Deerfield, Illinois-based
Cosi Inc.
(
COSI
) recently announced that it has inked a deal with CRM Partners
Inc., its franchisee in New Jersey, to open a new restaurant in
Hackensack. The unit is scheduled to open in May and it will mark
the fourth restaurant of the company in the state. The company
currently operates 136 restaurants, out of which 80 are
company-owned and 56 franchised.
We believe the opening of the new restaurant in New Jersey, one
of the most densely populated state in U.S as well as one of the
wealthiest states with respect to household income, will immensely
benefit the company in driving traffic. Moreover, we believe the
company should continue to open new restaurants in order to enhance
its market share as industry peers such as
Red Robin Gourmet Burgers Inc.
(
RRGB
) and
The Cheesecake Factory Inc.
(
CAKE
) are also on a modest expansion mode.
The company 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. The premium casual dining restaurant chain
operator expects the same trend to continue in the first quarter of
2012.
Sales for the fourth quarter of 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.
To further drive revenue, Cosi launched an enhanced catering
menu at the beginning of the ongoing fourth quarter. Cosi is also
planning to implement online catering access, which is slated for
launch in 2012.
The fast casual restaurant company is slated to release its
fourth quarter 2011 results on March 29, 2012. Estimates have not
budged in the last 30 days, implying that the analysts do not see
any near-term catalysts. The Zacks Consensus Estimate for 2011 and
2012 are pegged at a loss of 12 cents and earnings of 2 cents,
respectively.
Cosi currently retains a Zacks #3 Rank (short-term Hold rating).
We are also maintaining our long-term Underperform recommendation
on the stock.
CHEESECAKE FACT (
CAKE
): Free Stock Analysis Report
COSI INC (
COSI
): Free Stock Analysis Report
RED ROBIN GOURM (
RRGB
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research