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Nov 14, 2019

Freshii same-store sales fall as bet on limited-time items disappoint

Freshii posts same-store sales drop despite changes


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Freshii Inc. continued to see traffic to its health-food eateries fall during its most recent quarter, but believes upcoming initiatives including a loyalty program can win over consumers.

Same-store sales, a key retail metric, fell 3.7 per cent for the quarter ended Sept. 29.

"Turning around our same-store sales will not happen overnight, but we are optimistic about the opportunity to grow the Freshii brand long term," said Daniel Haroun, the chief financial officer, during a conference call with analysts Thursday.

CEO Matthew Corrin said the company's current program, which focuses on offering limited-time menu items, isn't driving new traffic.

Freshii's digital marketing campaigns and other initiatives expected to roll out next year will look to lure new customers into its stores, he said.

The eatery chain is working on improving its customer feedback and measurement program, said Corrin, to help determine what diners value and where the company can improve.

The company is also developing a new mobile app that Freshii expects to roll out in the middle of next year.

"The mobile, I think most importantly, is going to come with loyalty," said Corrin, which the company thinks will be "a very significant contributor" to same-store sales growth.

Elizabeth Johnston, a consumer products analyst at Laurentian Bank Securities, had expected same-store sales to fall two per cent.

"System sales exceeded our forecast, with a higher number of net new store openings offsetting the lower SSSG," Johnston wrote in a report.

Freshii, which keeps its books in U.S. dollars, reported a loss of US$415,000 or a penny per share in the quarter compared with a loss of $446,000 or a penny per share a year ago.

Revenue totalled nearly $5.9 million, up from $5.6 million in the same quarter a year ago.

System-wide sales grew 7.4 per cent to $49.2 million in the quarter compared with $45.8 million a year ago. The revenue growth was driven by 10 net new stores being added in the quarter. Freshii opened 16 locations and closed six.