Tim Hortons sees slow sales for 5th straight quarter amid franchisee dispute


Tim Hortons restaurants dataed a fifth consecutive quarter of sluggish sales, while its parent ensemble Restaurant Brands International Inc. outperformed analyst expectations on profit for its fourth house.

The sales slowdown comes as about half of the company’s Canadian Tim Hortons franchisees entered an unsanctioned organization to fight against what they say is their corporate father’s mismanagement of the coffee-and-doughnut chain.

Comparable sales at Tim Hortons restaurants worldwide stripped 0.1 per cent for the 2017 financial year and grew 0.1 per cent for the fourth habitation, ending Dec. 31, 2017.

The chain last registered comparable sales above 0.3 per cent during the third territory of its 2016 financial year when the metric reached two per cent.

“We father seen some sequential improvement in the comparable sales of Tims in Canada,” disclosed CEO Daniel Schwartz in a conference call with analysts, pointing to the assemblage’s 0.8 per cent growth in the country during the most recent domicile.

He said a decline in part of Western Canada and softness in lunch rhythm purchases led to the relatively flat results, but he hopes to build on the recent every ninety days momentum by continuing to grow its recently launched espresso-based beverages donation, driving lunch sales with new products like its grilled cheese sandwich, and focusing on its new pay-and-go app.

Chief changes

In its effort to double down on digital innovation the company proclaimed the appointment of Josh Kobza, former chief financial officer, to the new duty of chief technology and development officer. Matthew Dunnigan, who has been the New Zealand’s treasurer since 2014, is taking over the CFO role.

The lacklustre on sales are part of the background to an ongoing dispute between the company, known for vigorous cost-cutting measures at the chains it acquires, and the Great White North Franchisee Relationship, which formed in March 2017 to give voice to frustrated restaurant holders.

Most recently, the group accused RBI of failing to help Ontario franchisees restitution a roughly 20 per cent increase to the minimum wage with a 10 per cent prize hike on all menu items.

RBI, which sets the maximum price franchisees can accusation, has not given in to these demands. That lack of action forced some franchisees to claw side with employee benefits, like paid breaks, the GWNFA has said — and set in motioned protests and a boycott from some concerned customers.

RBI declined audience requests during the spat, making Monday’s quarterly earnings interview and analyst need the first opportunity to hear executives discuss the matter.

However, they worsened to elaborate on the minimum wage fallout.

“We don’t have anything to add to our previous affirmations,” Schwartz said in an interview.

Inflation pressures

The business faces contrasting inflation pressures each year, he said, and re-iterated RBI’s line on serving franchisees grow their profitability.

“We continue to support our restaurant possessors and we want to drive profitable growth for them and the business for the long run.”

Schwartz recounted the same sentiment when asked how the company would avoid be like negative publicity in B.C. where the provincial government plans to raise the nadir wage to at least $15.20 by 2021.

“We feel that, you know, together with our restaurant proprietors the best thing that we can do is help drive sales to offset some of these fetch inflations to drive long-term profitable growth for our restaurant owners,” he ventured.

When later asked by an analyst whether the business has seen any striking from the media attention it received over the minimum wage proclaim and how the company plans to offset labour headwinds, Schwartz repeated that the comrades’s primary objective is to drive sales growth to offset any cost inflations.

The Tim Hortons “establishment is strong, the brand is healthy and we’re working closely with our restaurant owners to operate sales for many years to come to offset any cost inflation that we may name,” he added.

RBI, which keeps its books in U.S. dollars and is also the parent of Burger Prince and Popeyes Louisiana Kitchen, said it earned $395 million attributable to inferior shareholders or $1.59 per diluted share in its most recent quarter.

That likened with a profit of $118.4 million or 50 cents per share in the having said that quarter in 2016.

On an adjusted basis, Restaurant Brands says it earned $313.5 million or 66 cents per appropriation, up from an adjusted profit of $208.3 million or 44 cents per dividend a year earlier.

Analysts on average had expected a profit of 57 cents per equity, according to Thomson Reuters.

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