Fresh Choice has reported net income of US$1.1m (US$0.16/share) for fiscal year 2001, down from US$1.67m (US$0.24/share) in 2000.
Go deeper with GlobalData
For the Q4, the company reported a net loss of US$907,000 (US$0.15/share), including store-closure and asset-impairment expenses of US$181,000 and restaurant-opening costs of US$206,000. This compared to a net loss of US$160,000 (US$0.03/share) for Q4 2000, which included store-closure and asset-impairment expenses of US$336,000 and restaurant-opening costs of US$6,000.
The Q4 of 2001 consisted of 16 weeks versus 17 weeks in 2000, and FY 2001 contained 52 weeks versus 53 weeks in 2000.
Sales of US$75.2m for the FY were down 3.5% at US$2.8m, versus the prior year. Sales for the Q4 were US$21.1m, down US$2.8m, 11.6%, compared with sales of US$23.8m in the Q4 of 2000. Excluding the extra week in 2000, sales were down 1.9% and 6.5% versus the prior year for the year and Q4 respectively.
Excluding the extra week of sales in 2000, comparable-store sales declined 8% in the Q4 and 1.2% in 2001 versus 2000. Contributing to the comparable-store sales decline for the quarter and year were: (i) the weak economic environment and high unemployment, especially in core Northern California markets and (ii) the dramatic drop in consumer confidence following the 11 September tragedy.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataComparable-store sales for the first seven weeks of fiscal 2002 are down 5.7% compared to the prior year. Factoring out the closure of one store for two weeks for the repair of water damage, the company’s pro-forma comparable-store sales are down 5.1%. At this time the company’s management expects comparable-store sales to remain below the prior year until the economy and consumer confidence improves.
The comparable-store average check was US$7.54 in the Q4, an increase of 2.2% versus the prior year, and US$7.55 for the FY, an increase of 3.8% versus 2000, resulting from price increases and coupon offers at a lower discount.
Everett Jefferson, president and CEO, said: “Our fiscal 2001 financial results were disappointing and were primarily the result of the comparable-store sales declines in the Q3 and Q4. In addition, while we continued to manage costs closely, we incurred US$206,000 in store-opening costs in the Q4 and will not see the benefit of these new stores until fiscal 2002.
“We are confident that our restaurants are operating with a high level of guest service, that we continue to manage costs effectively, and that our advertising is effectively communicating the strengths of Fresh Choice. As we continue to refine all these areas, we believe we are well positioned for renewed comparable-store sales growth when the economy begins to improve.
“The company is continuing with its expansion plans as we opened a new Fresh Choice location in California and a fourth Fresh Choice Express test location in Texas during the Q4. The fourth Express test location is in a mall and includes a fully branded licensed Starbucks location as an integrated element under a licensing agreement between Fresh Choice and Starbucks Coffee Company. In addition, the Company opened another Fresh Choice in California at the beginning of 2002 and expects to open an additional five to seven new Fresh Choice locations in 2002,” continued Jefferson.
The store-closure and asset-impairment charge of US$181,000 in the Q4 is for the planned closure of two restaurants whose leases expire in 2002 and the planned conversion of one Fresh Choice Express to a licensed Starbucks. The charge is comprised of USa $161,000 non-cash charge for the write-down of assets to their fair value and a US$20,000 charge to cover the estimated closure costs associated with the two planned restaurant closures.
