Zoe's Kitchen shares tank after company's quarterly miss, outlook cut

Shares of Zoe's Kitchen Inc. ZOES, -2.89%plunged 20% late Thursday after the fast-casual restaurant chain posted a larger-than-expected first-quarter loss, missed quarterly sales expectations, and cut its outlook for 2018. Zoe's Kitchen said it lost $3.6 million, or 19 cents a share, in the quarter, versus earnings of $19,000, breaking even on a per-share basis, in the year-ago period.

Revenue rose 13% to $102.1 million, the company said. Analysts polled by FactSet had expected a loss of one penny per share on sales of $104.7 million for the quarter. Zoe's blamed its 2.3% same-restaurant sales decrease on weather and calendar shifts as well as less dine-in traffic. The analysts surveyed by FactSet had expected a 0.5% increase in same-restaurant sales. Zoe's also downgraded its outlook for 2018, saying it expects revenue between $345 million and $352 million, down from previous expectations of revenue between $358 million to $368 million, and same-restaurant sales down 2% to 4%, versus expectations of same-restaurant sales flat to 2% higher for the year. Shares of Zoe's Kitchen ended the regular trading day down 2.9%. "While we are encouraged by results coming from investments in digital, delivery, and menu innovation, it is imperative that we take aggressive actions to re-focus our efforts on building sales and improving financial performance," Chief Executive Kevin Miles said. "To do so, we will slow our future new unit growth and conduct a thorough review of under-performing restaurants. Additionally, we are taking steps to reduce our G&A infrastructure and will re-allocate resources towards marketing and technology initiatives to drive sales," he said in a statement.