Here Are A Few Things To Know About Cosi Inc. (NASDAQ: COSI) Following 2Q Report

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Cosi Inc (NASDAQ: COSI) did report some improvements in 2Q2016 financial results compared to the same quarter last year. But the management also took the opportunity to provide some highlights that can provide clue about what to expect in the future. Some of these highlights are worth revisiting.

2Q2016 earnings results

In 2Q2016, Cosi Inc. (NASDAQ: COSI) posted EPS loss of $0.07, which improved from EPS loss of $0.08 in the like quarter a year ago. Revenue for the quarter came in at $22.8 million, indicating a 7% decline from the same period last year.

What are the areas of focus for Cosi Inc. (NASDAQ: COSI)?

To produce the kind of results obtained in 2Q, the management of COSI had to focus on certain key areas. CEO RJ Dourney said that they areas they focused on in the quarter to try and beat the harsh external business environment included driving trial, increasing guest satisfaction and guest frequency and improving sales.

It seems COSI is betting that continued focus on these areas will continue to drive financial performance improvement.

How did franchise and company-owned stores impact topline?

Cosi Inc. (NASDAQ: COSI) reported that net sales at stores that it owns directly pulled back 4.1% with the impact coming from stores that were closed between the latest quarter and the year-ago quarter. But revenue from franchise fees and royalties rose 16.8%, supported by three franchise locations that were opened.

Overall, same-store net sales declined 4.5%, weighed down by weak company-owned restaurant sales. But COSI said that Hearthstone same-store sales rose 2.1% YoY.

Battling of costs

Cosi Inc. (NASDAQ: COSI) is gradually winning war against runaway expenses. The company reported that expenses related to cost of food and beverage declined 1.1% and those related to labor and benefits fell 0.9%. Occupancy and general and administrative expenses also declined compared to the same period last year.

When is COSI turning positive cash flow?

Though the management is making efforts to grow revenue and cut expenses, CEO Dourney said that it still won’t be possible for Cosi Inc. (NASDAQ: COSI) to turn positive cash flow in the current quarter. But the CEO didn’t guide cash flow for the coming quarter.

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