MISSISSAUGA, Ont. - The Second Cup's chain of specialty coffee shops produced less revenue in the fourth quarter than a year earlier but shook off the huge loss it recorded at the end of 2012.
The $1.8-million net income for the 13 weeks ended Dec. 28 marked the second consecutive quarter of improvements for Second Cup, which had posted a $10.1-million loss in the second quarter.
It was also an improvement from a $12-million net loss in the fourth quarter of 2012, which included a $15.6-million asset writedown.
The financial report issued Monday is the first for Second Cup (TSX:SCU) since it appointed a new president and CEO â€” a former Starbucks vice-president who recently had been at Holt Renfrew.
Second Cup chairman Michael Bregman said in last month's announcement that the arrival of Alix Box from the luxury retailer would mark a "new era of success" for the company.
Specialty coffee vendors like Second Cup and Seattle-based Starbucks face more intense competition from other restaurant chains such as McDonald's and Tim Hortons.
"I am excited for the opportunity to lead Second Cup. Our objectives are ambitious," Box said in a statement Monday.
Box said she and board of directors intend to "reinvigorate" the Second Cup brand.
"Notwithstanding the near-term impact on profitability, I am committed to make the best decisions to maximize long-term shareholder value."
Second Cup has more than 350 cafes across Canada.
Total sales at Second Cup cafes declined to $51.9 million in the fourth quarter ended Dec. 31 from $53.5 million, with four fewer locations. Corporate revenue received by the Toronto-area company, on the other hand, rose to $8 million from $7.8 million.
Net income amounted to 12 cents per share in the 2013 fourth quarter, compared with a net loss of $1.21 per share a year before. Adjusted earnings per share slipped to 17 cents from 18.2 cents.
For the full year, system revenue was $191.4 million, down about $3 million from 2012, corporate revenue was $27.2 million, up nearly $1 million, net loss was $7.4 million, about $3 million less than in 2012.
The full-year net loss was 74 cents per share, compared with 95 cents in 2012; adjusted earnings were essentially flat at 45 cents per share.