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Global food service and beverage veteran Marc Caira has been picked to lead Tim Hortons Inc. as president and CEO.

Hand-out/TIM HORTONS INC.

Tim Hortons Inc. has named the former head of a global supplier to the food services industry as its new chief executive officer.

Tims announced on Wednesday that Marc Caira, who was global CEO of Nestlé Professional, is the eatery chain's new president and CEO.

The decision comes two years after the departure of former CEO Don Schroeder, who was replaced in the interim by Paul House.

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Mr. Caira, 59, will take over from Mr. House on July 2. Mr. House will become non-executive chairman of the board and Mr. Caira will stand for election as a director at the annual meeting, the company said.

The new CEO at Tims arrives as the company faces down a growing array of new rivals, including McDonald's Corp., and a consumer trend to pricier specialty coffees.

Also troublesome is pressure from Boston-based activist investor Highfields Capital Management; the hedge fund wants Tim Hortons to cut back on U.S. growth and borrow billions of dollars to fund a share buyback. It is also seeking a spin-out of the real estate assets into a real estate investment trust.

The appointment was made as Tims posted first-quarter net income attributable to stockholders of $86.2-million, or 56 cents per share, down 2.9 per cent from $88.8-million, or 56 cents per share, in the year-earlier period.

First-quarter operating income fell 2.8 per cent to $127.9-million, from $131.6-million in the year-earlier period.

Adjusted operating income was $137.4-million, up 4.4 per cent from $131.6-million.

Revenue was $731.5-million, up 1.4 per cent from $721.3-million.

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Overall traffic at restaurants was flat in the quarter, and the company cited "continued challenges due to the economy and weather" although "panini sandwich and single-serve coffee platforms contributed positively to first quarter sales."

While Tims' profit generally met analysts' expectations, its sales at established stores were below expectations, declining 0.3 per cent in Canada and 0.5 per cent in the United States. Those same-store sales at outlets open a year or more are considered a key barometer of a retailer's health.

It was the first quarter of negative Canadian same-store sales since Tims went public in 2006, Peter Sklar, retail analyst at BMO Nesbitt Burns Inc., said in a note.

"We believe this result will be of significant concern to investors," Mr. Sklar said.

Also of concern to some analysts was the new CEO's lack of experience in retail franchising, which is a big issue for executives at Tims.

Even so, Mr. Caira is a seasoned executive from the supply side of the food service business, and has a longstanding relationship with Tims, noted Perry Caicco, retail analyst at CIBC World Markets.

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Besides the top job at Nestlé Professional – with 10,000 employees and operations in about 100 countries – Mr. Caira was a member of the executive board of parent company Nestlé SA, the world's largest food and beverage company.

Prior to his position at Nestlé Professional, Mr. Caira was president and CEO of dairy and food giant Parmalat North America, chief operating officer at Parmalat Canada and president of food services and Nescafé Beverages for Nestlé Canada.

"Marc Caira is an accomplished executive with exceptional knowledge of the North American and global food services industry. His knowledge of the out-of-home hot and cold beverage and food sectors is second to none," Mr. House said in a news release.

Mr. Caira said Tims is "an iconic brand and national treasure in Canada, and in my view the company has tremendous opportunity to build on that while creating successful businesses in the United States and internationally."

At the end of the first quarter 2013, Tims had 4,288 restaurants in its network, including 3,453 in Canada, 808 in the United States and 27 in the Persian Gulf.

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