Einstein Noah: Net income decreases in Q1/2009

Lakewood / CO. (enr) Einstein Noah Restaurant Group, a leader in the United States´quick-casual segment of the restaurant industry, reported financial results for the first quarter ended March 31, 2009. Selected Highlights for the First Quarter 2009 Compared to the First Quarter 2008:

• Total revenue of 100,4 million USD versus 103,3 million USD.
• System-wide comparable store sales decreased 3,7 percent.
• Net income and diluted EPS of 1,9 million USD and 0,11 USD, respectively, versus net income and diluted EPS of 3,8 million USD and 0,23 USD.
• First Lien Term Loan repayment of 7,6 million USD.
• Unrestricted cash balance of 21,4 million USD.
• Positive momentum with Franchise and License development USD.

Jeff O´Neill, Chief Executive Officer and President of Einstein Noah: «Our ability to build a ‘best in class’ organization and strong go-forward plan is built on the significant opportunity we have to regain transaction momentum and increase customer loyalty on our brands. Ultimately, our financial performance for the quarter reflected the underlying economic pressure on our customers and the beginning of our deliberate transition to a new approach to building shareholder value over the long term. To that point, we increased marketing investments during the period with the intention of building awareness, trial, and frequency. We also invested in new products, which generated strong trial and awareness for our brands. While this approach pressured our margins during the quarter, it´s the right thing to do for the business, and the best way to create significant value for shareholders going forward».

For the first quarter of 2009, system-wide comparable store sales decreased 3,7 percent while total revenues decreased 2,8 percent to 100,4 million USD compared to the prior year. Company-owned restaurant sales fell 3,4 percent to 90,5 million USD as a result of a 5,7 percent decrease in comparable store sales.

In the fourth quarter last year, the Company experienced a 7,6 percent decline in transactions, which was partially offset by a 4,6 percent increase in the average check due to pricing. As the Company commenced the first quarter, transactions continued to decline approximately eight percent to nine percent due to the weakening economic environment. Midway through the period, the Company invested in consumer initiatives focused on its core bagel products, along with new product launches late in the quarter. The consumer response and acceptance of these initiatives has been encouraging with transaction declines moderating substantially for the balance of the first quarter.

Info: «Einstein Noah Reports Q1/2009 Financial Results» – complete press release (HTML).