Zoe's Kitchen Shares Drop on Lower Than Expected Revenue Numbers
Ticker.tv News | Aug 23, 2016 08:58AM ET
Zoe's Kitchen Inc (NYSE:ZOES)
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Zoe’s Kitchen, Inc. (ZOES), a chain of fast casual restaurants yesterday reported their second quarter 2016 financial results. Zoe’s reported second quarter earnings of $0.06 per share which was inline with analyst expectations. The company reported second quarter revenues of $66.3 million which fell short of analyst expectations of $67.2 million. Zoe’s also lowered their revenues outlook and is now expecting to be in between $277 to $280 million down from previous projections of $277 to $281 million.
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“We’re pleased to have delivered strong second quarter financial results that included a 22% increase in total revenue and our 26th consecutive quarter of positive comparable restaurant sales growth,” said Kevin Miles, President and CEO of Zoës Kitchen. “Furthermore, our topline results and operational execution enabled us to deliver strong profit growth with a 20% increase in adjusted EBITDA. We believe the consistency of our results reflects the success of our long term strategic focus and we remain confident in our potential to operate over 1600 units in the US.” Miles added, “We continue to execute on our development plans, opening nine new Zoës Kitchen locations during the second quarter and have since added another five locations in the third quarter. With 25 new locations opened year-to-date, we are on track to open 35 to 36 restaurants in 2016. Our increased footprint and growing brand presence continue to establish Zoës Kitchen as the leader in Mediterranean.” Business Wire
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ZOES opened trading yesterday at $36.98 which was up from the previous days trading of $36.85. ZOES closed trading yesterday at $37.25 and crashed down after market to $31.10, equivalent to a 17% decrease from the closing price. Taking a look at the daily chart we can see the last time ZOES traded below these levels we have to go back to February 25th when it traded at highs of $29.31. Taking a closer look at the daily chart we can see that ZOES has been in an overall decline dating back to May 10th when it traded at $39.70. ZOES has a float of 19.02 million shares and traded 3.53 times the normal daily trading volume on Monday. For trading purposes, I would like to see ZOES open trading on Tuesday below $33.25 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.25 from my entry position fearing anything more than that and the stock would start to fill in the gap down.
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Zoe’s Kitchen, Inc., incorporated on October 24, 2007, is a fast-casual restaurant concept serving a distinct menu of Mediterranean-inspired dishes delivered with Southern hospitality. The Company has approximately 170 restaurants across over 20 states, including approximately three franchised locations. The Company’s menu offers meals made from scratch using produce, proteins and other ingredients that are predominantly preservative and additive-free, including its appetizers, soups, salads and kabobs. The Company’s menu offers fresh fruits, vegetables and herbs, grains, olive oil and lean proteins.
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The Company’s menu ranges from its hummus varieties, made fresh daily and served with warm pita bread, to its salads and kabobs. The Company offers its customers various items, such as its chicken, steak and salmon kabobs, and chicken and spinach roll-ups (tortillas stuffed with feta cheese, grilled chicken, sundried tomatoes and spinach), each of which is served with a choice of a side item, such as braised rosemary white beans, rice pilaf, pasta salad, roasted vegetables or seasonal fruit. Its Mediterranean Quinoa Salad has quinoa combined with broccoli, tomatoes, onions and feta cheese. The Company caters to a range of dietary needs by offering vegetarian, vegan, gluten-free and its calorie conscious Simply 500 menu selections. The Company’s catering and home meal replacement alternatives include its Zoes Fresh Take grab-and-go coolers and its Mediterranean Family Meals options. The Company also serves beer and wine in its restaurants.
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