Fast-casual operator releases preliminary quarterly report
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Zoe’s Kitchen Inc. expects another quarter of robust same-store sales, the Plano, Texas-based fast-casual operator said in a preliminary report Tuesday.
For the third quarter ended Oct. 6, the company expects same-store sales to range between an increase of 5.7 percent and 5.9 percent. For the 40 weeks to that date, the company expects same-store sales to range between an increase of 6.2 percent and 6.3 percent. Zoe’s will report its full third-quarter results on Oct. 20.
Zoe’s operated 120 units and franchised an additional six locations as of the end of the quarter, the company said.
Zoe’s estimated total revenue of between $43.3 million and $43.5 million for the quarter, and between $131.5 million and $131.7 million for the 40 weeks ending Oct. 6. It said income from operations would be between $600,000 and $800,000 for the 12 weeks, but for the 40 weeks would be a loss of between $3.8 million and $4 million.
For the fiscal year, ending Dec. 29, Zoe’s said it expected sales of between $169 million and $171 million, royalty and franchise fees of around $450,000 and same-store sales growth of between 6 percent and 6.3 percent. A total of 30 or 31 company-owned restaurants would have been opened in the fiscal year, excluding the acquisition of the franchised locations, the company said.
In a research note, Piper Jaffray & Co. hailed the news: “We believe the combination of this transaction, the stronger-than-expected preliminary 3Q14 results, as well as updated guidance for FY14 which is above current consensus expectations could move market expectations higher.”
Piper Jaffray attributed most of the increase in same-store sales growth to higher traffic and improved sales mix, rather than price increases.
“Longer-term, we expect same-store sales gains will remain sustainably in the [positive lower single digit] range and be traffic-driven, while unit growth should be in the double-digit range,” resulting in steady earnings growth of 25 percent or more, it added.
Zoe’s also said it had purchased three Zoës Kitchen locations in Louisiana from a franchisee for approximately $8 million in cash, as well as two units under construction and the rights for further development in the state.
Contact Bret Thorn at [email protected].
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