SAN DIEGO — The law firm of Coughlin Stoia Geller Rudman & Robbins LLP has announced that a class action has been filed in the U.S. District Court for the Eastern District of Missouri on behalf of purchasers of Panera Bread Co. common stock between Nov. 1, 2005, and July 26, 2006.
The complaint charges Panera Bread, and certain of its officers and directors, with violations of the Securities Exchange Act of 1934.
According to the complaint, throughout the class period, the company highlighted its increasing systemwide sales and, as a result, continuously increased its earnings guidance. Moreover, the company was rapidly opening new locations throughout the United States, causing a decline in sales at its existing stores.
Additionally, the complaint alleges that, throughout the class period, defendants issued materially false and misleading statements and failed to disclose that the company was experiencing negative trends in its business, which were causing it to experience rising expenses and slow growth; that the company's store-expansion strategy was causing the company to yield a lower return on capital and experience a decline in sales per restaurant as the company's new store openings began to cannibalize sales from existing stores. As a result, defendants lacked a reasonable basis for their positive statements about the company, its prospects and revenue growth rate.
On July, 26, 2006, Panera Bread announced its financial results for the second quarter of 2006, the period ended June 27, 2006. In response to the announcement, the price of Panera Bread common stock fell $7.34 per share, or approximately 12 percent, to close at $51.93 per share, on extremely heavy trading volume. The plaintiff seeks to recover damages on behalf of all purchasers of Panera Bread common stock during the class period.
