Diedrich Coffee posts Q4, FY loss
Published:27-September-2006
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California's Diedrich Coffee, which recently secured a deal to sell its company-owned stores to market leader Starbucks Corporation, has reported a net loss of $7.8 million for the year ended June 28, 2006, compared to a profit of $14.6 million in 2005.
The group's losses in the fourth quarter of the year widened to $3.1 million, compared to $1 million a year earlier, despite a 12.4% increase in revenues to $18.3 million.
Revenue for the full year was also up 13.2%, or $6.9 million to $59.5 million compared with $52.5 million in the prior year.
System-wide comparable store sales at Diedrich Coffee brand coffeehouses open for at least one year declined by 0.6% for the year and 1.7% for the quarter, as compared with the prior year periods, while comparable store sales at Coffee People brand locations increased 8.4% for the year and 10.5% during the fourth quarter.
Compared to the prior year, system-wide comparable store sales at Gloria Jean's locations declined 2% for the year and 1.3% during the fourth quarter.
On September 14, 2006, the coffee maker entered into an agreement to sell most of its 47 company-owned locations to Starbucks for up to approximately $13.5 million as part of its plans to close its Diedrich Coffee and Coffee People company-owned locations but retain the brands for its wholesale and franchise operations.
The deal is part of its plan to narrow the focus of the retail side of the business on its franchise operations.
The company's 200 retail outlets, the majority of which are franchised, are located in 33 states. Diedrich sells its coffees through more than 800 wholesale accounts including office coffee service distributors, restaurants and specialty retailers, via mail order and the internet.
