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The Second Cup coffee shop located at the corner of Eglinton Ave. East and Mount Pleasant Rd. is photographed on Aug 5, 2014.Fred Lum/The Globe and Mail

The Second Cup Ltd. says it is beginning to add more new-format locations to its network of specialty coffee cafes, which continued to lose money during the company's second quarter.

It says two new-format locations were added in July and a rollout of the new format will be accelerated.

The company says sales of the first new-format location in downtown Toronto have exceeded Second Cup's expectations but systemwide sales declined to $43.7-million in the second quarter, down 4.6 per cent from $45.8-million last year.

Second Cup is in the midst of a three-year transformation, which has included the corporate take-back of underperforming locations and a number of product and business innovations that it says will drive a return to sales growth and profit.

Same-store sales for locations open at least a year were down 3.2 per cent in the second quarter, while the number of locations in its network fell by 20 to 337 at June 27.

Second Cup's corporate revenue was up, rising to $9.4-million from $6.4-million a year earlier. Its loss was reduced to $72,000 or one cent per share from $390,000 or four cents per share.

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