Reflecting on 2015, the success of same-store sales at Tim Hortons was a significant driver in earnings performance at parent Restaurant Brands International, Inc. That trend is expected to continue into 2016 and beyond, said Josh Kobza, chief financial officer of Restaurant Brands International, in a March 9 presentation at the UBS Global Consumer Conference in Boston.
Kobza said Tim Hortons’ performance during 2015 was not an anomaly, and instead is part of a 20-plus year track record of growing same-store sales every single year.
“For me, it really speaks to the strength of the brand,” Kobza said.
Several aspects of the company’s business, including coffee, are driving that strength.
“We have an incredibly strong coffee business in Canada, and we continue to build on that,” he said. “We built on that by launching dark roast and continued to build that business in 2015 while still maintaining the rest of our coffee business. And that was a big, big accomplishment for us.”
Tim Hortons also was successful in building out its baked goods business, Kobza said. Last April, the company began selling a Nutella donut and other Nutella-based treats, a limited-time offering that is set to return this spring. The company also introduced filled cookies, which are a simple variation upon a core piece of Tim Hortons’ product mix.
Another big contributor during 2015 was AM/PM grilled wraps.
“It’s something we launched in Q3 and allowed us to build both on our breakfast business, but also lunch,” Kobza said. “And I highlight that one in particular because I think it was a great way to leverage equipment we already had in the store. Relatively operationally simple innovation, but something that’s allowing us not just to build our base breakfast business, but also to utilize the restaurant more throughout the day and build our lunch business as well.”
Beyond innovation, Tim Hortons is building its presence in the United States. Mr. Kobza described Tim Hortons expansion in the United States as “perhaps our most exciting development opportunity all around the world.”
Tim Hortons currently has more than 600 restaurants in the United States, giving it a good base to build off of, Kubza said.
“It’s (the United States) the largest quick-service restaurant market in the world and it’s one where people love to consume coffee and baked goods,” he said. “So I think it’s clearly a market where there’s a huge opportunity for us to succeed.”