Cosi Inc. (COSI) recently announced the appointment of Carin L. Stutz as the new chief executive officer (CEO) and president effective January 1. Stutz, who was president of global business development at Brinker International Inc. (EAT), will also serve Cosi’s board of directors.
In mid-September, Cosi announced the resignation of CEO James Hyatt, who was also the president and a member of its board due to personal reasons. Since then, Cosi was in search of an efficient replacement. Mark Demilio, chairman of the company’s board, is serving as the interim CEO.
Having held a number of leadership positions with top-tier U.S. eateries, Stutz can easily be tagged an industry veteran. She has a proven track record at Brinker, leading all aspects of franchise development and operations of 240 Chili's and Maggiano's restaurants around the globe. Before joining Brinker, Stutz was the executive vice president of operations at DineEquity Inc.’s (DIN) Applebee's International where she played the key role of supervising more than 1,900 company-owned and franchise restaurants in 49 states.
Prior to Applebee's, she handled the Pacific division operation at The Wendy's Co. (WEN) as a vice president. Her resume also contains some other key roles including regional operations vice president for Sodexo, U.S.A., and vice president of corporate operations for NutriSystem, Inc.
However, at the current level, we are not optimistic on Cosi as it repeatedly missed the Zacks Consensus estimates. Total revenue also declined year over year in the recently concluded third quarter of 2011 while loss per share was wider than year-ago level. The Deerfield, Illinois-based company has been witnessing negative comps since the last quarter after four consecutive quarters of growth.
Although, Cosi is taking a series of initiatives to turn around, we prefer to remain on the sidelines until those measures translate into better numbers. At this hour of crisis, Stutz’s exceptional technical as well as managerial expertise may add value to Cosi’s performance.
Cosi currently retains a Zacks #4 Rank that translates into a short-term Sell rating. We are also maintaining our long-term Underperform recommendation on the stock.
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