Tim Hortons hurt by U.S. weakness

The cost of restaurant closures in the United States weighed on fourth-quarter earnings at Tim Hortons despite solid results from the company's Canadian operations.

The Oakville, Ont.-based coffee chain said Friday it made a profit of $69.1 million, or 38 cents a share, down from $75.7 million, or 40 cents a share, in the same quarter of the previous year.

Closures of outlets in the United States, coupled with related charges for asset impairments, lopped eight cents per share off the company's bottom line in the most-recent quarter.

Revenues rose by more than nine per cent year-over-year to $563.7 million.

Tim Hortons' same-store sales — or sales at outlets open at least one year — showed a big difference between Canada and the United States. In Canada, same-store sales grew by 4.4 per cent in the fourth quarter, while they declined by 0.1 per cent in the United States.

"Sales growth in our core Canadian business was quite strong in the fourth quarter considering the challenging economic circumstances," said Don Schroeder, the company's president and CEO.

"At the same time, we took decisive steps to improve profitability in our developing U.S. business by closing a number of underperforming restaurants in southern New England, as announced late last year," he said.

The company also announced an 11 per cent increase in its quarterly common share dividend, and told investors it plans to begin a $200-million share repurchase program beginning in the first quarter of this year.