Is the Worst Over for Zoe’s Kitchen?

Is the Worst Over for Zoe’s Kitchen?

With a concentration of restaurants in the south, Zoe's Kitchen's (NYSE: ZOES) third quarter was hit hard by Hurricanes Harvey and Irma -- reducing revenue by $1.1 million and contributing to a 0.5% decline in comparable-restaurant sales. Despite the unattractive headline numbers, there are several signs that comps could be on the verge of a recovery.

Here are three reasons to believe that this fast-casual Mediterranean restaurant chain may finally be turning around.

Zoe's 0.5% comps decrease broke down into a 2.3% decrease in traffic and a 1.8% increase in the average ticket size. Even with hurricanes affecting about one-third of Zoe's stores, the company easily outperformed restaurant industry averages, which included a 2.2% comps decrease and a 4% fall in traffic. According to Black Box Intelligence, that marked the second worst quarter for restaurants in over five years. In that context, I find Zoe's results impressive, especially given that its comps results had recently been underperforming these industry averages.

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Source: Fool.com