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TORONTO - Despite rising food and fuel prices in Canada and the U.S., Tim Hortons Inc. (TSX:THI) says it's on track to meet its 10 per cent income growth rate for the year after serving up an 11.5 per cent increase in its quarterly profits.

"Our second quarter results reflect the strength of our business model in what can only be described as a difficult and challenging macroeconomic environment, "CEO Don Schroeder said yesterday on a conference call.

"We continue to be on track to meet our earnings target of 10 per cent operating income growth excluding the $3.1 million restructuring charge announced last quarter," he said.

The offerings at the iconic coffee and doughnut retailer's outlets "position us well" for future growth, he said, adding the company is pushing forward with its plans to open up as many as 250 new outlets in Canada and the U.S. by the end of the year.

Second-quarter net income rose to $75 million from $67.2 million last year. That amounted to 41 cents per share, up from 36 cents last year, while sales increased to $510.7 million from $465.3 million.

Investors seemed impressed by the company's numbers boosting the stock by more than four per cent to close at $30.98 on the TSX. Tim Hortons said system-wide sales, which include sales from company-operated and franchise restaurants, grew by 9.8 per cent compared to the same period last year.