Einstein Bros 2013 Annual Report Download - page 26

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10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
Comparable store sales for our company-owned restaurants for each quarter in fiscal 2012 and 2013 were as follows:
Fiscal 2012 Fiscal 2013 Change
First Quarter +1.1% -1.0% -2.1%
Second Quarter +1.2% +0.4% -0.8%
Third Quarter +0.2% -1.4% -1.6%
Fourth Quarter +1.1% -0.5% -1.6%
Annual +0.9% -0.6% -1.5%
Total costs for company-owned restaurants, as a percentage of company-owned restaurant sales, increased 150 basis points primarily due to
our investment in discounting, minimum wage increases and the initial ramp up of 21 stores opened since the start of the fourth quarter 2012. Our
prime costs, consisting of costs of goods sold and labor costs, increased 60 basis to 57.4% of company-owned restaurant revenues.
32
Table of Contents
As a percentage of company-owned restaurant sales, we saw an increase in our food costs from 27.8% for fiscal 2012 to 28.1%. The
following items affected the comparability of our cost of sales for fiscal 2013 compared to fiscal 2012:
Cost of Goods Sold - 2012 27.8%
Inflation 0.2%
Investment in value and discounting 0.6%
Shift in product mix 0.1%
Savings from initiatives ($1.1 million) (0.3%)
Price increases (0.3%) 0.3%
Cost of Goods Sold - 2013 28.1%
As of December 31, 2013, we have secured price protection on the following commodity needs for fiscal 2014:
Commodity % Locked
Coffee 92%
Wheat 100%
Butter 84%
Class III Milk 100%
We anticipate overall inflation to be in the range of 1.0% to 2.0% for fiscal 2014.
As a percentage of company-owned restaurant sales, labor costs increased by 30 basis points to 29.3% in fiscal 2013, primarily due to
deleveraging of costs resulting from our investment in discounting, new stores and larger insurance claims, partially offset by a decrease in variable
incentive compensation.
As a percentage of company-owned restaurant sales, rent and related expenses increased by 50 basis points to 11.4% in fiscal 2013, primarily
due to unit growth, rent increases on renegotiated leases and related increases in property taxes.
As a percentage of company-owned restaurant sales, other operating costs increased by 60 basis points to 11.1% in fiscal 2013, primarily due
to increased utility charges, increased store supply expenditures and increased bank charges.
Gross margin for our company-owned restaurant segment decreased in fiscal 2013 by $5.1 million, or 7.0%, to $67.3 million. We attribute
this to sales deleveraging resulting from our investment in discounting.
Manufacturing and Commissary Operations
Fiscal Year Ended
(in thousands)
Increase/
(Decrease)
Percentage of manufacturing
and commissary revenues
January 1,
2013
December 31,
2013
2013
vs. 2012
January 1,
2013
December 31,
2013
Manufacturing and commissary revenues $ 31,037 $ 33,585 8.2%
Percent of total revenues 7.3% 7.7%
Manufacturing and commissary costs (exclusive of
depreciation and amortization) $ 24,236 $ 24,779 2.2% 78.1% 73.8%