Cosi Inc. (COSI), a premium casual dining restaurant chain, recently reported its third quarter 2011 sales results. Total revenue, which comprises company-operated restaurant sales and franchise fees and royalties, decreased 6.6% year over year to $25.3 million, owing to lower company-owned restaurant sales. Sales were also below the Zacks Consensus Estimate of $28.0 million.
Company-operated restaurant sales tumbled 7.1% to $24.5 million, due to the shut down of 6 company-owned restaurants in the reported quarter and sluggish comparable sales. However, franchise fees and royalty revenues rose 11.0% to $0.9 million, benefiting from fees gained from the termination of franchises during the quarter.
System-wide comparable restaurant sales during the third quarter of 2011 inched down 3.0%, due to lower traffic as consumers continue to remain skeptical regarding their spending. Comparable restaurant sales represent a key figure, which measures growth at restaurants in operation for more than 15 months. Cosi experienced a dip in its comps for the second time after recording upside for four consecutive quarters except the last one.
Company-owned comparable restaurant sales fell 3.0%, entirely due to the decrease in customer visitation. Moreover, same-store sales at franchise operated restaurants plunged 3.0%. Despite lower consumer discretionary spending, Cosi continues to pursue marketing initiatives to expand its customer base and drive traffic by providing catering services for breakfast as well lunch day parts.
During the second quarter of 2011, Cosi posted a 9.2% year-over-year decline in total revenue, as company-owned restaurant sales tumbled 8.7%. Moreover, franchise fees and royalty revenues dropped 24.2% year over year. In the reported quarter, system-wide comparable sales inched down 0.2% from the year-ago quarter due to sluggish consumer spending. The company-owned comparable restaurant sales upped 0.5%, but same-store sales at franchise-operated restaurants declined 1.3%.
The Deerfield, Illinois-based company is slated to release its third quarter 2011 results on November 10, 2011. Its prime competitors include Panera Bread Co. (PNRA) and Starbucks Corp. (SBUX).
COSI INC (COSI): Free Stock Analysis Report
PANERA BREAD CO (PNRA): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment