News

Einstein Noah squeezes out same-store sales increase, cuts staff by 10%

August 1, 2014

Einstein Noah Restaurant Group Inc., parent company of Einstein Bros. Bagels, Noah's New York Bagels and Manhattan Bagel brands, reported financial results for the second quarter ended July 1. Some highlights include:

• Total revenues increased $4.4 million, or 4.1 percent, to $112.4 million from $108.0 million;
• System-wide comparable store sales increased 1.6 percent;
• Company-owned comparable store sales increased 0.9 percent; and
• Restaurant units across the company, franchise and license system totaled 857, an increase of 36 units.

Interim CEO Michael Arthur said in a news release that the company is on target with its 2014 Brand Revitalization Plan.

"As a result, we yielded an increased revenues growth rate at 4.1 percent as well as a significantly better conversion of revenues toward profit. Record second quarter revenues growth was achieved through positive system-wide and company-owned comparable store sales and double-digit increases in our manufacturing and franchise / license segments," he said. "We are investing in the base operations, including product quality enhancements, new lunch offerings, optimized marketing and unit remodels."

The company is also investing in new unit expansion, having opened 20 units so far this year, with a total of 75 to 85 new units expected by the end of this year.

Additionally, during Q2 the company implemented cost savings initiatives, including a reduction of its support staff by nearly 10 percent. CFO John Coletta said in the release that this reduction was a result of eliminating "non-essential" resources. These savings are expected to be more than $1 million for the remainder of 2014, he said.