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COSI Earnings Calls Notes

Q2 2015 Earnings Call August 13, 2015:

  • turnaround strategy at Cosi is on course and part of the key to this process has been the refresh initiative.

  • we are meeting or beating our expectations.

  • we are cash flow positive at the unit level.

  • We expected to see a 10% lift in comp store sales as a result of the refreshes, and we have. Now, we expect and we need to see a 40% flowthrough on those incremental sales, and we are seeing that flow-through.

  • we needed to be able to refresh a unit for between $20,000 and $150,000 and we are right on target.

  • So, we've now refreshed six units. We have seven that are currently in process and we have another 10 to 20 that will be done by year's end. All 55 that we are scheduled to complete will be done by first quarter of 2016.

  • we have enough cash on the balance sheet to do what we have planned

  • in 2016 our franchise growth will accelerate. We will get into double digits. The second is, come September we are going to start talking about how big this could become.

Q1 2015 Earnings Call May 14, 2015:

  • No current plans to raise additional funds

  • COGS & Labor Costs: Q1 was painful, it’s behind us.  I am very happy with the corrective trend line that we are seeing in Q2

  • Where we have deployed our refreshes, where we are operating at a high level, we are seeing double-digit comp store sales.

  • We have markets that are running behind.  These markets will turn.

  • “world-class” coffee.

  • Where we have deployed two of the three components to a refresh, we are seeing double-digit comp store sales.

  • We will open 1 corporate & seven franchise restaurants this year.

  • In September, we will lay out our franchise growth strategy.

  • When asked about first unveiling a flagship refreshed store, answer was June 1.

  • Entire system (55 stores) will be done by 1Q ‘16.

  • On course for cash flow breakeven by December 2015.

  • Come June: a series of coffee initiatives.

  • I’m excited with what I see.  I’m probably more excited today than I was a year ago.

Q4 2014: March 26, 2015:

  • Focus on cleaning up the brand, bringing clarity & establishing who we are.

  • Decrease menu by 25% while retaining 99% of our transactions.

  • Price increase in test restaurants with zero pushback.

  • New menu launch to deploy in 2Q.

  • Refreshes are underway

    • Image (facelift)

    • Speed (ease guest use) through technology

    • Reintroduce brand

  • by Q4: self-service kiosks begin to deploy.

  • Deploy cost control for COGS and labor

  • Cash flow positive by year end 2015.

Q3 2014: November 13, 2014:

  • Period 10 [October]: first time Cosi has achieved positive comparable sales in over two years

  • So the 10 critical points have been deployed and we've seen tremendous traffic increases as a result of that

  • engaged David Montrose to develop 10 Cosis in Miami

  • Our catering business is lighting it up. I am very excited by the results we're seeing in our catering business in fourth quarter and we have something up our sleeve for 2015 that's going to be a game changer for what we all refer to as catering.

  • We see fourth quarter of 2015 coming in at about 10% to 12% store level cash flow.

  • As a total for the year, we have projected $2 million for the refreshes.

Q2 2014: August 14, 2014:

  • The senior team is in place.

  • While we are seeing multiple markets where we are seeing significant increases in comps, we haven't seen it everywhere.

  • we are seeing significant comp gains with the markets where we have what I will call early-adapters.

  • There are four key strategic initiatives that are in play right now.

    • The first is the continued deployment of that operating system.

    • The second is that we are right-sizing our menu.

    • The third area is physical plant root.

    • The fourth is a marketing strategy that we have had in test now for 60 days, that we are seeing significant gains where we have tested. That will continue to deploy, specifically in our suburban restaurants as the year continues.

Q1 2014: May 15, 2014:

  • We have also experienced sharp sales declines in three locations in the Philadelphia market where we tested various operational and menu initiatives.

  • you are going to watch a very talented team come together and take an aggressive position to move this forward. We are not going to sit back, take it slow, and see if we can slowly move this forward. This team is very focused on taking an aggressive position to correct the past trends.

  • merchandising focus where we have increased the number of items that we sell per location, we've increased the number of SKUs that we sell at the unit level, and we are seeing a sizable uptick in comp store sales where that initiative has been fully embraced.

  • making technology a competitive advantage. You are going to see that happen over the next 12 months.

  • We have a refresh project that will launch within 30 days. We'll have our first location up and running with this refresh in Manhattan

we'll be fine as we move through the balance of the year to be able to execute our plan, given the capital we have.


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