Così, Inc. (NASDAQ:COSI), the fast casual restaurant company, today
reported that estimated system-wide comparable restaurant sales for
the 2016 Period 6 and 2016 Quarter 2, as measured for restaurants
in operation for more than 15 consecutive months as Company-owned
or franchised, recorded an aggregate decrease of 4.5% and 1.6%
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 6 and 2016 Quarter 2 are as follows:
|
|
4 Weeks Ended |
|
13 Weeks Ended |
|
|
June 27, 2016 |
|
June 27, 2016 |
Company-Owned |
|
|
-6.6 |
% |
|
|
-4.1 |
% |
Franchised |
|
|
0.4 |
% |
|
|
3.6 |
% |
System-Wide |
|
|
-4.5 |
% |
|
|
-1.6 |
% |
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 6 and 2016 Quarter 2, the
Hearthstone locations recorded an aggregate increase in comparable
restaurant sales as follows:
|
|
4 Weeks Ended |
|
13 Weeks Ended |
|
|
June 27, 2016 |
|
June 27, 2016 |
Hearthstone |
|
|
1.9 |
% |
|
|
2.1 |
% |
Business Update
“It is important to start with this; the
magnitude of the second quarter’s comparative sales decline
requires management to revise previously communicated guidance. The
Company will not reach positive adjusted EBITDA in the 2016 third
quarter. The future timing of positive adjusted EBITDA is tied
directly to our ability to generate revenue growth,” stated RJ
Dourney, President & CEO of Cosi.
“The comparative sales Cosi generated in P6 does
not come close to meeting my expectations and is being addressed
with intensity,” said Dourney. “Management has implemented a
disciplined and multi-faceted plan to move Cosi to a strong revenue
growth position. The key areas of focus are outlined below,”
Dourney went on to say.
Dourney went on to address the strength of the
organization’s foundation, “The management team continues to
generate sustained improvements in unit level economics with the
appropriate G&A deployment. The team continues to leverage the
successful model of our Hearthstone restaurants with discipline and
accountability. In addition, the profit-sharing plan launched at
the beginning of the year continues to drive the motivation and
relentlessness of our restaurant managers. Similarly, we see this
sustained positive trajectory in our franchise system, where we
continue to see positive results in both sales and profitability.
Finally, our focus on our people and their development is
fundamental to our perseverance and is an asset to the
organization.”
2016 3rd Quarter
Initiatives
With regards to the organization’s initiatives
to address traffic and sales trends, Dourney shared, “We have
launched, and continue to expand, specific initiatives to
strengthen guest satisfaction, guest frequency, and trial.”
The Company expects to reverse the quarter’s
sales trend through the following initiatives:
Guest satisfaction
Management has tested, and is deploying, a
real-time guest satisfaction measurement tool. The results to date
highlight the strong correlation between guest satisfaction and
traffic increases, and provides clear and actionable information to
leverage the strengths, and improve the opportunities, of the
system.
Menu reduction
Now deployed in over 50% of the Company-owned
units, this new menu provides faster service, makes it easier for
the guest to experience Cosi, and improves employee
efficiencies. The company expects to have fully implemented
the system-wide roll-out by August 30th.
Digital campaign
Having now tested multiple digital campaigns
with encouraging results, Cosi is expanding multi-faceted digital
campaigns focused on both driving trial of new guests and
increasing the frequency of our regulars.
“Each of these initiatives will support both our
Company-owned and franchise units. Our commitment to our
franchisees’ profitability and success is intense, and we are
committed to their success. Building Cosi through franchising
is our long-term strategy. Management will further expand on the
quarter’s results during the upcoming second quarter earnings call
on August 11th,” Dourney concluded.
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 74 Company-owned and 30
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.
Miguel Rossy-DonovanChief Financial Officer(857) 415-5020
CONTACT:
InvestorRelations@getcosi.com