Cosi’s New Menu and Operating Procedures Get Attention

Stephen L Kanaval |

Steakhouse gorgonzola, pork-belly banh-mi, KING ME, YAHTZEE!

If you’ve looked at Cosi’s (COSI) new menu recently, I think you would have an idea of why the Boston-based fast-casual company’s recent growth shows potential. Over the last year, Cosi took all the additives out of its salad dressings, introduced an oven-roasted tofu for vegan customers, and a brand new rich coffee. The company basically had a roasting completion to determine whose coffee would be the better fit for the brand. Coffee Bean International won this roasting challenge and the company has gotten the word about by giving out free coffee on Wednesday mornings.

Its CEO R.J. Dourney has spent considerable time improving the most important product: the food. “The focus of cleaning up our food, making sure that we are clear with our guest that we put a tremendous product on the plate, is absolutely critical,” Mr. Dourney said in a conference call last year. Since then, the company has been posting strong growth, with the most recent earnings report showing quarterly YoY revenue growth of 22.40%, and is an interesting pick for a nice risk-reward stock.

Cosi has worked to refresh the aesthetics of each restaurant and improve operating procedures. Cost-cutting and closing unprofitable locations will certainly allow bolster the small growth that the company has shown so far. The recently hired CFO Miguel Rossy-Donovan is well versed in cost-cutting and accelerating growth uphill coming most recently from Teach for America. Remember, this is a new management team that understands that the food and service will sustain profits. Most importantly, they are up for the challenge of turning the company around. They hired new executive chef Phillip Kafka who created the banh-mi sandwich and a chicken noodle soup with kale that is getting rave reviews. Kafka and Dourney have already tested 250 new items and only sent 18 to focus groups. The filter is on HIGH.

The company is dedicated to putting forward quality, healthy meals. “Our customers see us as a concept with food-forward menu items,” Vice President Joyce Lee said. “We have a very good idea of who are customer is.” The company also has going for it that fast-casual dining is very popular right now. The future for these restaurants trends high in recent studies and reports.

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Companies

Symbol Name Price Change % Volume
COSI Cosi Inc. n/a n/a n/a n/a

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