Zoe’s Kitchen (ZOES) Stock Gains on Earnings Beat

Zoe’s Kitchen (ZOES) stock is increasing after the company reported financial results that exceeded estimates for the fiscal 2015 third quarter.
By Amanda Gomez ,

NEW YORK (TheStreet) -- Zoe's Kitchen (ZOES) stock is advancing 2.95% to $32.82 on heavy trading volume on Friday afternoon following better than expected fiscal 2015 third quarter financial results.

After the market close on Thursday, the company posted earnings of 5 cents per share on $56.38 million in revenue for the quarter ended October 5.

Analysts surveyed by Thomson Reuters had estimated earnings of 3 cents per share on $55.66 million in revenue.

"We are proud of our third quarter results, including 29% total revenue growth [and] 4.5% comparable restaurant sales growth, which marks the 23rd consecutive quarter of positive comparable restaurant sales growth," CEO Kevin Miles said in a statement.

Comparable restaurant sales growth was driven by a 4.6% increase in product mix and a 0.3% rise in prices that offset a 0.4% decline in traffic.

Additionally, Zoe's updated its 2015 fiscal year restaurant sales guidance to $222 million to $224 million, from the previous guidance of $220 million to $224 million.

Annual comparable restaurant sales growth is expected to be between 5.5% and 6%, up from the previous range of 5% to 6%.

Zoe's Kitchen owns and operates 162 Mediterranean fast-casual restaurants, and collects fees from three franchised locations.

So far today, 1.61 million shares of Zoe's Kitchen have exchanged hands, compared with its average daily volume of 459,722 shares.

Separately, TheStreet Ratings team rates ZOE'S KITCHEN INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate ZOE'S KITCHEN INC (ZOES) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and weak operating cash flow.

You can view the full analysis from the report here: ZOES

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