The Second Cup report second quarter loss

The Second Cup has reported a net loss of US$55,000 for the second quarter 2015. Despite what appears to be a disappointing result, the Canadian coffee retailer has actually managed to reduce its losses, from a total US$298,000 throughout the same period last year. The Second Cup’s total revenue from company-owned café and product sales, royalties, and franchise fees for the quarter was US$7192, compared to US$4910 in 2014. The Second Cup attributed the increase to additional company owned cafés, as well as growth of the product sales segment of the business. Franchise revenue decreased slightly year-on-year, which the company put down to the new royalty incentive, lower café sales, and the increase in corporately owned cafés. The Second Cup is continuing its take backs of underperforming cafés, with the plan to improving and modernizing and then re-franchising to owner operators. “While the larger number of company owned cafés has and will continue to negatively impact short-term profitability, we expect significantly improved income as we return to our asset light business model,” said Alix Box, The Second Cup’s President and CEO. The first rebranded café was reopened in Toronto in December last year, part of a three-year plan to roll out the specialty store concept. “Year to date sales of our pilot store of the future have grown 43 per cent, which gives us great confidence as we accelerate our new store and renovation plans,” said Alix. “I am pleased with our progress, but much work remains ahead.” In July, the next step in the company's three-year strategic growth plan began with the rollout of two additional rebranded cafés in Montreal. Founded in 1975, there are now more than 345 The Second Cup franchised and company owned cafés.