Tully's says it lost less money last quarter

Tully's Coffee posted an $801,000 loss for the second quarter, an improvement from a net loss in the same three months last year of $3.3 million.

The Seattle-based coffee company opened 10 new stores in the second quarter, bringing its total to 158, up from 142 a year earlier.

Retail sales fell 7 percent from a year ago, mostly because of the August sale and subsequent franchising of five company-owned stores in Southern California.

Same-store sales, a common measure of ongoing profitability, dropped 2.7 percent during the quarter. For comparison, Starbucks saw an 8 percent decline in U.S. same-store sales during the quarter ended Sept. 28.

Tully's said in September that Green Mountain Coffee Roasters of Vermont has agreed to pay $40.3 million in cash for its wholesale business, which distributes coffee and other products to office coffee services, food-service distributors and more than 5,000 supermarkets mostly in Western states. The deal is expected to close by the end of the year.

Tully's has lost money for years, with total losses of more than $88 million. A little more than half its sales come from the U.S. coffee shops. A Tully's chain in Japan is no longer owned by the Seattle company.

CEO Tom O'Keefe said in September that Tully's will consider whether to keep the retail operation or opt for "a better value proposition for shareholders with some alternative."

Melissa Allison: 206-464-3312 or mallison@seattletimes.com