Just as roasted turkey and bacon will forever be linked as the makings of a turkey club, so too, it seems, the deli franchises Panera Bread (NASDAQ:PNRA) and Cosi (NASDAQ:COSI) have been sandwiched together as a basis of comparison. Much like Coke (NYSE:KO) has its Pepsi (NYSE:PEP), and Home Depot (NYSE:HD) has its Lowe's (NYSE:LOW), the investing world is filled with lightsaber duels that would make even Anakin and Obi-wan envious.
Panera Bread has shown it has the wherewithal to make the yeast grow: Its stock has experienced a relatively consistent run-up to its current price of about $53. With the release of its latest sales figures, Panera shows no signs of slowing down, growing revenues by 37.1% for the first quarter.
Cosi's stock, on the other hand, has been stuck in the single digits since its inception. And after a recent slicing to the tune of roughly 15%, it appears that investors will have to wait for the stock's price to venture into double digits.
While Panera Bread's latest quarterly sales continue its rapid rise, Cosi's latest results show revenues were up 9.2% vs. the same period a year ago. However, its comparable same-store sales showed exceptional strength, moving higher by 9.4% (compared to 5.2% for Panera).
Cosi's cost of goods was higher (up to $6.7 million), but when viewed as a percentage of net sales, it's evident the company is making some improvements. At this time last year, its cost of goods as a percentage of sales was 26%; in its most recent quarter it was 24.5%. Potential investors will want to keep a close eye on the company's administrative expenses, which increased sharply from a year ago by 21.5%. (Administrative expenses remained roughly in line on a percentage-of-revenue basis. We might be a bit more concerned if they moved meaningfully on a percentage basis).
Last year, Cosi lost $6.4 million. During its first quarter of fiscal 2005, it lost $2.8 million. This is a significant improvement, but it's not cutting it for the time being.
Cosi may be on an upward climb, but as the enterprise continues to get sandwiched by its costs, potential investors may want to pass on its stock, and stick to its Wasabi Roast Beef.
If you're looking for more Cosi's to chew on, take a bite out of these:
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.
