Freshii Stock Still Looks Rotten in Late 2018

Freshii (TSX:FRII) stock has plunged 10.4% over the past week. It would be easy to blame this on the global stock market rout, but Freshii has been struggling throughout the year. Shares are down 44% in 2018 so far.

Freshii stock has been disappointing since it received a brief bounce following its initial public offering in early 2017. The quick-serve restaurant company, geared specifically toward millennials, had garnered good press before and after its launch. Unfortunately, the months to follow have been mired in disappointment.

The first batch of bad news for Freshii came in mid-2017 when the company was forced to adjust its forecast and pull back on expansion in the United States and the United Kingdom.

In the second quarter of 2018, the company saw system-wide sales increase 34% year-over-year to $46.3 million and Freshii also opened 25 net new stores in the quarter. Adjusted EBITDA fell to $1.5 million compared to $1.9 million in the prior year.

Freshii is expected to release its third-quarter results in early November. The stock has teased investors as a value play since its precipitous drop in 2017 but has failed to gather any real momentum into the current cycle.

This is unfortunate as Freshii boasts a forward-thinking business model. Freshii is still worth monitoring in late 2018 but the company will need to show real progress in the full-year fiscal 2018 before it can be seen as a viable growth option again.