We knew that is wasn’t looking good for Second Cup, but this is really not what we were expecting. Q2 results were announced today and the first paragraph spelled its future: “In order to focus on growth and maximize long-term shareholder value, the company announced it is suspending its quarterly dividend effective immediately.”
This is not good news for investors. Alix Box, President and CEO of Second Cup needs is aiming for more than a second life — or second coming. Box said, “As I previously communicated, we have embarked on a journey to restore Second Cup to a leadership position with growth in sales and profitability. Already we have completed a number of important steps including the downsizing and restructuring of our Coffee Central team, improving franchisee profitability, and assembling a talented new leadership team. We are all passionately dedicated to delivering the best specialty coffee experience for our customers.”
Here are some numbers:
– $1.6 million of one-time restructuring costs and estimated annual savings of $2.3 million
– Sales of cafés decreased by 3.9% to $45.8 million compared to a year ago.
– Same café sales decreased 5.0%.
– Announced the August launch of single-serve Keurig K-Cup compatible coffee capsules.
Second Cup currently has 357 stores, down from 362 at Q2 2013, with total revenue for the quarter sitting at $6,498,000.
“We are in the early stages of Second Cup’s transformation and I am proud of our progress to date. We are developing a “store of the future” which will introduce exciting new levels of innovation and excellence for Second Cup and the Canadian coffee lover. Later this year, we will unveil a new and very different Second Cup store in downtown Toronto. It is our plan to roll out its best attributes across the country in the coming years. Together with my team, we are crafting a detailed strategic plan for Second Cup’s future,” said Box.