Panera Bread Company (PNRA): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Panera Bread posted better-than-expected first quarter 2014 results. Earnings of $1.55 beat the Zacks Consensus Estimate of $1.52 by 2.0% attributable to an improved top-line performance. However, earnings declined year over year as strong revenues were offset by weaker margins. Total revenue was up 8.0% year over year and also beat the Zacks Consensus Estimate due to higher sales in all the segments. Increasing investments in initiatives to improve operational initiatives hurt margins in the quarter. However, these initiatives, including introduction of new menu items, increased media exposure and focus on an off-premise catering program, are expected to improve long term growth prospects. However, a weak outlook for 2014 remains a matter of concern. We maintain our Neutral recommendation on the stock.

Overview:

Based in Richmond Heights, MO and founded in 1981, Panera Bread Co. is engaged in the ownership and franchising of bakery-cafes in the United States under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Caf brands. As of Mar 31, 2014, the company had 1,800 bakery-cafes in 45 states operating under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Caf brands.

Its bakery cafes primarily offer baked goods, dough items, custom roasted coffees, and cafe beverages. The company's bakery cafes are located in suburban, strip mall, and regional mall locations.

The company operates through three business segments: company bakery-cafe operations, franchise operations, and fresh dough and other product operations. As of Mar 31, 2014, the company had 881 company-owned bakery cafes and 919 franchise operated bakery-cafes located throughout the United States and in Ontario, Canada. Panera Bread's 24 fresh dough facilities supply fresh dough and other products daily to most company-owned and franchise operated bakery-cafes.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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