‘Everyday value’ platform pushes Einstein Noah profit higher

by Eric Schroeder
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LAKEWOOD, COLO. — Net income for the Einstein Noah Restaurant Group, Inc. increased 13% to $3,332,000, equal to 19c per share on the common stock, in the second quarter ended July 2, up from $2,956,000, or 19c per share, in the same period of fiscal 2012.

Total revenues of $107,760,000 were up nearly 2% from $105,993,000 in the year-ago period.

For the six months ended July 2, net income was $5,693,000, or 33c per share, down 8% from $6,160,000, or 36c per share, in the same period a year ago. Total revenues for the six months were $213,883,000, up a little more than 1% from $210,866,000.

“Comparable store sales rebounded in the second quarter with a 0.7% gain while transactions experienced their smallest decline since the first quarter of 2011 as our focus and transition to drive traffic through ‘everyday value’ and improved guest experience was initiated and has begun to take hold,” said Jeff O’Neill, president and chief executive officer. “This represents our eighth quarter out of the last nine quarters that we have achieved positive system-wide comparable store sales. With our in-store customer-centric strategy and local and national marketing support now firmly in place, we are poised to reap the benefits of these investments through the back half of the year and beyond with continued traction in both comparable store sales and transactions.”

In an Aug. 1 conference call with analysts, Mr. O’Neill identified beverages as a “key strategic plank” for the company.

“It’s important, because when you think about driving traffic and frequency, when you have a strong specialty beverage platform and a strong coffee platform, that becomes a destination at breakfast,” he said. “And that’s what really drives traffic.

“Hey, we love when people come in for the best bagel and cream cheese in the country. We are leaders in bagels. But we also feel it is critical, and it’s a goal of ours, to move coffee and specialty beverages from a mix of about 10% to a mix of 15% and beyond. So coffee is a key player. Because when you think of it, we’re still going after breakfast in a big way. We have the strength in breakfast, and we believe we can build on that strength with our focus on that combination of fresh baked and fresh brewed, if you will.”

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