Tim Hortons plans 900 new outlets, food revamp

Tim Hortons Inc., Canada’s dominant coffee chain, is planning a major expansion, opening 900 outlets, introducing new menus and revamping its U.S. restaurants, to boost revenue and profit.

The company, which will outline its plans to investors at a conference today, said 600 of the new restaurants will be in Canada, with a particular focus on Quebec and the west of the country.

The U.S. outlets will be mainly in areas where the company already has a presence, such as New York, Ohio and Michigan.

Tim Hortons is the fourth largest publicly-traded restaurant chain in North America based on market capitalization. The company has 3,578 restaurants serving up its trademark donuts and coffee.

"Our strategies will continue to transform Tim Hortons, not only adding significant scale but also introducing important additional growth layers to our business platform to extend our position as a leader in the North American restaurant industry," Don Schroeder, president and CEO said in a statement.

"We are a growth company with significant long-term opportunities in Canada, and we are also excited by the prospects of continued profitable growth in the U.S., and potentially internationally in the longer term.”

The company’s stocks jumped 3% to $32.93 in early trading, outpacing the S&P/TSX index which was up 0.8%.

Tim Hortons said it’s targeting operating income growth of between 8% and 12% this year, with same store sales in Canada forecast to rise between 3% and 5%.

In the U.S., the company sees same store sales growth of between 2% and 4%.

After this year, the company is targeting earnings per share growth of between 12% and 15% for the remainder of the plan, which runs through to 2013.

The company plans to expand its menus throughout the day, from more breakfast foods through to afternoon and evening snacks.

In the U.S., it plans a new restaurant design as part of a plan to become famous as a café and bakeshop destination.