Tim Hortons 1Q profit falls, names new CEO

Tim Hortons net income fell 3 percent in the first quarter, weighed down by higher costs and expenses.

The Canada-based restaurant chain also said Wednesday that Paul House will step down as CEO and named longtime Nestle executive Marc Caira as his successor.

For the period ended March 31, Tim Hortons Inc. earned 86.2 million Canadian dollars ($85.8 million), or 56 Canadian cents per share (55.7 cents). In the prior-year period, the company earned 88.8 million Canadian dollars, or 56 Canadian cents per share.

Analysts surveyed by FactSet expected higher earnings of 62 Canadian cents per share.

Shares of Tim Hortons dropped $1.40, or 2.4 percent, to $56.96 in morning trading in New York. The stock has traded in a 52-week range of $45.41 to $58.34.

Total costs and expenses increased to 603.6 million Canadian dollars from 589.7 million Canadian dollars.

Revenue climbed 1 percent to 731.5 million Canadian dollars ($727.9 million) from $721.3 million Canadian dollars a year ago. Wall Street expected revenue of 749.4 million Canadian dollars.

Tim Hortons said that Panini sandwiches and single-serve coffee gave a boost to its quarterly sales, which were hampered somewhat by bad weather and tough economic conditions.

Revenue at Canadian stores open at least a year dipped 0.3 percent. The figure fell 0.5 percent for U.S. locations. In both instances, higher prices were offset by fewer transactions.

Tim Hortons said that House, who had served as executive chairman, president and CEO, will become non-executive chairman when Caira takes over the CEO role on July 2.

House joined Tim Hortons in 1985 as vice president of marketing, according to the company web site. He became president in 1995 and CEO in 2006. He added the executive chairman title in March 2008.

The 59-year-old Caira recently served as Global CEO of Nestle Professional.

Caira, who will also become president, will be nominated for a Tim Hortons board seat at the annual shareholders meeting on Thursday. Caira will be nominated instead of Ronald Osborne, who died last month.

The company's board also declared a quarterly dividend of 26 Canadian cents (25.9 cents) per share. The dividend will be paid on June 7 to shareholders of record on May 23.