Freshii Inc - Class A (Sub Voting) T.FRII

RE:FRII

[amateuranalyst]

*The number of stores in SSSG calculation has increased quite a bit since big positive levels of the past so it will be a tougher beast to turn around. *Negative SSSG may dissuade franchise partners in pipeline to sign franchise contract or to put good money after bad. After opening 26 new stores in Q4, the number of stores in "active opening process" decreased from 175 to 150 since Q3 ie. ~zero pipeline growth. *The call referenced an underperforming cohort extensively. After closures grew to 18 in Q4 from 8 in Q3 it sure looks like the street is being prepared for a lot more, decline in overall AUV to $457K from 503 last year (in US 523 from 603 ouch!) tells this story too. How big is underperforming cohort and how long to clean up?? *WMT store sales will be interesting as their meals-to-go offering is currently much less extensive than L, SBY & MRU so they could use a shot in the arm, but have to develop the customer flow. Will FRII's commissary partners get to a profitable delivery/waste volume per store or not? That is the question. Only hint so far is from Shell, where actual store volumes seem underwhelming. We will soon see whether they expand Shell program or not, how the WMT program looks when rolled out and hopefully disclosure of CPG segment going forward. *NCIB buying made up 10% of post-Nov 7 trading in the quarter (25% of trading if we exclude the 3 big volume days post-announcement), at this clip they will go through their 2.5M share limit within next 3-6 months, taking away what may be the only steady bid in the market. Conclusion: Still very hard to go long FRII at this point