TORONTO, Sept 7 (Reuters) – McDonald’s Corp (MCD.N: Quote, Profile, Research, Stock Buzz) will spend $1 billion renovating its stores in Canada, the restaurant chain said on Wednesday, as competition with Tim Hortons Inc (THI.TO: Quote, Profile, Research, Stock Buzz) heats up.

The Canadian unit of the Oak Brook, Illinois-based company, which has been operating for 44 years, plans to refurbish most of its 1,400 restaurants by the end of 2012, with more than half finished by the end of this year.

McDonald’s has been outperforming its fast-food rivals globally, reaping the benefits of broadening its low-cost food menu, introducing premium items such as espresso-based coffee, and sprucing up its restaurants.

The company plans new exterior and interior designs in Canada, including fireplaces and flat-screen televisions in some stores. It expects the changes to encourage customers to linger and make more purchases.

“We’re in the midst of a brand transformation. It’s time to make our restaurants more contemporary and comfortable,” John Betts, chief executive of McDonald’s Canada, said in an interview.

He said the renovations are also aimed at increasing the chain’s capacity to serve customers its expanded menu. He sees close to double-digit sales growth at the restaurants when the changes are complete.

The news comes as McDonald’s has been promoting its coffee aggressively, while Tim Hortons, Canada’s No. 1 coffee-and-doughnuts chain, has been beefing up its food line-up.

TORONTO, Aug 30 (Reuters) – Alimentation Couche-Tard Inc (ATDb.TO: Quote, Profile, Research, Stock Buzz), Canada’s top convenience store operator, posted a 10 percent rise in quarterly profit on Tuesday but missed market estimates due to higher motor fuel prices and intense competition, sending its shares lower.

Merchandise sales at stores open for at least a year, a key measure for retailers, were up 1.5 percent in the United States and down 0.2 percent in Canada.

The company said it was facing greater competition in Canada, where pharmacies and department stores increasingly compete with grocers and convenience stores for a slice of the food pie.

Couche-Tard, which competes with 7-Eleven, owned by Japan’s Seven & I Holdings (3382.T: Quote, Profile, Research, Stock Buzz), and Pantry Inc (PTRY.O: Quote, Profile, Research, Stock Buzz) in the United States, has been faring well south of the border and gaining share at the expense of smaller independent stores struggling to stay afloat.

The company’s U.S. margins were higher because of its fresh food and food service offerings, Canaccord Genuity analyst Derek Dley said.

Couche-Tard, whose $2 billion takeover bid for U.S. rival Casey’s General Stores (CASY.O: Quote, Profile, Research, Stock Buzz) collapsed last year, is still trying to expand in the United States and is in the process of acquiring 33 stores in southern Louisiana from Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz).

Earnings for the company’s fiscal first quarter, ended July 17, rose to $139.5 million, or 75 cents a share, from $126.9 million, or 67 cents a share, a year earlier. Revenue rose to $5.18 billion.

TORONTO, Aug 30 (Reuters) – Acquisition-hungry Valeant Pharmaceuticals International (VRX.TO: Quote, Profile, Research, Stock Buzz) stepped into the battle for Canadian cold and flu medicine maker Afexa Life Sciences (FXA.TO: Quote, Profile, Research, Stock Buzz) on Tuesday with a friendly C$76 million ($77.6 million) takeover offer that tops a rival bid by 34 percent.

The deal would give Valeant control of Canada’s No. 1 selling cold and flu medicine, Cold-FX, and let the Mississauga, Ontario-based company pursue its strategy of making Canada a key growth area.

The white-knight, all-cash bid of 71 Canadian cents a share has the support of the Afexa board, and Valeant said it had lock-up agreements with Afexa directors and officers holding 8.8 percent of the stock.

Shares of Afexa, which has been fighting off a C$56.7 million hostile cash-and-stock bid from Paladin Labs (PLB.TO: Quote, Profile, Research, Stock Buzz) since early August, jumped 20 percent to 71 Canadian cents a share, matching the Valeant bid.

“It’s right in line with what Valeant has been consistently doing – building franchises through small acquisitions,” said Canaccord Genuity analyst Neil Maruoka.

“The deal is positive for Valeant the same way I thought it was for Paladin,” he said, pointing at Afexa’s Canadian sales infrastructure and brand recognition.

Afexa and Valeant agreed to a 30-day “go shop” period during which Afexa may solicit rival bids, and Valeant has the right to match any superior offers.

TORONTO, Aug 29 (Reuters) – Cautious consumer spending, fragile stock markets and increasingly fierce competition will weigh on the fortunes of Canadian retailers this back-to-school season.

Early signs show consumers are postponing sales, cutting budgets, sticking to buying essentials and searching for the best bargains.

That’s bad news for retailers, but what’s worse is the knowledge that the fight for sales will only get tougher with the arrival of U.S.-based discount retailer Target Corp (TGT.N: Quote, Profile, Research) in the market in 2013.

Target is one of a wave of U.S. players entering an increasingly packed and competitive field. The crowding is already forcing some steep discounting, and this will lower margins in the third quarter.

Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) is expanding in Canada, and J. Crew and TJX (TJX.N: Quote, Profile, Research)-owned Marshalls are in the early stage of their Canadian growth strategies.

“The pie isn’t getting any bigger. But the demand for more slices is increasing,” said Ed Strapagiel, executive vice president at market researcher KubasPrimedia. “Somebody’s got to take a smaller piece.”

Although Canada’s economy has been relatively healthy, thereby attracting U.S. retailers, consumers are continuing to take a thoughtful approach towards spending.

TORONTO, Aug 11 (Reuters) – Canadian Tire Corp (CTC.TO: Quote, Profile, Research, Stock Buzz) (CTCa.TO: Quote, Profile, Research, Stock Buzz), one of the country’s biggest retailers, said on Thursday quarterly profit fell 14 percent as it spent more on promotions and invested in infrastructure.

Profit at the company, whose flagship Canadian Tire chain sells housewares, sporting goods and automotive products, dropped even as higher gasoline prices helped boost retail sales by 5.1 percent.

Earnings fell to C$105.8 million, or C$1.29 a share, in the fiscal second qarter ended July 2, from C$122.8 million, or C$1.50, a year earlier.

Analysts, on average, had expected earnings of C$1.45 a share, according to Thomson Reuters I/B/E/S.

Revenue, which includes financial services, rose 4 percent to C$2.57 billion, compared with the average analyst estimate of C$2.62 billion.

In addition to spending on its stores and merchandising, lower-than-expected sales of some seasonal goods and costs related to the company’s Forzani Group acquisition held back profit, said Chief Executive Officer Stephen Wetmore in a release. A new loyalty program raised operating expenses.

Edward Jones analyst Brian Yarbrough said that higher costs will likely taper off in the coming quarters, as short-term investments wrap up. But competition and consumer confidence are more of a challenge.

TORONTO, Aug 11 (Reuters) – Tim Hortons Inc’s (THI.TO: Quote, Profile, Research, Stock Buzz) (THI.N: Quote, Profile, Research, Stock Buzz) profit rose 1.5 percent as Canada’s largest restaurant chain benefited from strong U.S. sales and passed along higher coffee costs to its customers, sending its shares higher.

The outperformance in the United States, a smaller market for the company than Canada, was a sign that the retailer was finally making headway in the cutthroat market.

Tim Hortons has invested heavily in advertising campaigns and promotions in the United States, where consumers are only starting to get familiar with a brand that is a household name north of the border.

Investors are focused on the lucrative U.S. market as it has the potential to become bigger than Canada, where its brand is virtually synonymous with coffee. [ID:nN13121814]

Sales at its established stores rose 3.8 percent in Canada, where price increases helped and it launched new products such as fruit smoothies.

In the United States, same-store sales rose 6.6 percent, helped by advertising campaigns that increased visibility of the brand in the country.

“The performance in the United States was outstanding,” Edward Jones analyst Brian Yarbrough said. The U.S. same-store sales growth was one of the strongest — if not the strongest – in the North American quick-service industry, he added.

TORONTO, Aug 10 (Reuters) – Rona Inc’s (RON.TO: Quote, Profile, Research, Stock Buzz) quarterly profit dropped a steeper-than-expected 40 percent as Canadian consumers cut spending on its home improvement products, sending its shares down 5 percent.

The reluctance of homeowners to invest in big-ticket renovation projects, the lifeblood of Rona’s business, has plagued Canada’s No. 1 do-it-yourself chain.

Second-quarter sales at its established stores fell 9.6 percent, following a 12.6 percent decline in the first quarter.

“The results were ugly — in all capital letters and bold,” Edward Jones analyst Brian Yarbrough said. “People are just not willing to spend.”

Second-quarter earnings fell to C$39.5 million ($39.9 million), or 28 Canadian cents a share, from C$66.3 million, or 51 Canadian cents, a year before.

Analysts on average were looking for earnings of 40 Canadian cents, according to Thomson Reuters I/B/E/S.

Revenue fell 2 percent to C$1.37 billion, missing the average analyst estimate of C$1.43 billion.

TORONTO, Aug 5 (Reuters) – Telus Corp’s (T.TO: Quote, Profile, Research, Stock Buzz) quarterly net profit rose 7 percent on gains at its wireless and Internet television segments, outshining its larger rivals and prompting the company to raise its revenue forecast for the year.

The Canadian telecoms company, whose shares dropped on Friday along with the broader market, said the rapid adoption of smartphones such as Apple Inc’s (AAPL.O: Quote, Profile, Research, Stock Buzz) iPhone boosted data revenue and fueled subscriber growth.

Telus added 94,000 wireless customers in the quarter, a decline from the number signed up a year earlier but ahead of the average estimate of analysts. Wireless revenue rose 10 percent and wireless data revenue increased 49 percent.

But the cost of activations rose 8 percent to C$370 each as the industry subsidized the cost of providing smartphones for new subscribers. For BCE Inc’s (BCE.TO: Quote, Profile, Research, Stock Buzz) Bell Canada, new activations cost even more at C$400 each, a 19 percent increase.

On average, each of the Vancouver-based company’s wireless customers spent C$58.88 a month in the quarter, up 2.5 percent but lower than analysts had estimated, Macquarie Capital Markets analyst Greg MacDonald said.

Even so, on that basis, Canada’s third-largest wireless provider had a stronger quarterly performance than its main competitors, Rogers Communications Inc (RCIb.TO: Quote, Profile, Research, Stock Buzz) and Bell, he added.

Canada’s telecoms market has largely been a three-horse race until recently, as Mobilicity, Globalive’s Wind Mobile and other entrants stepped up the pressure on them by launching discount services.

TORONTO, Aug 4 (Reuters) – Valeant Pharmaceuticals International Inc (VRX.TO: Quote, Profile, Research, Stock Buzz)(VRX.N: Quote, Profile, Research, Stock Buzz) said new generic rivals cut into sales for one of its top drugs, overshadowing a sharp rise in quarterly earnings and sending its shares down 15 percent.

Sales of Wellbutrin XL, an antidepressant that accounted for about 7 percent of revenue in the second quarter, would likely keep falling, Valeant said.

In addition, the company, one of the most acquisitive in heathcare, sees difficulties ahead in the United States, one of its main markets.

“Investors were surprised by the level of competition they faced in neurology,” Morningstar analyst David Krempa said.

The stock had risen 78 percent since the start of the year, driven by a string of acquisitions and the company’s consistent record of topping analysts’ estimates and raising its forecasts.

“The share price fall suggests something is fundamentally broken, but that’s not the case,” Canaccord Genuity analyst Neil Maruoka said. “The stock was priced to perfection.”

The company reported its results on a day when stock markets around the world dived on concerns about the health of the global economy.

TORONTO, July 21 (Reuters) – Loblaw Cos Ltd (L.TO: Quote, Profile, Research, Stock Buzz), Canada’s No. 1 grocery chain, posted a higher quarterly profit on Thursday but warned that its sales position is at risk due to “unpredictable and competitively intense market conditions”.

Competition in the C$100 billion-plus Canadian grocery sector has heated up greatly in the last three quarters, with Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) expanding its food-stocked supercenters.

Loblaw has historically competed against Metro Inc (MRUa.TO: Quote, Profile, Research, Stock Buzz) and Empire Co Ltd (EMPa.TO: Quote, Profile, Research, Stock Buzz), and the three control more than half of the grocery industry. But Wal-Mart and Costco (COST.O: Quote, Profile, Research, Stock Buzz) have been gaining share.

Sales at Loblaw stores open for at least a year, a key measure for retailers, dropped 0.4 percent in the second quarter ended June 18. Overall sales rose 0.2 percent.

The results came as newly named Loblaw president, former Carrefour (CARR.PA: Quote, Profile, Research, Stock Buzz) executive Vicente Trius, is set to join the company on Aug. 2 and as Canadian retailers prepare for the entry of Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) into the market. Target plans to open its first Canadian stores in two years.

“We are seeing a very cautious consumer that’s very value-driven. People are looking for deals right now,” Edward Jones analyst Brian Yarbrough said.

“What consumers will do is they will cherry pick” and go from one store to another to buy what’s on sale, he said.