Zoe’s Falls Most Since IPO as Second-Quarter Sales Lag Estimates
(Bloomberg) -- Zoe’s Kitchen Inc. fell the most since its 2014 initial public offering after second-quarter sales trailed analysts’ estimates, weighed down by a restaurant-industry slowdown.
While revenue rose 22 percent to $66.3 million, that missed analysts’ $67.2 million average estimate. Second-quarter comparable sales climbed 4 percent, missing the 5.1 percent average projection.
Zoe’s, which touts healthier Mediterranean fare that includes vegan and gluten-free options, is coping with a broader slump at U.S. restaurants. More Americans are opting to cook at home to save money. Fast-food chains also are making a bigger play for consumers’ wallets with steep discounts and meal deals.
“The industry is seeing slower traffic with heavy and prolonged discounting,” Chief Executive Officer Kevin Miles said on a conference call.
Zoe’s now expects same-store sales to grow 4 percent to 5 percent this year. It had previously predicted an increase of as much as 6 percent.
The shares fell as much as 21 percent to $29.51. Plano, Texas-based Zoe’s had gained 33 percent this year through Monday.