News

Einstein Noah posts positive Q4 gains

March 3, 2011

Einstein Noah Restaurant Group Inc. has reported financial results for the fourth quarter and full year ended Dec. 28, 2010.

System-wide comparable store sales and comparable transactions increased 1.6 percent and 1.7 percent, respectively, for the quarter.

Meanwhile, total revenues increased 2.2 percent to $106.1 million, up from from $103.7 million reported in the same quarter last year.

Income from operations increased 17.6 percent to $8.9 million, up from $7.6 million. Adjusted EBITDA improved 10.1 percent to $14.0 million, up from Q4 2009’s $12.7 million.

For the year,system-wide same-store sales increased 0.3 percent with flat transactions.

Total revenues increased 0.8 percent to $411.7 million, up from the previous year’s total of $408.6 million.

Income from operations increased 10.7 percent to $27.6 million, up from $24.9 million. And adjusted EBITDA improved 7.1 percent to $45.3 million.

“Our performance reflects our second consecutive quarter of positive system-wide comparable store sales, the success of our ongoing cost control strategies in expanding margins, along with our continued emphasis on fresh-baked goodness and new product innovation in driving traffic,” said Jeff O’Neill, CEO and president of Einstein Noah. “For 2011, we expect to maintain that focus by leveraging our strengths within core bagel / breakfast and healthy innovation, while promoting premium sandwiches, add-on purchases and catering to further raise our average check.”

New units and development

Restaurant openings during the fourth quarter of 2010 included 19 Einstein Bros. restaurants, which consisted of two company-owned restaurants, seven franchise restaurants, and 10 license restaurants.

In 2010, the company benefited from the opening of 15 additional franchise restaurants and 35 license restaurants. The effect of the new locations resulted in an increase in franchise and license related revenues of 31.8 percent to $2.9 million from $2.2 million.

2011 Outlook

The company expects to open between 75 and 90 total restaurants in 2011, including 10 to 14 new company-owned restaurants, 20 to 26 new franchise restaurants, and 45 to 50 license restaurants. The company has 20 signed development agreements for Einstein Bros. Bagels franchises, which would yield an ending pipeline of 100 to 110 additional franchise locations, of which 19 have already opened.

In 2011, capital expenditures are projected to be in the $28 million to $30 million range, including the opening of the aforementioned company-owned restaurants, the relocation of an additional 10 to 14 company-owned restaurants, along with the continued roll-out of the new coffee program.

As of Dec. 28, 2010, the company has secured 100 percent of its wheat needs for the first half of 2011, which represents approximately 10 percent of total commodity costs for the company.