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Second Cup posts reduced loss, new format store exceeds management expectations

Second Cup is in the midst of a three-year transformation, which has included the corporate take-back of underperforming locations and a number of product and business innovations that it says will drive a return to sales growth and profit.
Second Cup is in the midst of a three-year transformation, which has included the corporate take-back of underperforming locations and a number of product and business innovations that it says will drive a return to sales growth and profit. THE CANADIAN PRESS/Chris Young

MISSISSAUGA, Ont. – The Second Cup Ltd. says it’s beginning to add more new-format locations to its network of specialty coffee cafes, which continued to lose money during the company’s second quarter.

It says two new-format locations were added in July and a rollout of the new format will be accelerated.

The company says sales of the first new-format location in downtown Toronto have exceeded Second Cup’s expectations but systemwide sales declined to $43.7 million in the second quarter, down 4.6 per cent from $45.8 million last year.

Second Cup is in the midst of a three-year transformation, which has included the corporate take-back of underperforming locations and a number of product and business innovations that it says will drive a return to sales growth and profit.

Same-store sales for locations open at least a year were down 3.2 per cent in the second quarter, while the number of locations in its network fell by 20 to 337 at June 27.

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Second Cup’s corporate revenue was up, rising to $9.4 million from $6.4 million a year earlier. Its loss was reduced to $72,000 or one cent per share from $390,000 or four cents per share.