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Investors Fade the Rally in Tim Horton's Following Mixed Q4 Report, $440M Buyback Plan, Dividend Raise

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Tim Horton's (NYSE: THI) reported 2013 fourth quarter results Thursday morning. Shares jumped to a session high of $54.29, up almost 4 percent, about an hour after the opening bell; the stock has since moved below the $53.50, currently up under 2 percent to $53.25.

Tim Horton's reported C$0.69 earnings per share, missing C$0.77 analyst estimates. Earnings per share were down 1 percent from the quarter four last year. Revenues were strong at $898.50 million versus the $840.23 million analyst estimate.

Fourth quarter operating income was affected by management decisions to de-brand Cold Stone Creamery within Canadian locations as well as closing underperforming locations in the U.S.

Marc Caira, president and CEO, says Tim Horton's has, “worked to enhance our capital structure, as well as simplify our operations, strengthen our menu, and refresh our restaurants.”

The company sees 2014 same-store sales growth of 1-3 percent in Canada and 2-4 percent in the U.S.

In addition to the quarterly figures, Tim Hortons also announced a new $440 million repurchase program, as well as a 23.1 percent quarterly dividend increase to $0.32 per common share.

While Thursday's burst higher in price is nice for shareholders, the bullishness has been short lived. Sellers stepped in at $54, roughly a 33 percent retracement of January's fall.

Posted-In: Earnings News Dividends Technicals Buybacks Trading Ideas


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