Buy Tim’s for Brand Strength & Growth

Article Excerpt

TIM HORTONS INC. $29 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; SI rating: Extra risk) has 2,900 coffee and donut stores in Canada and the United States. Franchisees own 97% of these outlets. On March 24, 2006, Tim Hortons sold stock to the public at $27.00 each in an initial offering. That cut parent Wendy’s International Inc.’s interest, from 100% to 82.75%. Wendy’s plans to hand out its remaining Tim Hortons shares to its own shareholders by the end of this year. In the three months ended April 2, 2006, Tim Hortons earned $0.39 a share (total $63.6 million), up 30.0% from $0.30 a share ($47.5 million) a year earlier. Most of that gain came from non-recurring tax rulings that cut its tax bill by $10.1 million. Revenue rose 15.2%, to $372.8 million from $323.6 million, thanks to successful new menu items and 27 new stores. Same-store sales rose 8.7% in Canada, and 9.8% in the U.S. The company plans to open…

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