Così, Inc. (NASDAQ:COSI), the fast casual restaurant company, today
reported that estimated system-wide comparable restaurant sales for
the 2016 Period 3 and 2016 Quarter 1, as measured for restaurants
in operation for more than 15 consecutive months as Company-owned
or franchised, recorded an aggregate increase of 1.8% and 2.2%
respectively, as compared to the same periods in 2015.
The breakdown in estimated comparable restaurant
sales between Company-owned and franchised restaurants for the 2016
Period 3 and 2016 Quarter 1 are as follows:
|
4 Weeks Ended |
|
13 Weeks Ended |
|
Mar 28, 2016 |
|
Mar 28, 2016 |
Company-Owned |
|
-1.4 |
% |
|
|
1.5 |
% |
Franchised |
|
8.3 |
% |
|
|
3.7 |
% |
System-Wide |
|
1.8 |
% |
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
The 13 Hearthstone restaurants acquired by the
Company on April 1, 2015, will be included in the reported
Company-owned comparable restaurant sales results when they have
been in operation as Company-owned restaurants for more than 15
consecutive months. However, the Company began disclosing
comparable sales for the acquired restaurants separately in the
2015 Period 10. For the 2016 Period 3 and 2016 Quarter 1, the
Hearthstone locations recorded an aggregate increase in comparable
restaurant sales as follows:
|
4 Weeks Ended |
|
13 Weeks Ended |
|
Mar 28, 2016 |
|
Mar 28, 2016 |
Hearthstone |
|
0.3 |
% |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
“I am pleased with the sustained positive trend
we continue to see in sales since November last year, versus our
conservative internal expectations of 1%-2% in 2016. This trend,
along with our sales results to-date in April and the progress we
continue to make flowing those sales through to the bottom-line,
continue to give me confidence in our ability to manage through the
low-point of cash and move towards achieving positive EBITDA in the
second half of the year,” stated RJ Dourney, Così’s President and
CEO. “While we expected the benefit of weather in February in
the Northeast compared to last year, we also experienced
unfavorable weather events this year at the end of January, in
addition to the expected unfavorable impact of the Easter holiday
calendar shift versus last year. Overall, we had a strong quarter,
right in line with our expectations, and we continue to see over
25% of our units with double digit sales growth, and new markets
turning positive in the first quarter versus the same quarter last
year.”
Business Update
The Company also reported the following business
updates through the 2016 Quarter 1:
MarginsThe Company reported continued
improvements in COGS and Labor expenses in the 2016 Quarter 1,
based on preliminary results for the quarter, when compared to the
same quarter last year. The Company will be disclosing the
full final financial results in May at the 2016 Quarter 1 earnings
call.
Miguel Rossy-Donovan, the Company’s CFO, stated,
"We believe we have reached an inflection point with our restaurant
portfolio’s ability to move towards cash generation at a faster
pace, as evidenced by the performance of the portfolio in the
fourth quarter last year, and the preliminary results we are seeing
in the first quarter of 2016. Finance and Operations have been
relentless about training and developing our managers to understand
and manage their restaurants as owners. That, combined with the
additional reinforcement provided by our new manager profit-sharing
plan, is truly making a difference.”
Real Estate OptimizationThe Company announced
the closure of one unit in February 2016, in addition to the two
previously announced closures in January 2016. The Company
also confirmed two additional closures that will occur in the
second quarter of 2016, as well as their expectation to close 4 to
5 other locations in the second half of the year. As previously
announced, the real estate optimization initiative is part of the
Company’s multi-pronged strategy to address underperforming units
with unsustainable economic models.
“We continue to be very disciplined in our
approach to optimizing our real estate portfolio,” said
Rossy-Donnovan. “We are taking steps to ensure there is no
adverse cost impact as we exit underperforming locations, and we
are actively negotiating with landlords and third parties to make
sure we reach the most financially viable solutions. The focus we
have placed on our bottom 50% performers has realized impressive
improvements in some of these units, and for some of these units,
we no longer consider an exit strategy as the right option. Our
approach is very agile, and we have considered this in our cash
flow projections.”
Traffic Building InitiativesThe Company reported
a continued improving trend in traffic in the 2016 first quarter,
which it has attributed to a combination of digital marketing
initiatives in selected markets, improvements in operations
execution, and throughput. The Company also reported the expansion
of its current menu simplification test, which aims to further
support speed as a competitive advantage as well as the overall
guest experience. These initiatives will continue and are
expected to accelerate in the 2016 second quarter.
Other UpdatesThe Company reported that it has
signed a new four-year agreement with Distribution Market Advantage
(DMA), an international distribution organization the Company has
worked with for several years. This agreement provides
continuity for Così’s product distribution throughout North
America, Central America and the Middle East. The terms of
the agreement ensure broad distribution capabilities for Cosi,
ongoing cost savings and cost avoidance opportunities over the span
of the agreement, and alignment with the Company’s franchise system
growth strategy.
About Così, Inc.Così (http://www.getcosi.com)
is an international fast casual restaurant company. At the
heart of every Cosi® restaurant is an open-flame stone-hearth oven
where the Così® signature flatbread is made from scratch throughout
the day. The flatbread is made from a generations-old recipe
and is part of many Così® favorites. Così® was founded on the idea
that good-for-you food should be delicious. Menu items are
made using fresh ingredients and distinctive sauces and spreads to
create edgy flavors. The menu features made-to-order
sandwiches, hand-tossed salads, bowls, breakfast wraps, melts, all
natural soups, signature Squagels®, artisan flatbread pizzas,
S`mores, snacks and desserts. Guests can also enjoy
handcrafted beverages and a variety of coffee-based and specialty
beverages.
Così® employees create a welcoming environment
where guests are invited to relax and enjoy great food. In
many cases, Così® is the cornerstone of the communities that they
are in and take pride in supporting community organizations and
local charities. There are currently 76 Company-owned and 31
franchise restaurants operating in fifteen states, the District of
Columbia, Costa Rica and the United Arab Emirates.
"Così," "(Sun & Moon Design)" and related
marks are registered trademarks of Così, Inc. in the U.S.A. and
certain other countries. Copyright © 2016 Così, Inc. All rights
reserved.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. This press release
contains statements that constitute forward- looking statements
under the federal securities laws. Forward-looking statements are
statements about future events and expectations and not statements
of historical fact. The words "believe," "may," "will," "should,"
"anticipate," "estimate," "expect," "intend," "objective," "seek,"
"plan," "strive," or similar words, or negatives of these words,
identify forward- looking statements. We qualify any
forward-looking statements entirely by these cautionary factors.
Forward-looking statements are based on management's beliefs,
assumptions and expectations of our future economic performance,
taking into account the information currently available to
management. Forward-looking statements involve risks and
uncertainties that may cause our actual results, performance or
financial condition to differ materially from the expectations of
future results, performance or financial condition we express or
imply in any forward-looking statements. Factors that could
contribute to these differences include, but are not limited to:
the results being reported in this release are unaudited and
subject to change; the cost of our principal food products and
supply and delivery shortages and interruptions; labor shortages or
increased labor costs; changes in demographic trends and consumer
tastes and preferences, including changes resulting from concerns
over nutritional or safety aspects of beef, poultry, produce, or
other foods or the effects of food-borne illnesses, such as E.
coli, "mad cow disease" and avian influenza or "bird flu";
competition in our markets, both in our business and in locating
suitable restaurant sites; our operation and execution in new and
existing markets; expansion into new markets including foreign
markets; our ability to attract and retain qualified franchisees
and our franchisees' ability to open restaurants on a timely basis;
our ability to locate suitable restaurant sites in new and existing
markets and negotiate acceptable lease terms; the rate of our
internal growth and our ability to generate increased revenue from
our existing restaurants; our ability to generate positive cash
flow from existing and new restaurants; fluctuations in our
quarterly results due to seasonality; increased government
regulation and our ability to secure required government approvals
and permits; our ability to create customer awareness of our
restaurants in new markets; the reliability of our customer and
market studies; cost effective and timely planning, design and
build out of restaurants; our ability to recruit, train and retain
qualified corporate and restaurant personnel and management; market
saturation due to new restaurant openings; inadequate protection of
our intellectual property; our ability to obtain additional capital
and financing; adverse weather conditions which impact customer
traffic at our restaurants; and adverse economic conditions.
Further information regarding factors that could affect our results
and the statements made herein are included in our filings with the
Securities and Exchange Commission.
Additional information is available on Così's
website athttp://www.getcosi.com in the investor relations
section.
CONTACT:
Miguel Rossy-Donovan
Chief Financial Officer
(857) 415-5020
InvestorRelations@getcosi.com