RICHMOND HEIGHTS Mo. Panera Bread Co. chief executive Ron Shaich will step down as chief executive next May and be replaced by co-chief operating officer Bill Moreton, the company said late Tuesday.
Shaich, who co-founded the bakery-café concept 28 years ago, will become executive chairman of the board, Panera said. The executive changes will occur at the company’s next annual meeting on May 13, 2010.
Shaich said the change had been under discussion with the company’s senior management for years and would allow him “to contribute to the broader world beyond Panera.” As executive chairman, he will continue to oversee strategic initiatives at the company, and analysts noted that as a large shareholder, he will most likely remain intimately involved with Panera’s future.
“Given my responsibilities to Panera, I have not had the time to explore how I might contribute beyond Panera,” he said in a statement. “I feel confident doing so now that we have someone ready to assume the role of CEO and given the strength of our management team.”
Moreton, who also will become Panera’s president and a board member, has been with the company in various stints for more than 10 years. Between 1998 and 2003, he served as Panera’s chief financial and administrative officer. He rejoined the company in 2008 as co-chief operating officer after serving as president and chief financial officer of the Chicago-based Potbelly Sandwich Works chain. Moreton also served as chief executive of Baja Fresh Mexican Grill when the fast-casual chain was owned by Wendy’s International Inc.
“I’m very confident that with the help of our management team, our franchise partners and our thousands of Panera managers and associates, Panera will continue on the successful journey it has been on for the last two decades,” he said.
The executive changes come as Panera continues to outperform most other restaurant chains during this latest economic downturn. For its September-ended third quarter, Panera posted a 35-percent increase in profit, which was aided by 3.3-percent rise in same-store sales at its corporate locations. The company’s stock was one of few in the restaurant industry that continued to rise in value during the down market of the past few years.
“Ron Shaich has been one of the most passionate and fully engaged CEOs in the restaurant industry for as long as we have known him,” Joe Buckley, a restaurant securities analyst at Bank of America Merrill Lynch, said in a report Wednesday. “His decision to step back and assume an executive chairman role starting next May is surprising and we view less day-to-day involvement for Ron as a loss for the company.”
“But the selection of Bill Moreton as Ron’s successor as CEO and Ron’s commitment to remain involved with brand management and strategy is reassuring,” Buckley noted.
In addition to the management changes, Panera said its board has approved a three-year share repurchase program of up to $600 million, which will begin as soon as Friday. Analysts noted that the amount of the buybacks was larger than expected, and a positive sign for the company that has managed to hold little debt and boast strong cash flow.
In morning trading Wednesday, Panera’s share price increased 2 percent to $63.60. During the past 52 weeks, the company’s stock has ranged between $35.07 and $65.33 per share.
Panera operates or franchises 1,362 bakery-cafes under its namesake brand and the Saint Louis Bread Co. and Paradise Bakery Café brands.