Second Cup reveals relatively flat third quarter results

Canada’s Second Cup coffee chain announced its third quarter results on 4 November, revealing relatively flat figures due to “intense competition”. Same café sales experienced a decline of 0.1 per cent in the quarter, the company reported in a press release. Revenue in the sale of goods, including revenue from company-operated cafés and the sale of coffee through wholesale and retail channels, was reportedly at CAD$750,000, compared to CAD$963,000 for the three months ended 30 September 2010. The reduction was attributed to operating eight company-operated cafés in 2010, compared to six for most of the third quarter in 2011, with two cafés becoming corporate at the end of the quarter. System sales increased by 1.7 per cent, up by CAD$786,000 to $46.37 million. The company opened 10 new cafés and closed one underperforming one, with a total of 359 sites compared to 345 at the end of the third quarter in 2010. Year-to-date system sales for the 39 weeks that ended 1 October 2011 stood at CAD$139.26 million. The company noted it continued to increase its sustainability efforts, with 80 per cent of their coffees and 100 per cent of their espresso beverages Rainforest Alliance certified.
“This commitment to quality and certification supports Second Cup’s unique position in the market as The Coffee Company that Cares,” Second Cup President and CEO, Stacey Mowbray, said in a statement. The company noted that for 2011, management is targeting to regain growth with positive same café sales and the addition of net new cafés. In 2011, it expects to open a total of approximately 25 new cafés, close 10 to 15 underperforming cafés and renovate 25 cafés.  The statement further said it would look to drive traffic into cafés through external messages, sampling and product news.