What happened

Shares of Zoe's Kitchen Inc. (NYSE:ZOES) dropped 22.9% in the month of May, according to data provided by S&P Global Market Intelligence, after the Mediterranean-themed fast-casual restaurant chain announced underwhelming first-quarter 2017 results and reduced its full-year outlook.

So what

Zoe's Kitchen shares fell as much as 20% on May 26 alone -- the first trading day after Zoe's official quarterly release -- before partially recovering to close down more than 12% that day. In its report, Zoe's confirmed that first-quarter revenue had climbed 12.6% year over year to $90.6 million, as contributions from new restaurants were offset by a 3.3% decrease in comparable-restaurant sales. Perhaps most notable: That surprise slip snapped a 28-quarter streak of positive comparable-sales growth for the company.

On the bottom line, Zoe's adjusted net income came in at $0.2 million, or a penny per share, down from $1.1 million, or $0.06 per share in the same year-ago period. 

Zoe's Kitchen catered food

IMAGE SOURCE: ZOE'S KITCHEN INC. 

"Our first quarter was largely in line with our expectations, reflecting the challenging traffic trends that prevailed across the industry, as well as the cycling of our 8.1% comp from 2016," explained Zoe's Kitchen CEO Kevin Miles. "With similar traffic trends continuing into the second quarter, we have revised our full year outlook."

Now what

More specifically, Zoe's now expects full-year 2017 revenue to be between $314 million and $322 million (down from $325 million to $327 million before), assuming comparable-restaurant sales will be flat to negative 3% (compared to growth of 1% to 2% previously). Zoe's also anticipates restaurant contribution margin will be between 18.3% and 19%, a reduction from its prior outlook for between 19% and 19.3%. 

That's not to say Zoe's results were terrible. And Miles further insisted that "[w]hile we are dissatisfied with our comp result in the first quarter, we continued to grow share in our largest markets and are confident in the overall health of our brand."

Nonetheless, this was a disappointing quarter from Zoe's Kitchen, and it's no surprise to see shares still trading within spitting distance of their 52-week low today.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Zoe's Kitchen. The Motley Fool has a disclosure policy.