Zoe’s Kitchen Inc. is slowing its unit-growth plans for 2018, the company said in releasing its third-quarter earnings Thursday.
“Looking beyond 2017, we have adjusted our 2018 new restaurant plans down to 25,” said Kevin Miles, Zoe’s CEO, in a statement.
For fiscal 2017, which ends Dec. 25, the Dallas-based, Mediterranean fast-casual company said it was on target to complete 38 to 40 new company-owned restaurants.
“We believe the reduced growth rate in 2018 will allow us to better manage our cash flows, focus on our sales driving initiatives and continue to explore new ways to strengthen our business over the long-term in order to increase shareholder value,” Miles said.
For the third quarter ended Oct. 2, Zoe’s swung to a profit of $270,000, or 1 cent a share, from a loss of $293,000, or 2 cents a share, in the year-ago period. Revenue rose 15.7 percent to $77.9 million from $67.3 million in the same quarter a year ago.
Zoe’s third-quarter same-store sales slipped 0.5 percent, including a 0.9 percent negative sales impact from Hurricane Harvey in Texas and Hurricane Irma in Florida and the Southeast that affected “a significant portion” of the company’s store base.
“In total, the storms affected approximately one-third of our restaurant base, resulting in an estimated $1.1 million in lost sales,” Miles said.
“Despite the challenges that these disasters presented, I could not be more proud of the leadership exhibited by our teams,” he said. “Their commitment to care for our guests, restaurants and fellow team members was inspiring.”
Miles added that the company remained “focused on executing our initiatives as we continue to navigate a challenging environment.”
Zoe’s, founded in 1995, has 240 restaurants in 20 states.
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