Einstein Noah Q3 Slightly Below Expectations, Investors Barely React

Einstein Noah Restaurant Group BAGL is barely moving in after hours trading despite a slight earnings miss. Einstein Noah Restaurant Group reported a Q3 EPS of $0.22 versus the Street estimate of $0.23. Earnings per share were up five percent from the year-ago period. Revenue came in at $106.4 million versus the Street estimate of $107.92 million. Once again, sales were up one percent year-over-year despite the revenue miss. Shares are down roughly 0.04 percent in after hours trading, shedding a penny from the stock's close of $17.84. "While industry headwinds and a timing shift on pricing resulted in a comparable store sales decline in the third quarter, we were still able to hold restaurant gross margin steady and delivered an increase in diluted EPS compared to the year-ago period," Jeff O'Neill, President and Chief Executive Officer of Einstein Noah, said in a company release. "We are confident that our 'everyday value' strategy coupled with our ongoing operational focus on guest experience is the right strategy to drive transactions and that we can build momentum as consumer restaurant spending improves." O'Neill said that the company has opened 62 units to its system over the past four quarters, "which is more than at any other comparable timeframe in our history." He affirmed that Einstein Noah's current franchise and license commitments provide the corporation with "great visibility with respect to asset-light growth over the next several years." "Both Company-operated and franchised unit openings are exceeding system averages for weekly sales year-to-date and our licensed partners are adding more high-volume airport stores in 2013 than they have ever done before," he added. "Most importantly, our Company, franchise, and license expansion is being marked by an improvement in real estate site quality which will provide a multitude of benefits to our business going forward." Einstein Noah's shares have performed well this year, rising more than 39 percent since January. The bagel empire has experienced steady growth for most of the last five years, rising more than 184 percent. The company experienced a sharp decline last December, however, when it lost more than 23 percent of its value. Einstein Noah has since recovered, but that decline makes the 12-month gains (roughly 14 percent) far less impressive than the firm's year-to-date growth. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report. Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ