MISSISSAUGA, ON, Canada – The Second Cup Ltd. reported financial results today for the second quarter ended June 25, 2016. “We remain focused on re-franchising corporate cafes to dynamic operators for the long term success of the business” says Ms. Alix Box, President and CEO, The Second Cup Ltd.
“I’m encouraged by the positive response to our newest breakfast sandwiches, FroChos and flavoured Frappes.”
Second Quarter 2016
Same store sales were -1.3% in Q2 and -1.2% year to date. Alberta’s ongoing economic downturn continued to negatively impact overall same store sales by approximately 1.1% in the quarter. Recent same store sales have improved to +1.3% for the first 4 weeks of Q3.
The Net Loss of $441,000 for the quarter was negatively impacted by the large number of corporate stores.
The company continues to work aggressively to reduce the number of corporate stores through franchising to strong operators and returning to an asset light model. In spite of the negative impact on short term profitability, Second Cup believes this is the right approach to create long term value.
The company’s current debt facility is due in January 2017. Accordingly, the company is actively pursuing options to refinance this debt including alternative debt financing, issuance of equity or other strategic alternatives.
Second Cup’s strategic focus on premium quality food and beverage innovation advanced this quarter with the introduction of the new breakfast program now in approximately 50% of cafes, the new and unique Batch49 coffee blend, available hot or cold and flavour extensions on FroChos, its signature frozen hot chocolate.
Second Cup Toronto franchisee Eduardo Eed says, “In my cafes I’m seeing strong growth with the new breakfast sandwiches, the fresh local bakery program and innovative beverages like FroChos and Batch49”.
The incredible response to Batch49 from franchisees and customers has resulted in the company’s decision to offer Batch49 daily in all stores.
Comments on the company’s Facebook page include “Batch49 from Second Cup is amazing! Wow!”, “My new favourite”.