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

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Summary:
We have reverted to a Neutral recommendation on Panera Bread from Underperform, based on the company's improved year-over-year earnings, revenues and comps growth. Despite missing the Zacks Consensus Estimate, both earnings and revenues increased year over year reflecting comps growth. The company also raised the lower end of its comps guidance for 2014, reflecting the comps growth. In our view, the Panera 2.0 program has begun yielding results, with improved revenues and comps. However, we are concerned that the company is spending heavily to improve operational capabilities, enhance guest experience and strengthen the overall position. Additionally, rising food costs that have affected the restaurant industry at large would further dent Panera's margins.

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 Sep 30, 2014, the company had 1,845 bakery-cafes 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 Sep 30, 2014, the company had 903 company-owned bakery cafes and 942 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.



This article appears in: Investing , Stocks

Referenced Stocks: PNRA

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