Panera Bread Co.
), a chain of bakery-café quick casual restaurants in the United
States and Canada, recently announced a new three-year share
repurchase program to buy back up to $600 million worth of its
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PANERA BREAD CO (PNRA): Free Stock Analysis
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This share repurchase authorization program replaces the previous
$600 million buyback program approved in November 2009, of which
$352.4 million remained.
The stock buyback is effective from August 28, 2012 and the company
seeks to execute the program in the open market or in negotiated
transactions or through accelerated stock buyback agreements,
depending on share price and other macro factors.
The share repurchase program will also reduce the number of shares
outstanding, which stood at 29.5 million as of June 26, 2012. At
the end of second-quarter 2012, the company had cash and cash
equivalents of $255.8 million. Shareholders' equity at the end of
the quarter stood at $745.4 million.
We appreciate Panera's effort to bolster long-term shareholders'
value. We believe that the share repurchase authorization affirms
the company's positive outlook and reflects its confidence in its
fundamentals. Concurrently, buying back of shares underlines Panera
Bread's strategy to increase shareholders' value in the long run.
The announcement is not only expected to reinforce shareholders'
confidence but also boost the market value of the outstanding
The company enjoys dominant position in the bakery-cafe business
and remains well positioned to reinvigorate brands, revitalize
comparable store sales and accelerate unit growth in the long run.
The introduction of the new menu, increased positive impact from
media support and faster recovery of higher-end consumers promise
more growth. Moreover, an increase in the full-year guidance for
two consecutive quarters as well as the expectation for continued
margin improvement also augurs well.
Panera, which competes with the likes of
Chipotle Mexican Grill Inc.
Einstein Noah Restaurant Group, Inc.
), currently, carries a Zacks #1 Rank, which translates into a
short-term Strong Buy rating. We are also maintaining our long-term
Outperform recommendation on the stock.