What happened

Shares of Zoe's Kitchen Inc (NYSE:ZOES) were moving higher on Wednesday in anticipation of tomorrow morning's earnings report. The stock was up as much as 11.1% today, ultimately settling with gains of 9.1%.

A man passes a bowl of noodles to a woman as a group is sat around a dinner table.

Image source: Zoe's Kitchen.

So what

Zoe's shares are down nearly 70% over the last year, as the company -- like much of the rest of the fast-casual industry -- has failed to live up to the market's growth expectations. Profits have fallen over the past year, and the stock is now lingering near all-time lows.

However, investors seem to think the low bar set by the weak performance in the quarter a year ago will make tomorrow's report look good by comparison, sending the stock higher.  

Now what 

The fast-casual chain has lowered its guidance or missed its own estimates in each of the past four quarters, so the stock's slide isn't surprising. This time around, analysts are expecting a profit of just $0.02 a share, down from $0.06 a year ago. On the top line, they see 13.3% revenue growth to $75.1 million, but that increase is likely to be driven by new restaurants only, as comparable-restaurant sales fell 3.3% in its first-quarter report.

The stock is likely to swing wildly one way or another following the company's report. If Zoe's can beat those numbers, expect shares to keep climbing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.