News

Panera CEO: Q1 results low because of investment initiatives

Panera Bread Company reported a net income of $32 million for Q1, but admitted that earnings per share came in at $1.41, down 9 percent from the same period last year.

April 29, 2015

Panera Bread Company reported a net income of $32 million for Q1 but admitted that earnings per share came in at $1.41, down 9 percent from the same period last year. The operating margin for the quarter also declined about 180 basis points versus fiscal. Those numbers, however, exclude charges recorded during the quarter involving the company’s refranchising initiative, according to a company press release. Panera is planning to refranchise 50 to 150 bakery-cafes, according a company press release, and has already entered into letters of intent to refranchise 73 units.

"In the first quarter, we continued to make progress on our initiatives to make Panera a better competitive alternative with expanded growth opportunities,” said Ron Shaich, Chairman and CEO. “These initiatives include improving the guest experience through Panera 2.0 (inclusive of digital access and improved operational capabilities) and driving consumer excitement through innovation in food, marketing and store design. We are also building capabilities to grow in adjacent businesses, including catering, delivery and consumer products. As expected, these investments negatively impacted first-quarter results; however, our confidence is growing that by making these investments, we can increase the potential to reignite significant earnings growth for years to come."

Highlights included:

• Revenue increased 7 percent to $649 million
• Company-owned comparable net bakery-cafe sales up 1.5 percent
• Q2 2015 (first 27 days) company-owned comparable net bakery-cafe sales up 2 percent
• Company-owned comparable net bakery-cafe sales increased 1.5 percent, franchise-operated comparable net bakery-cafe sales decreased 0.1 percent
• System-wide comparable net bakery-cafe sales increased 0.7 percent compared
• Company-owned comparable net bakery-cafe sales increase of 1.5 percent in fiscal Q1 2015 was comprised of year-over-year transaction growth of 0.1 percent and average check growth of 1.4 percent
• Opened 11 new bakery-cafes and franchisees opened 14, which resulted in 1,901 bakery-cafes open system-wide as of March 31,