News

Zoe's Kitchen hits 27 straight quarters sales growth

November 15, 2016

Zoe's Kitchen, Inc. reported some encouraging third-quarter results today, including news that the brand just wrapped up its 27th consecutive quarter of same-store sales growth and has managed to double its system-wide size in just three years. The company also adjusted its outlook for fiscal year 2016.

Q3 highlights, for the period ending Oct. 5, include: 

• 19.4 percent increase in total revenue to $67.3 million.
• 2.4 percent increase in comparable restaurant sales.
• 5.9 percent increase in restaurant contribution to $12.9 million or 19.1 percent of sales. 
• 7.9 percent increase in adjusted EBITDA to $6.6 million. 
• 11 new company-owned stores opened. 
• $0.3 million net loss ($0.02 per basic and diluted share) compared to $2.3 million net loss ($0.12 per basic and diluted share). 2016 Q3 net loss included $1.5 million for income taxes while 2015 Q3 net loss included $3.1 million for income taxes, $0.3 million executive transition costs and $0.4 million hurricane-related loss. 
• $0.7 million or $0.04 per diluted share for adjusted net income compared to adjusted net income of $0.9 million or $0.05 per diluted share.

Highlights for 2016 fiscal year so far: 

• 23.1 percent total revenue growth to $214.0 million.
• 4.9 percent comparable restaurant sales increase. 
• Opened 36 new company-owned restaurants.  
• 20 percent increase in restaurant contribution to $44.9 million.
• $2.3 million in net income ($0.12 per basic share and diluted share) compared to $1.4 million net loss ($0.07 per basic and diluted share).
• $3.0 million in adjusted net income ($0.16 per diluted share) compared to adjusted net income of $2.5 million ($0.13 per diluted share).

"We are pleased to report third quarter results that included our 27th consecutive quarter of positive same store sales growth, while successfully lapping a two-year stacked same store sales comparison over 10 percent," said President and CEO Kevin Miles in a news release. 

"Our focus remains on building upon our leadership position as a Mediterranean inspired lifestyle brand driven by our people first culture. With that in mind, we are well positioned to double our store count again by the end of 2020. We are confident that this restaurant growth coupled with strong unit economics will result in significant EPS growth."

FY 2016 outlook

For the fiscal year ending Dec. 26, the company is updating its outlook and currently expects the following:

• Total revenue between $276.0 million and $277.0 million (previously $277.0 million and $280.0 million).
• Comparable restaurant sales growth of 4.0 to 4.5 percent (previously 4.0 to 5.0 percent).
• 37 to 38 company-owned restaurant openings (previously 35 to 36).
• Restaurant contribution margin between 20.0 and 20.3 percent (previously 20.5 and 20.8 percent).
• General and administrative expenses of approximately 11.0 percent, inclusive of $2.2 million of non-cash equity based compensation expense (previously 11.5 to 11.7 percent).