Lakewood, Colorado–based Einstein Noah Restaurant Group, Inc. (BAGL) recently reported fourth quarter 2011 adjusted earnings of 26 cents, which surpassed the Zacks Consensus Estimate by a penny.
Including the tax impact of 5 cents for the restructuring and write-off of unamortized debt issuance costs, the company reported earnings of 21 cents, up from 17 cents posted in the prior year quarter.
Total revenue inched up 2.2% year over year to $106.1 million, but was below the Zacks Consensus Estimate of $107 million. The year-over-year upside in revenues was due to a 1.6% rise in system wide comparable store sales and a 1.7% hike in comparable transaction.
Same-store sales were positive for the second consecutive quarter as the company continued to focus on fresh-baked goodness and product innovation to drive traffic.
The company’s full-year earnings per share were $5.47 versus 67 cents in full fiscal 2009. Revenues were $411.7 million in full fiscal 2010, representing a year-over-year leap of 0.8%, as system-wide comparable store sales jumped 0.3%.
Income from operation expanded 17.6% year over year to $8.9 million in the reported quarter and 10.7% to $27.6 million in fiscal 2010, attributable to increased sales leverage and cost control initiatives.
Store Update
During the quarter, Einstein Noah opened 19 new restaurants, which included 2 company owned, 7 franchised restaurants and 10 licensed restaurants. Thus, at the end of the year, the company had 733 restaurants.
Financial Position
During the quarter, the company entered a new five year senior credit facility of $125 million, including a term loan of $75 million and revolving credit facility of up to $50 million. The company plans to use the credit facility for growth opportunities and enhancement of shareholder value.
Einstein Noah said that its board has approved a share repurchase of up to $20 million in 2 years.
At the end of the year, Einstein Noah had cash and cash equivalents of approximately $9.9 million and free cash flows of $16.8 million.
Outlook
In fiscal 2011, the company plans to open 75 to 90 restaurants, half of which will be licensed restaurants. Einstein Noah also expects cost inflation to be higher than 2010. Capital expenditures are estimated between $28 million and $30 million.
Our Take
We expect estimates to go up in the coming days, as the company continues to focus on sales-driven initiatives like introduction of new products and promotion of premium products to attract customers. To further drive traffic the company continues to emphasize marketing initiatives.
The company also remains committed to enhancing shareholder value and expanding margin by controlling its cost expenses. The Zacks Consensus Estimates for 2011 are pegged at 90 cents and $1.02 for 2012.
One of Einstein Noah’s competitors, Brinker International Inc. (EAT), reported second quarter 2011 adjusted earnings per share of 38 cents, surpassing the Zacks Consensus Estimate of 32 cents. The upside in earnings was driven by continued margin expansion at Chili’s and top-line growth at Maggiano’s.
EINSTEIN NOAH (BAGL): Free Stock Analysis Report
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