Einstein Noah Restaurant Group Inc. 's ( BAGL ) first-quarter
fiscal 2013 adjusted earnings of 23 cents per share beat the Zacks
Consensus Estimate by a penny and grew 9.5% from the year-ago level
of 21 cents. An improvement in the top line coupled with lower
general and administrative and interest expenses facilitated
bottom-line growth.EINSTEIN NOAH (BAGL): Free Stock Analysis
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ReportWENDYS CO/THE (WEN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Total revenue grew 1.2% year over year to $106.1 million but
missed the Zacks Consensus Estimate of $109.0 million. The
year-over-year upside in revenues can be attributed to a 0.8%
increase in company-owned restaurant sales, a 5.7% jump in
manufacturing and commissary revenues, and flat franchise and
license related revenues.
However, system-wide comparable store sales decreased 0.6% as
anemic economic conditions restricted consumer discretionary
spending. Additionally, a calendar shift in the Easter holidays
also hurt comps in the quarter.
Restaurant gross margin contracted 290 bps year over year to
16.5%, primarily due to increased costs related to the
implementation of the every-day value menu.
The company exited the first quarter of 2013 with 822 restaurants,
out of which 461 were company owned, 99 were franchised and 262
For fiscal 2013, the company plans to open 60-80 restaurants.
Capital expenditures are estimated in a range of $20-$22 million.
Commodity inflation for the full year is expected to remain in the
Lakewood, Colo.-based Einstein Group's performance has been
faltering in the last few quarters. Its revenues have fallen short
of the Zacks Consensus Estimate for the sixth consecutive
Based on recent performances, we remain cautious on the stock at
the current level. Moreover, stiff competition and weak consumer
confidence amid a sluggish economy support our view on the
Einstein Noah Restaurant Group currently carries a Zacks Rank #5
(Strong Sell). Other players in the same industry, which look
attractive at current levels include The Wendy's
Co. ( WEN
), The Cheesecake Factory Inc. ( CAKE ) and
Burger King Worldwide Inc. ( BKW ). While Wendy's
carries a Zacks Rank #1 (Strong Buy), Cheesecake Factory and Burger
King carry a Zacks Rank #2 (Buy).