Zoe’s Kitchen, Inc.’s third-quarter fiscal 2017 results were affected by the recent hurricanes — Harvey and Irma.
Adjusted earnings of a penny in the quarter bettered the Zacks Consensus Estimate of break-even earnings. However, earnings deteriorated 75% from the year-ago figure of 4 cents owing to the impact of hurricanes and lower restaurant contribution margin. The hurricanes particularly impacted earnings by 2 cents.
Revenues of $77.9 million lagged the consensus mark of $78.6 million by 1% but improved 15.7% year over year backed by restaurant openings. In fact, Zoe’s Kitchen opened 11 company-owned restaurants in the quarter and expects to open another 38 to 40 this year.
However, due to the natural disasters, this fast-casual restaurant chain lost 187 full and partial operating days leading up to roughly $1.1 million of revenue loss.
Zoe's Kitchen, Inc. Price, Consensus and EPS Surprise
Behind the Headline Numbers
Comparable restaurant sales declined 0.5% owing to a 2.3% decrease in transactions and product mix, offset by a 1.8% increase in price. Notably, hurricanes had an estimated 0.9% negative impact on comps.
Consequently, the figure compared unfavorably with the year-ago quarter’s comps growth of 2.4%. However, it compared favorably with the prior-quarter’s comps decline of 3.8%.
Restaurant contribution margin went down 30 basis points (bps) year over year to 18.8% as increased labor and operating expenses offset the improvement in cost of goods.
2017 Fiscal Outlook Cut
For fiscal 2017, the company expects total revenues of $314.0 million to $316.0 million (earlier $314-$322 million).
Meanwhile, management projects comps in the range of negative 2% to 2.5% (earlier flat to negative 3%).
Further, the company predicts restaurant contribution margin in the band of 18.3% to 18.5%, as compared with the previous range of 18.3% to 19.0%.
We note that Zoe’s Kitchen currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) third-quarter 2017 adjusted earnings of $1.33 lagged the Zacks Consensus Estimate of $1.56 by 14.7%.
Darden Restaurants, Inc.’s (DRI - Free Report) first-quarter fiscal 2018 adjusted earnings of 99 cents per share outpaced the Zacks Consensus Estimate of 98 cents by more than 1%. Further, the bottom line rose 12.5% year over year on the back of higher revenues.
Restaurant Brands International, Inc.’s (QSR - Free Report) third-quarter 2017 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate of 49 cents by 18.4%. The figure also improved 34.9% from the prior-year quarter on higher revenues, partly offset by higher expenses.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Zoe’s Kitchen, Inc.’s third-quarter fiscal 2017 results were affected by the recent hurricanes — Harvey and Irma.
Adjusted earnings of a penny in the quarter bettered the Zacks Consensus Estimate of break-even earnings. However, earnings deteriorated 75% from the year-ago figure of 4 cents owing to the impact of hurricanes and lower restaurant contribution margin. The hurricanes particularly impacted earnings by 2 cents.
Revenues of $77.9 million lagged the consensus mark of $78.6 million by 1% but improved 15.7% year over year backed by restaurant openings. In fact, Zoe’s Kitchen opened 11 company-owned restaurants in the quarter and expects to open another 38 to 40 this year.
However, due to the natural disasters, this fast-casual restaurant chain lost 187 full and partial operating days leading up to roughly $1.1 million of revenue loss.
Zoe's Kitchen, Inc. Price, Consensus and EPS Surprise
Behind the Headline Numbers
Comparable restaurant sales declined 0.5% owing to a 2.3% decrease in transactions and product mix, offset by a 1.8% increase in price. Notably, hurricanes had an estimated 0.9% negative impact on comps.
Consequently, the figure compared unfavorably with the year-ago quarter’s comps growth of 2.4%. However, it compared favorably with the prior-quarter’s comps decline of 3.8%.
Restaurant contribution margin went down 30 basis points (bps) year over year to 18.8% as increased labor and operating expenses offset the improvement in cost of goods.
2017 Fiscal Outlook Cut
For fiscal 2017, the company expects total revenues of $314.0 million to $316.0 million (earlier $314-$322 million).
Meanwhile, management projects comps in the range of negative 2% to 2.5% (earlier flat to negative 3%).
Further, the company predicts restaurant contribution margin in the band of 18.3% to 18.5%, as compared with the previous range of 18.3% to 19.0%.
We note that Zoe’s Kitchen currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Chipotle Mexican Grill, Inc.’s (CMG - Free Report) third-quarter 2017 adjusted earnings of $1.33 lagged the Zacks Consensus Estimate of $1.56 by 14.7%.
Darden Restaurants, Inc.’s (DRI - Free Report) first-quarter fiscal 2018 adjusted earnings of 99 cents per share outpaced the Zacks Consensus Estimate of 98 cents by more than 1%. Further, the bottom line rose 12.5% year over year on the back of higher revenues.
Restaurant Brands International, Inc.’s (QSR - Free Report) third-quarter 2017 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate of 49 cents by 18.4%. The figure also improved 34.9% from the prior-year quarter on higher revenues, partly offset by higher expenses.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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