Toronto, Jan. 5 - Same-store sales at Tim Hortons Inc. rose at both its Canadian and U.S. restaurants in the fourth quarter, marking a robust finish to 2006, the coffee shop chain said Friday.
Same-store sales in Canada rose 9.3 percent in the quarter ended Dec. 31, while they were up 8.3 percent in the United States. During the same period last year, Canadian same-store sales were up 5.8 percent, while U.S. same-store sales were up 6.7 percent.
During the quarter, the company introduced its breakfast sandwich in Canada and promoted its chili and garlic toast combo, among other products, in both Canada and the United States.
Canadian same-store sales were largely driven by the introduction of the breakfast sandwich, said John Glass, an analyst at CIBC World Markets, in a research note.
Glass raised his price target on Tim Hortons shares to C$35 from C$33.
Shares of Tim Hortons outdid that Friday, rising C$1.91, or 5.5 percent, to close at C$36.39 on the Toronto Stock Exchange.
Jim Durran, an analyst at National Bank Financial, maintained his "outperform" rating on the stock with a target of C$37. In a research note, he said the same-store sales in the fourth quarter were extremely strong, helped by the introduction of the breakfast sandwich.
"Anecdotal commentary following the launch of Tim's breakfast sandwich indicates that the product is not a 'home run' for the company," Durran wrote.
"However, our channel checks indicate that the sandwich is achieving a reasonable penetration rate."
For the year, same-store sales grew 7.5 percent in Canada, and 8.9 percent in the United States. That compares with 2005 increases of 5.2 percent and 7.0 percent, respectively.
"Tim Hortons had a strong finish to 2006 with solid sales growth in both Canada and the U.S. in the fourth quarter," said President and Chief Executive Paul House.
The company, which completed its spinoff from parent Wendy's International late last year, expects to release fourth-quarter results on Feb. 7. It has more than 2,600 outlets in Canada and over 290 in the United States.