Same-store sales at Freshii Inc., the Canadian-based fast-casual brand, increased 6.4 percent in the fourth quarter ended Dec. 31, the company said in preliminary results released Wednesday.
The preliminary results exceeded analysts’ fourth-quarter same-store-sales estimates of about 5 percent. Freshii stock at midday Thursday was trading about 0.4 percent lower from Wednesday’s close of CA$7.57 a share.
Since going public a year ago on the Canadian exchange, Toronto-based Freshii’s stock price has swung widely, with a 52-week range of CA$5.28 to CA$15.09 a share.
Freshii in November had offered an outlook of “approximately 5 percent” same-store sales growth for the full 2017 fiscal year. Freshii is scheduled to release fourth-quarter earnings on Feb. 22.
“As a result of our strong fourth-quarter performance,” said Matthew Corrin, Freshii CEO and chairman, in a statement, “we were able to exceed our recently increased same-store sales growth outlook and grow same-store sales 5.5 percent for the full year.
The 370-unit brand opened 25 net new stores in the fourth quarter, the company said, but development over the past year has seen quarterly swings.
Net new openings zeroed out in the third quarter ended Sept. 24 when Freshii announced Target Corp.’s closure of 18 in-store units, 17 of which were in the quarter.
Freshii’s fourth-quarter sales forecast was lower than what analysts had expected.
“Pre-announced system sales of $37.4 million fell short of our modeled $42.1 million, so we await more detail on new unit economics/store mix on the upcoming earnings call,” said analyst Andy Barish of Jefferies LLC in a note Wednesday.
Barish said the system sales results raised questions about average unit volumes “during the seasonally slower” fourth quarter. Barish said Freshii targets AUVs of $520,000, “though the most recent cohorts have seen slightly slower starts but quicker ramp ups.”
Earlier this month, Freshii issued an open letter to Milford, Conn.-based Subway, urging the 44,000-unit sandwich chain to allow franchisees to convert to its brand. Subway, owned by Doctor’s Associates Inc., has been facing franchisee unrest over promotions like the $4.99 foot long and store profitability.
Freshii, founded in 2005, has three company-owned units and the remainder are franchised.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless