News

Panera Bread reports 19% revenue growth

July 26, 2011

Panera Bread Company has reported its second quarter results for the period ended June 29, 2011. Additionally, the company has given an update for the first 26 weeks of the 2011 fiscal year.

For the second quarter, same-store sales of company-owned bakery-cafes increased 4.4 percent. Franchise-operated comps increased 3.6 percent for a total 3.9 percent system-wide rise.

The Q2 increases were the result of year-over-year transaction growth of 2.9 percent and average check growth of 1.5 percent, according to the company’s earnings report. Average check growth was comprised of retail price increases of approximately 2.5 percent and negative mix impact of approximately 1 percent.

Revenue for the quarter is $451 million, up 19 percent from $378 million reported for the same period last year. Meanwhile, net income has been reported of $36 million, or $1.18 per diluted share, for the fiscal second quarter, up from a net income of $27 million, or $0.85 per diluted share, reported in the same quarter of 2010.

During the second quarter of fiscal 2011, the company opened 13 new bakery-cafes and its franchisees opened 15 new bakery-cafes. As a result, there were 1,493 bakery-cafes open system-wide as of June 28. Additionally, during the second quarter, the company completed the purchase of substantially all the assets and certain liabilities of 25 bakery-cafes from its Milwaukee franchisee.

Average weekly sales for company-owned new units year-to-date through the second quarter of fiscal 2011 was $43,449, compared to $42,755 in the same period of fiscal 2010. AWS for franchise-operated new units year-to-date through the second quarter was $44,550, compared to $39,398 in the same period of fiscal 2010.

Year to date

While the company wasn’t specific about its year-to-date same-store sales increases, it reported that over a two-year period, company-owned same-store sales increased 14 percent while franchise-operated comps increased 13.7 percent for a system-wide rise of 13.8 percent.

For the twenty-six weeks ended June 28, revenue increased 18 percent to $873 million, up from $742 million for the same period last year.

Net income was $68 million, or $2.27 per diluted share. These results compare to a net income of $53 million, or $1.67 per diluted share, reported for the same period last year.

Rest of the year

For the third quarter of fiscal 2011, the company is targeting earnings per diluted share of $0.92 to $0.94 versus $0.75 per diluted share in the third quarter of fiscal 2010.

The company's earnings per diluted share target is $1.35 to $1.37 for the fourth quarter, versus $1.21 per diluted share in the fourth quarter of fiscal 2010.

The third and fourth quarter of FY 2011 diluted earnings-per-share targets include the following key assumptions:

Same-store sales growth is targeted at 4.5 percent to 5.5 percent over the same period last year. The third quarter target assumes transaction growth of approximately 2.0 percent and average check growth of approximately 3.0 percent, consisting of a year-over-year price increase of approximately 2.5 percent and flat mix impact on check growth.

The company is also targeting comparable bakery-cafe sales growth of 4.5 percent to 5.5 percent for the fourth quarter of fiscal 2011. This target assumes flat transaction growth and average check growth of approximately 4.5 percent to 5.5 percent. The company is targeting a year-over-year price increase of approximately 3.5 percent and mix impact on check growth of approximately 1.0 percent to 2.0 percent.

The company also is raising its new unit development range to approximately 100 to 105 system-wide new unit openings in fiscal 2011. The average weekly net sales performance for new company-owned units is now expected to be at or above the high end of the company's previously targeted range of $37,000 to $39,000 for fiscal 2011.

"We are pleased to deliver 39 percent earnings growth in the second quarter, marking the 12th out of the last 13 quarters of 20 percent-plus growth, a record we feel very proud of," said Bill Moreton, CEO. "Our sales in the second quarter were driven by strong transaction growth, fueled by our past and current investments in the quality of our food, operations and customer experience. Looking forward into 2012, we believe that these investments have set us up for another strong year."