Tim Hortons owner sees big profit jump in 2016
Coffee chain ‘should be many, many times our current size’ in the U.S., CEO says
The parent company of Tim Hortons and Burger King sees fertile ground for rapid expansion for both chains in the United States, regardless of uncertainty around what policies U.S. President Donald Trump will implement during his tenure.
The United States is “one of the biggest opportunities” for expanding the coffee and burger chains, Daniel Schwartz, CEO of Restaurant Brands International Inc. (RBI), said in an interview.
Tim Hortons had 683 U.S. locations as of Dec. 31, 2016, according to financial documents. Burger King’s U.S. operations had more than 7,000 restaurants as of Dec. 31, 2015, according to the most recent filing that separates the U.S. from other markets. Schwartz said Tim Hortons “should be many, many times our current size” in the United States but added there’s no target number.
He said that the plan has not changed since Trump’s election in November or several controversial executive orders that the president has signed since moving into the White House in January.
“We want to expand our brands all around the world and that also doesn’t change based on the political environment,” Schwartz said.
RBI is also intent on rapidly expanding Tim Hortons around the world, signing three separate master franchise joint venture agreements to bring the chain to the Philippines, Great Britain and Mexico. The com- pany expects to open the first locations in some of those markets this year, chief financial officer Josh Kobza said.
Schwartz is the latest head of a major Canadian company to offer insight on how they view Trump’s election, with many seeing his expected policies as positive for their bottom lines.
Last week, the CEOs of Air Canada and WestJet Airlines both expressed hope that the airline industry in Canada could benefit from Trump’s policies.
WestJet CEO Gregg Saretsky said uncertainty around new U.S. border policies could increase foreign tourism interest in Canada, while Air Canada CEO Calin Rovinescu said if Trump cuts taxes for the American airline industry, Canada might do something similar.
Also last week, Suncor Energy CEO Steve Williams said he doesn’t anticipate Trump will introduce a border adjustment tax, as Canada is not near the top of America’s list of trade concerns. RBI’s CEO made his comments the same day the company served up a big jump in profit.
Its net income for the 12 months ended Dec. 31 more than tripled to $345.6 million (U.S.), or $1.45 per share, including $118.4 million, or 50 cents per share, in the fourth quarter.
The full-year profit was up from $103.9 million, or 50 cents per share, in 2015 while fourth-quarter net income was up from $51.7 million, or 25 cents per share.
RBI says its full-year revenue was up 2.3 per cent, while revenue in the fourth quarter was up 5.2 per cent year-over-year.
Total revenue for 2016 was $4.15 billion, including $1.11 billion in the fourth quarter.
Revenue in 2015 was $4.05 billion, including $1.06 billion in that year’s fourth quarter.
Tim Hortons accounted for $3 billion of RBI’s total annual revenue while Burger King contributed $1.14 billion for the year.