expanded its menu offerings to the lunch and dinner crowd in recent months, launching a new line of wraps and bowls that Cili said helped boost sales. The share of the company’s lunch and dinner food was 10 percent of the products sold in the third quarter.
“We’re seeing Canadians respond really well to the food and beverage innovations we’ve introduced from Tim Hortons,” RBI business director Duncan Fulton said in an interview. Yahoo Finance Canada.
“With 10 percent of all tickets now featuring PM food, that’s exciting for us because we still have quite a bit of growth runway ahead of us for lunch and dinner and breakfast…There’s a lot of room to grow.”
As part of the lunch and dinner push, Fulton says the company is introducing new savory pastries in two flavors — jalapeño and herb and garlic. Tim Hortons also recently tested bread pizzas in 20 locations in the Greater Toronto Area and is expanding the test to different locations.
“Before we make a national commitment, we still have some testing to do, but the response from our guests has been very positive,” Fulton said.
RBI, which reports its results in US dollars, saw system-wide sales rise 14 percent in the third quarter, with total revenue rising to $1.73 billion from $1.50 billion in the same quarter last year. The company reported third-quarter profit of $530 million, or $1.17 per diluted share, compared with $329 million, or 70 cents per diluted share, last year.
Analysts on average were expecting earnings of 80 cents per share and revenue of $1.66 billion, according to estimates compiled by financial market intelligence firm Refinitiv.
Shares of RBI were up about 2 percent at 12:30 p.m. ET and were trading at $81.04 on the Toronto Stock Exchange.
With Canadian Press files
Alicja Siekierska is a senior editor at Yahoo Finance Canada. Follow him on Twitter @alicjawithaj.
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