Deerfield, Illinois-based
Cosi Inc.
(
COSI
) recently reported a 2.6% rise in its system-wide comparable
restaurant sales for the fourth quarter of 2011, after witnessing
declining comps for two consecutive quarters.
The upside in comps was driven by new initiatives and seasonally
mild weather conditions. In the month of December, which is the
holiday period, comps crept up 8.2%. Comparable restaurant sales
represent a key figure, which measures growth at restaurants in
operation for more than 15 months.
Company-owned comparable restaurant sales inched up 0.9%, due to
higher customer visitation. Moreover, same-store sales at franchise
operated restaurants climbed 5.3%. The premium casual dining
restaurant chain operator is expecting the same trend to continue
for the first quarter of 2012.
Sales for the fourth quarter 2011 also rose on the back of one
extra week of operation compared with the year-ago quarter,
same-store sales growth and higher company-owned restaurant
sales.
Total revenue, which comprises company-operated restaurant sales
and franchise fees and royalties, jumped 3.3% year over year to
$26.2 million. Sales also surpassed the Zacks Consensus Estimate of
$24.0 million.
A traffic growth of 0.6% and an increase of 0.3% in average
check resulted in a 2.8% upside in company-operated restaurant
sales to $25.3 million. Franchise fees and royalty revenues
increased 18.8% to $0.9 million.
We expect estimates to go up in the coming days based on
encouraging fourth quarter sales results coupled with positive
outlook for the next quarter. The Zacks Consensus Estimate for 2011
and 2012 are pegged at a loss of 12 cents and earnings of 2 cents,
respectively.
During the third quarter of 2011, Cosi posted a 6.6%
year-over-year decline in total revenue, as company-owned
restaurant sales tumbled 6.8%. However, franchise fees and royalty
revenues expanded 11.0% year over year. In the reported quarter,
system-wide comparable sales slid 3.0% from the year-ago quarter
due to sluggish consumer spending. Comps at both company-owned
restaurants and franchised restaurants were down 3.0% year over
year.
The company is slated to release its fourth quarter 2011 results
on March 29, 2012. Its prime competitors include
Panera Bread Co.
(
PNRA
) and
Starbucks Corp.
(
SBUX
). Cosi currently retains a Zacks #3 Rank (short-term Hold rating).
We are also maintaining our long-term Underperform recommendation
on the stock.
COSI INC (
COSI
): Free Stock Analysis Report
PANERA BREAD CO (
PNRA
): Free Stock Analysis Report
STARBUCKS CORP (
SBUX
): Free Stock Analysis Report
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