Panera Bread Co.’s net income fell 14.8 percent in the second quarter ended June 30 on special charges for refranchising and an insurance issue, the company reported Tuesday.
The St. Louis-based bakery-cafe company reported income of $41.9 million, or $1.60 a share, compared to $49.2 million, or $1.82 a share, in the same period a year ago. Revenues in the second quarter were up 7.2 percent, to $676.7 million from $631.1 million a year ago.
Same-store sales systemwide were up 1.8 percent in the quarter compared to the same period last year. Same-store sales were up 2.4 percent at company-owned bakery cafes, the company said, and up 1.1 percent at franchised restaurants in the quarter.
Ron Shaich, Panera’s chairman and CEO, said in a statement: “Comp-store sales growth increased sequentially every month in Q2 2015 and reached 4.7 percent for the first 27 days of Q3.”
He said investments in catering, delivery and consumer packaged goods were generating sales growth and show increasing promise.
“However, the impact of the startup and ramp up costs associated with the hundreds of Panera 2.0 conversions expected in the third and fourth quarters of 2015 and the hundreds more expected in 2016, along with the dozens of delivery hubs opened in the past 18 months, will dampen near-term profit growth,” Shaich warned.
The company said it expects to convert about 300 company-owned bakery-cafes to Panera 2.0 during fiscal 2015. As of the end of the second quarter, the company had had completed the conversion of 183 bakery-cafes to Panera 2.0, with 77 conversions completed year-to-date.
Shaich was optimistic for the company’s future profits. “In our history, sales have led and profits have followed, and we believe that will again be the case at Panera,” he said. “In fact, our leading indicators give us increased confidence in our strategic plan and in our potential to reignite significant earnings growth.”
As of June 30, the company had 1,926 bakery-cafes in 46 states and in Ontario, Canada, operating under the Panera Bread, St. Louis Bread Co. and Paradise Bakery & Cafe names.