TIM HORTONS OWNER BOOSTS PROFITS BUT MISSES KEY SALES ESTIMATES.

TORONTO • Restaurant Brands International Inc. posted an 87 per cent surge in profits in the second quarter, but same-store sales trailed projections at all three of its chains, including Tim Hortons.

The company, which has been involved in a very public spat with some of its Tim Hortons franchisees, said system-wide sales growth at the Canadian coffee chain grew 2.2 per cent, while other brands Burger King and Popeyes Louisiana Kitchen saw a growth of 8.4 per cent and 10.7 per cent, respectively.

However, same-store sales — a key industry metric — at Tim Hortons were flat, compared with a 0.8 per cent dip a year earlier. Same-store sales at Burger King rose 1.8 per cent last quarter, compared with projections for a gain of 2.4 per cent, according to Consensus Metrix, while Popeyes Louisiana Kitchen same-store sales rose 2.9 per cent in the second quarter, compared with estimates for 3.4 per cent growth.

To address some of the franchisee’s concerns, in June the company announced a $100 million capital investment plan over the next two years to strengthen the Tim Hortons supply chain network.

“Core to executing well against our plans is listening to and working closely with our franchisees,” said Daniel Schwartz, Chief Executive Officer of RBI. The investment involves building two new distributions centres in Alberta and British Columbia and expanding existing facility in Nova Scotia.

The company also launched the “winning together initiative” announced last quarter and implemented all-day breakfast last week, which should help boost third or fourth quarterly earnings, amid strong competition.

The brand is also in the planning stages of creating a new kids’ menu and introducing card-based and appbased loyalty programs.

CORE TO EXECUTING WELL AGAINST OUR PLANS IS LISTENING TO ... FRANCHISEES. — DANIEL SCHWARTZ