One-time Items Mask Tim’s Growth

Article Excerpt

TIM HORTONS INC. $34 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; SI Rating: Extra risk) earned $51.8 million in the third quarter of 2006, down 21.9% from $66.3 million a year earlier. Per-share profits fell 34.2%, to $0.27 from $0.41, due to more shares outstanding. The latest results included $3 million in extra costs related to problems at a new distribution center in Ontario. The year-earlier earnings included $6.1 million in foreign exchange gains. Sales rose 7.1%, to $413.6 million from $386.1 million; same-store sales rose 5.9% in Canada, and 9.2% in the United States. A plan to equip its Canadian stores to accept credit and debit cards should spur sales in 2007. The company has authorized a plan to buy back $200 million worth of its stock, or 5% of the total outstanding. That should help offset any pressure on the stock price as some investors in former parent Wendy’s International, particularly those in the U.S., will undoubtedly sell their new…

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