Panera Bread reports Q2 comps increase of 10%

Panera Bread reports Q2 comps increase of 10%
Tags: Bakery Cafe, Business Strategy and Profitability, Operations Management
July 29, 2010

Panera Bread Company’s same-store sales increased 9.9 percent systemwide during the company’s second quarter ended June 29, 2010, thanks to a 10.1 percent comps increase reported for franchise locations. Meanwhile, company-owned store comps increased 9.6 percent for the second quarter compared to the same period last year.

The increase of 9.6 percent included the following year-over-year components: transaction growth of 1.9 percent and average check growth of 7.7 percent. Average check growth in turn was comprised of retail price increases of approximately 2.5 percent and mix impact of approximately 5.2 percent.

During the quarter, revenue increased 14 percent to $378 million, up from $330 million reported during the same period last year.

Net income increased 33 percent to $27 million, or $0.85 per diluted share, for the second quarter. The second quarter of fiscal 2010 results compare to net income of $20 million, or $0.65 per diluted share, for the second quarter ended June 30, 2009, and represent a 31 percent year-over-year increase in diluted earnings per share.

For the twenty-six weeks ended June 29, 2010, net income increased 38 percent to $53 million, or $1.67 per diluted share, compared to a net income of $37 million, or $1.21 per diluted share, for the twenty-six weeks ended June 30, 2009.

Average weekly sales for new company-owned units in the second quarter were $39,523, compared to $35,580 in the second quarter of fiscal 2009. AWS for company-owned new units year-to-date is $42,755 compared to $37,314 in the same period of fiscal 2009.

During the second quarter of fiscal 2010, the company and its franchisees opened 13 new bakery-cafes systemwide, resulting in 1,399 bakery-cafes open as of June 29.

Q3 and Q4 fiscal 2010 outlook

For the third quarter of fiscal 2010, the company is targeting earnings per diluted share of $0.71 to $0.73, versus $0.61 per diluted share in the third quarter of fiscal 2009.

This third quarter of fiscal 2010 diluted earnings per share target includes the following key assumptions:

The company's third quarter fiscal 2010 company-owned comparable bakery-cafe sales growth is targeted at 5 percent to 6 percent versus the comparable period in fiscal 2009. The assumptions underlying this are flat transaction growth and average check growth of approximately 5 percent to 6 percent, with average check growth comprised of retail price increases of approximately 2.5 percent and mix impact of approximately 2.5 percent to 3.5 percent.

The company announced systemwide comps in first 27 days of the third quarter were up approximately 7.8 percent. Company-owned comparable bakery-cafe sales in the first 27 days of the third quarter were up approximately 6.5 percent versus the comparable period in fiscal 2009.

The company also is targeting approximately 20 to 22 systemwide new unit openings in the third quarter of fiscal 2010 with average weekly sales for company-owned new units consistent with its full year target of $36,000 to $38,000.

The company's fourth quarter fiscal 2010 company-owned comparable bakery-cafe sales growth is targeted at 4.0 percent to 6.0 percent versus the comparable period in fiscal 2009. The assumptions underlying this target are transaction growth of 1.0 percent to 3.0 percent and average check growth of approximately 3.0 percent, with average check growth comprised of retail price increases of approximately 2 percent and mix impact of approximately 1 percent.

The company is targeting approximately 39 to 41 systemwide new unit openings in the fourth quarter of fiscal 2010 with average weekly sales for company-owned new units consistent with its full year target of $36,000 to $38,000.