Shares of Zoe's Kitchen Inc. (ZOES, Financial) plummeted more than 40% on Friday after reporting a first-quarter loss of 13 cents per share on $102.03 million in revenue on Thursday. The company fell short of revenue expectations by $3.18million and earnings estimates by 13 cents.
The company posted a net loss of $3.6 million, or 19 cents per share, compared to net income of $19,000 in the year-ago quarter. It registered an adjusted net loss of $2.6 million, or 13 cents per diluted share, compared to adjusted net income of $0.3 million, or one cent per diluted share, in the prior-year quarter. Adjusted earnings before interest, taxes, depreciation and amortization decreased 30.9% to $5.6 million.
“Our results in the first quarter were challenged as comparable restaurant sales declined 2.3%," President and CEO Kevin Miles said. "Weather and calendar shifts aside, trends softened sequentially from the fourth quarter of 2017 primarily due to decelerating dine-in traffic. Early results in the second quarter have not shown significant improvement, necessitating a downward revision to our annual guidance.”
Looking ahead, the company revised its guidance for the fiscal year. It now expects revenue between $345 million and $352 million (down from $358 million to $368 million); comparable restaurant sales of negative 2% to negative 4% (revised from flat to 2%). It also projects a restaurant contribution margin between 16% and 17% (down from 17.3% to 18.4%).
Moreover, the company opened 11 new restaurants, totaling 251 company-owned restaurants and three franchised restaurants. As of May 24, the company has opened four additional restaurants, bringing the total to 258. It plans to open 25 more company-owned locations throughout the year.Â
Disclosure: The author holds no positions in any stocks mentioned.
