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Restaurant Industry News
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Sunday June 11th, 2006 |
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Panera Bread Reports 61% Increase in Second Quarter Net Income
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Second quarter net income increased 61% to $10.4 million |
Click here for financial tables
Highlights
-- Second quarter net income increased 61% to $10.4 million
-- Second quarter earnings per diluted share increased 57% to $0.33
-- Second quarter revenues increased 33% to $140.2 million
-- System-wide comparable bakery-cafe sales increased 9.3% in the second quarter
-- 24 bakery-cafes opened in second quarter bringing system-wide bakery-cafes open to 795
-- 2005 full year diluted earnings per share target range narrowed to $1.57 to $1.59
Panera Bread Company (Nasdaq: PNRA) today reported that earnings per diluted share increased 57% to $0.33 for the twelve weeks ended July 12, 2005 compared to $0.21 per diluted share for the twelve weeks ended July 10, 2004. Net income for the twelve weeks ended July 12, 2005 increased 61% to $10,429,000 compared to $6,475,000 for the same period in the prior year.
For the twenty-eight weeks ended July 12, 2005, earnings per diluted share increased 48% to $0.77 compared to $0.52 for the twenty-eight weeks ended July 10, 2004. Net income for the twenty-eight weeks ended July 12, 2005 increased 52% to $24,352,000 compared to $15,969,000 for the twenty-eight weeks ended July 10, 2004.
The following table sets forth, for the periods indicated, certain items included in the Company's consolidated statements of operations (in thousands, except per share data and percentages):
12 Weeks Ended 12 Weeks Ended Percentage
July 12, 2005 July 10, 2004 Increase
Total revenue $140,172 $105,321 33%
Net income $10,429 $6,475 61%
Diluted earnings per share $0.33 $0.21 57%
Shares used in diluted EPS
calculation 31,689 30,771
28 Weeks Ended 28 Weeks Ended Percentage
July 12, 2005 July 10, 2004 Increase
Total revenue $318,320 $235,221 35%
Net income $24,352 $15,969 52%
Diluted earnings per share $0.77 $0.52 48%
Shares used in diluted EPS
calculation 31,531 30,727
All of the Company's key metrics showed strength in the second quarter. System-wide comparable bakery-cafe sales increased 9.3% (7.9% company and 9.9% franchise) resulting in second quarter average weekly sales increasing 7.5% to $37,754. Operating weeks in the second quarter totaled 9,382. During the quarter, the Company opened 24 bakery-cafes (13 company and 11 franchise).
The 131 new bakery-cafes opened system-wide since the end of the 2004 second quarter and robust comparable bakery-cafe sales resulted in revenue growth of 33% in the second quarter. The strong comparable bakery-cafe sales were fueled in part by the Company's roll out of antibiotic-free, all natural chicken and Via Panera. While the success of the chicken has driven comparable bakery-cafe sales, it has also resulted in increased food costs, as the Company priced menu items which contain the chicken to preserve penny profit rather than to maintain its historic margin percentage. Despite this margin pressure, the strength of the Company's key metrics produced record earnings for the second quarter, with net income increasing 61% to $10.4 million and earnings per diluted share increasing 57% to $0.33 per share.
Full Year Business Outlook
The Company now expects fiscal 2005 full year earnings per diluted share of $1.57 to $1.59, an increase of 26% to 27% from 2004 results. The target assumes full year system-wide comparable sales growth at 6.2% to 7.8%, a level somewhat higher than previous targets. The Company has raised its system-wide average weekly sales target for full year 2005 to be in the range of $37,300 to $38,300 and has narrowed its targeted operating weeks to be in the range of 41,300 to 41,400. Although the Company continues to expect bakery-cafe openings in 2005 to range between 150 to 160 (70 company and 80-90 franchise), the Company is experiencing some delays in its scheduled openings that will result in fewer third quarter openings and an increase in the expected number of fourth quarter openings.
Third and Fourth Quarters
The Company is currently targeting third and fourth quarter earnings per diluted share of $0.34 to $0.35 and $0.46 to $0.47, respectively which represents a shift of approximately $0.01 between the third and fourth quarters as a result of the aforementioned shift in bakery-cafe openings. These targets assume system-wide comparable bakery-cafe sales increases of 6.5% to 8.0% in the third quarter and 2.5% to 4.0% in the fourth quarter. The Company now expects system-wide comparable bakery-cafe sales growth for the four weeks ending August 9, 2005 will be 8.3% to 8.8%. The Company is targeting third quarter system-wide average weekly sales of $37,100 to $38,100 and expects operating weeks in the range of 9,700 to 9,750. Bakery-cafe openings in the third quarter are targeted at 28 (9 company and 19 franchise). Bakery-cafe openings in the fourth quarter are therefore expected to be significantly higher, and to occur later in the fourth quarter in 2005, compared to 2004, resulting in increased costs in the fourth quarter. The shift in store openings will pressure operating margins due to the impact of opening inefficiencies (costs), as company bakery-cafe openings are now expected to be 31 in the fourth quarter of 2005 compared to 15 in the fourth quarter of 2004. As previously stated, the Company also expects to have one- time market research expenses of approximately $2.0 million in the fourth quarter of 2005.
Ron Shaich, chairman and chief executive officer commented, "We are pleased with our performance in the second quarter and first half of 2005. These record results were driven by our ongoing roll-out of the Panera concept and by the very strong comparable bakery-cafe sales growth we have experienced. We expect our second half results will show continued strength in development and higher than originally targeted system-wide comparable sales growth. However the shift in sales mix from the greater than anticipated success of the antibiotic-free, all natural chicken products and continued higher than expected fuel costs will continue to pressure our food and paper costs. Additionally, delays we are experiencing in our development schedule will shift certain costs between the third and fourth quarters and result in fewer operating weeks. Despite these changes, we expect to achieve our targeted earnings per diluted share range for the year, which we have today narrowed to $1.57 to $1.59, an increase of 26% to 27% compared to 2004 results."
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| Last: |
63.04 |
| Time: |
6/9/2006 4:00pm |
| Change: |
+0.42 |
| Opened: |
62.50 |
| Day: |
63.85 - 62.45 |
| Volume: |
548988 |
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