Einstein Noah Restaurant Group (BAGL) continues to expand its footprint across America and just reported a sizable earnings surprise.

Company Description

You probably already guessed it, but this company operates restaurants under well-known brands like Einstein Bros., Noah’s New York Bagels, and Manhattan Bagel. The company primarily owns and operates locations but offers franchise opportunities as well.

A Big Surprise

On Aug 6 Einstein Noah reported second-quarter results that included earnings per share of 39 cents, 70% higher than the Zacks Consensus Estimate. While revenue did fall slightly, just $1 million to $104.4, operating margins improved by 430 bps, to 19.2%.

Continued Expansion

A few days after the latest earnings results, the company announced that it will continue its “Aggressive Nationwide Expansion.” Expect to see 20 more Einstein Bros. locations in the coming months, for a total of roughly 700 stores.

Paul Carolan, Sr. VP, said “Even in this difficult economic environment, we have built tremendous momentum behind our licensing program.”

Analysts Eating it Up

While year-over-year growth is expected to be down about 18%, it should be up 17% in 2010. These rates are after 6 of 8 analysts polled by Zacks have raised full-year estimates.

The Zacks Consensus for 2009 is now $1.14, up from $1.05 since the report. Forecasts for next year are averaging $1.34, up from $1.29.

The Chart

Investors loved the previously mentioned earnings announcement as shares soared on the news. Take a look below.

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