Così, Inc. has reported a systemwide same-store sales decline of 12.2 percent for the second quarter ended June 29 as compared to the second quarter of 2008. Company-owned comparable-store sales decreased 12.7 for the quarter while franchised-operated comps dropped 9.8 percent.
Così's total revenues for the 2009 second quarter decreased 13.9 percent to $31.6 million, down from $36.7 million reported in the 2008 second quarter. Company-owned net restaurant sales, excluding discontinued operations, declined 14.3 percent in the quarter to $31 million compared to $36 million reported in the previous year's quarter. Franchise fees and royalty revenues for the quarter contributed $621,000, compared to $516,200 in the 2008 second quarter.
Net loss for the second quarter came in at just under $1 million at $969,000, or 2 cents per basic and diluted common share, compared with a net loss of $1.7 million, or 4 cents per basic and diluted common share, for the 2008 second quarter.
"The impact of the recession on consumer and business spending has created a difficult environment for Così, especially in our catering business given our high density of locations in major metropolitan business areas," said James Hyatt, Così's president and CEO, in the company's earnings release. "We remain intensely focused on working collaboratively with our franchise partners to drive sales and improve operating margins, while remaining diligent about controlling administrative costs."
Contributing to Così's sales decrease was the impact of closing five locations since the end of the 2008 second quarter. The company-owned comps decline of 12.7 percent, which was comprised of a 9.8 percent decrease in traffic and a 2.9 percent average check decrease, was impacted by a 27.5 percent decrease in overall catering sales during the second quarter.
Così also reported that as of June 29 it had cash and cash equivalents of $5,184,000 and virtually no debt other than lease obligations.
Business Update
Così stated that despite the recession, it remains focused on improving the guest experience while continuing to provide fresh and innovative product offerings.
Così recently launched a steak gorgonzola sandwich and a steak salad as well as a limited-time lobster salad sandwich and melt offering. Early indications are that these value-driven menu items are being well received by guests.
Così also reported that it has retained a new advertising agency to broaden and enhance its initiatives to increase traffic and sales while continuing to expand awareness of the brand.
Così finished the 2009 second quarter with 144 locations, consisting of 98 company-owned and 46 franchised units. During the 2009 second quarter, one franchise location was opened in the District of Columbia and four franchise locations were closed during the quarter including one in Minnesota that was re-opened as a company-owned location.
Investor Teleconference
Così has temporarily suspended its quarterly investor conference call. Management has continued to focus all of its efforts on creating shareholder value by driving revenue growth, improvements in operating margin and continued reductions in general and administrative expenses while also supporting the continued long-term growth of the franchise system.
