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.
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
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
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
Panera Bread Company (PNRA): Read the Full Research
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