Cold weather, war brought consumer 'softness' but didn't dent Tim Hortons Q1 sales
The owner of Tim Hortons says the chain's sales were up from last year, even as some consumers felt pinched by the economy. Restaurant Brands International Inc. president Joshua Kobza blamed the first-quarter "softness" at the café brand on cold weather that blasted key market Toronto in January and on the war in the Middle East, which has sparked higher gas prices and stretched consumer budgets.
"But this happens from time to time. You have a bit of macro ups and downs," he told analysts on a Wednesday call.
"If you go back a year actually, we saw something similar in Q1 and we printed a really great year overall, so our job, I think, is to deliver throughout any ups and downs that you see in the short run."
The mellowing of consumer confidence Kobza noticed came as RBI landed a first-quarter profit attributable to common shareholders of US$338 million in the period ended March 31. That compared with US$159 million a year earlier.
Revenue for the company, which keeps its books in U.S. dollars and also includes Burger King, Popeyes and Firehouse Subs, totalled US$2.26 billion, up from US$2.11 billion.
Comparable sales were up 3.2 per cent overall and at Tim Hortons, which makes up 41 per cent of RBI's operating profit, they jumped by 1.6 per cent. That increase at Tims representing the 20th consecutive quarter of positive comparable sales for the chain.
Kobza said Tims' growth was "broad" and came across every part of the day. In the morning, breakfast foods drove increases and in the evening, cold beverages drew in customers, helping the company notch a 10 per cent year-over-year climb in sales for that product segment.
Tims has paid increasing attention to its drink lineup in recent years, launching more sparkling quenchers, energy drinks and decadent Iced Capps. It's also started letting customers add protein to some beverages and is slowly rolling out fountain pop machines.
"Obviously, using bottles is pretty complicated operationally and moving to fountain machines makes things an awful lot easier and faster for our restaurant teams," Kobza said.
"It also improves the cost profile of those beverages and then, the fountain machines will also open up a lot of new innovation paths that we have on the cold beverage side."
While he didn't say what that path could entail, fast-food chains have lately been launching dirty sodas — drinks with pop as a base, flavoured syrup mixed in and often, foam on top.
McDonald's started offering those drinks in Canada this week along with refreshers — lemonade-based drinks mixed with mango, pineapple, watermelon, blackberry and passionfruit flavours. They sometimes include freeze-dried strawberries or pearls that burst with juice when popped.
Kobza's remarks came hours after RBI reported its first-quarter profit amounted to 97 cents US per diluted share, up from 49 cents US per diluted share in the same quarter last year.
On an adjusted basis, it earned 86 cents US per diluted share in its latest quarter, up from an adjusted profit of 75 cents US per diluted share in the first quarter of 2025.
Analysts on average had expected an adjusted profit of 82 cents US per share, according to LSEG Data & Analytics.
In the coming months, Kobza said Tim Hortons will launch a loyalty partnership with Canadian Tire and teased the brand could team up with some of the world's biggest owners of intellectual property.
"Some of those global, kind of family partnerships that you've seen us do elsewhere, we'll bring some of those to Canada," he said.
"We've got a couple in the lineup that ... we think are going to generate a lot of excitement and a lot of engagement within our Tims base."
Fellow RBI chain Burger King recently offered SpongeBob and Addams Family menu items.
