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Panera posts comp increase in 3Q

RICHMOND HEIGHTS Mo. Rebounding from the second quarter’s dip in same-store sales at its bakery-cafe chain, Panera Bread Co. reported growing sales trends for its third quarter — and so far in its fourth quarter — which has helped it boost earnings.

Officials of the Richmond Heights-based company said that for the 27 days booked in the fourth quarter, same-store sales increased 6.9 percent at corporate locations and 6.3 percent at franchised units. They also said that the company was setting its initial target for fiscal 2010 earnings per share between $3.05 and $3.15, which would represent an increase of between 14 percent and 18 percent from the company’s expected per-share earnings for fiscal 2009.

Panera’s third-quarter net income rose 38 percent to $18.9 million, or 61 cents per share, from $13.7 million, or 45 cents per share, in the same quarter a year ago. The latest quarter’s net income included a 4-cent-per-share net impact from charges surrounding a state sales tax audit, as well as a gain from an investment redemption.

Panera operates 575 bakery-cafe units and franchises another 787 units.

Third-quarter revenue rose 6 percent to $335.0 million, on the strength of a net eight new corporate restaurants and nine new franchised locations, as well as same-store sales growth of 3.3 percent at corporate stores and 2.5 percent at franchised units.

In the prior second quarter, Panera’s same-store sales fell 0.7 percent at company restaurants and 0.2 percent at franchised branches. The company said those results were hurt by 0.5 percent from the shift of the Easter holiday from the first quarter of fiscal 2008 to the second quarter of fiscal 2009.

The company said its third quarter transaction growth and average check growth were fueled by new product introductions, investments in marketing and the improved strength of the system’s catering business.

“Over the last several quarters, we’ve spoken about our commitment to invest in our business to benefit the customer and to utilize the recession to build competitive advantage,” said Ron Shaich, Panera Bread’s chairman and chief executive. “We believe our 35 percent [earnings per share] growth in the third quarter and the strength of our comparable bakery-cafe sales, as well as our positive transaction growth, proves that this strategy is working and that we are indeed taking market share from our competitors.”

Shaich concluded, “The result is that we are now more confident than ever of our capacity to generate significant earnings growth in [the fourth quarter], 2010 and beyond.”

For the 39 weeks ended Sept. 29, the company’s net income increased 35 percent from the same time a year ago, to $56.4 million, or $1.82 per share. Revenue rose 5 percent to $986.5 million.

Contact Alan J. Liddle at [email protected].

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