Brewing up a boost at Tims

Coffee chain posts strong rebound, but struggles remain.

Canada’s top coffee and doughnut chain posted a strong rebound in sales in its latest quarter, but rising commodity prices and the high demand for restaurant workers threaten to dampen growth as the economy reopens from COVID-19 lockdowns.

The parent company of Tim Hortons said Friday profit more than doubled in its second quarter as revenue across its brands — including Popeyes and Burger King — jumped a whopping 37 per cent.

But Restaurant Brands International Inc., the fast food holding company behind all three restaurants, said inflationary pressure on goods and wages could challenge the pandemic recovery.

“The restaurant industry, like many other industries, is facing rising commodity costs and wage inflation,” Restaurant Brands CEO José Cil said during a conference call with analysts.

“Staffing continues to be a challenge,” he said. “While the situation is evolving daily, we’re working closely with our franchisees to provide tools and share best practices, including recruiting and hiring initiatives, employee retention programs and technologies that simplify the hiring process.”

The company is also planning a national media campaign to help support recruiting efforts in Canada, Cil said.

Restaurant Brands, which reports in U.S. dollars, said its net income attributable to shareholders was $390 million (U.S.), or 84 cents per share, in the second quarter, up from $163 million, or 35 cents per share, a year earlier.

Adjusted profit reached $358 million, or 77 cents per share, up from $154 million, or 33 cents per share, in the second quarter of 2020.

Revenue was $1.44 billion, up from $1.05 billion in the prior year quarter, with Tim Hortons same-store sales increasing 27.6 per cent a year after decreasing 29.3 per cent. Total system-wide sales were $8.9 billion, up from $6.8 billion.

Analysts expected adjusted profits of 61 cents per share on $1.36 billion of revenue, according to financial data firm Refinitiv.

The company says global system-wide sales growth was four per cent higher than in 2019, before COVID-19 caused restaurant closings, while 378 net new locations were added in the first half of the year.

Digital sales increased nearly 60 per cent from a year ago and 15 per cent from the first quarter.