MISSISSAUGA, Ont. – Coffee chain The Second Cup Ltd. (TSX:SCU) has suspended its quarterly dividend as part of a plan to refocus on growing the business.
The company, which has struggled amid heightened competition in the coffee business, posted a second-quarter adjusted profit of eight cents per share versus 14 cents a year ago.
Sales fell 3.9 per cent to $45.8 million while same cafe sales dropped five per cent, in the three months ended June 28.
Meanwhile, revenue for the company — which includes royalties — slipped to $6.5 million from $6.6 million a year earlier.
Operating expenses grew to $4.1 million from $3.8 million.
The suspension of the dividend comes as the company considers “attractive opportunities to invest capital.”
Second Cup has been reworking its operations in an attempt to compete against larger competitors like Tim Hortons (TSX:TSX), Starbucks and McDonald’s, which made an aggressive foray into coffee several years ago.
In recent quarters, the company has reduced its management structure and focused on improving profitability at its franchise locations.
Second Cup says it plans to unveil a “store of the future” in downtown Toronto later this year that will showcase innovative ideas that will eventually rollout across the country.