Jefferies Remains Sidelined on Zoe's Kitchen, Inc. (ZOES) Following 2Q
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Jefferies reiterated a Hold rating and $33.00 price target on Zoe's Kitchen (NYSE: ZOES) following the company's 2Q earnings report. The company's EPS and EBITDA upside came from 160 bps reduction in COGs with deflation, led by chicken.
Analyst Andy Barish commented, "EPS in line with Street and above our low-end estimate, but sss in line with us at +4% and below Street of +5%. Slower industry traffic appears to be impacting sss and 2H sss guidance is an implied 2-4%, with 3% price in place, which means flat-to-negative traffic. Even very strong positioned brands like ZOES facing competition with fast-casual unit proliferation. We tweak ests, maintain $33 PT, Hold rating and stock expected to react negatively to slowing sss."
Shares of Zoe's Kitchen closed at $37.25 yesterday.
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