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Analysts hail Panera's comp rise as a sign of stabilization

ST. LOUIS Panera Bread Co. reported Wednesday a year-over-year same-store sales increase of 3.1 percent for the five weeks ended Aug. 28 at bakery-cafes open at least 18 months, leading many analysts to say the restaurant operator and franchisor has stabilized what had been a volatile year of same-store sales results.

Panera reported negative and flat same-store sales results for much of the beginning of the year, citing harsh weather in the Midwest, where a majority of its stores are located. The weak sales led the company to downgrade its expected first-quarter earnings. In April, May and June, same-store sales results fluctuated between increases of just 1.2 percent and 3.1 percent. July’s same-store sales rose 3.9 percent, and with August’s increase of 3.1 percent, securities analysts said the chain is back on track.

For its latest period, same-store sales increased 4.1 percent at corporate stores and rose 2.5 percent at franchised units. Securities analyst Steven Reese at New York-based J.P. Morgan estimated that traffic was up at least 3 percent in August, since prices at corporate locations rose just 0.6 percent. Many analysts predicted that Panera would take additional price increases in the fourth quarter, which would help same-store sales results and unit-level margins. In addition, new menu offerings like the Orchard Harvest Salad, the Chipotle Chicken Sandwich and the Fiesta Con Queso Soup, all introduced over the Labor Day weekend, could help drive sales, observers predicted.

Panera operates or franchises 1,106 bakery-cafes under the Panera Bread and Saint Louis Bread Co. brands. It also owns a 51-percent interest in the 52-unit Paradise Bakery & Cafe concept, based in Scottsdale, Ariz.

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