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Restaurant Industry News
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Sunday June 11th, 2006 |
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Panera Bread Reports 36% Increase in Third Quarter Net Income and Raises 2005 Target
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Third quarter net income increased 36% to $11.7 million |
Click here for financial tables
-- Third quarter net income increased 36% to $11.7 million
-- Third quarter earnings per diluted share increased 32% to $0.37
-- Third quarter revenues increased 31% to $148.6 million
-- System-wide comparable bakery-cafe sales increased 8.2% in the third quarter
-- 30 bakery-cafes opened in third quarter bringing system-wide bakery- cafes open to 825
-- Fiscal 2005 EPS target raised to $1.62 to $1.63
-- Fiscal 2006 EPS target established at $1.97 to $2.01 (before options expense)
Panera Bread Company (NASDAQ:PNRA) today reported that earnings per diluted share increased 32% to $0.37 for the twelve weeks ended October 4, 2005 compared to $0.28 per diluted share for the twelve weeks ended October 2, 2004. Net income for the twelve weeks ended October 4, 2005 increased 36% to $11,669,000 compared to $8,568,000 for the same period in the prior year.
For the forty weeks ended October 4, 2005, earnings per diluted share increased 43% to $1.14 compared to $0.80 for the forty weeks ended October 2, 2004. Net income for the forty weeks ended October 4, 2005 increased 47% to $36,021,000 compared to $24,537,000 for the forty weeks ended October 2, 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 12 Weeks
Ended Ended
October 4, October 2, Percentage
2005 2004 Increase
Total revenue $148,626 $113,772 31%
Net income $11,669 $8,568 36%
Diluted earnings per share $0.37 $0.28 32%
Shares used in diluted EPS calculation 31,679 30,796
40 Weeks 40 Weeks
Ended Ended
October 4, October 2, Percentage
2005 2004 Increase
Total revenue $466,946 $348,993 34%
Net income $36,021 $24,537 47%
Diluted earnings per share $1.14 $0.80 43%
Shares used in diluted EPS calculation 31,574 30,740
Third Quarter Business Review
All of the Company's key metrics showed strength in the third quarter. System-wide comparable bakery-cafe sales increased 8.2% (7.2% company and 8.6% franchise) resulting in third quarter average weekly sales increasing 7.5% to $38,342. Operating weeks in the third quarter totaled 9,722. During the quarter, the Company opened 30 bakery-cafes (10 company and 20 franchise).
The 127 new bakery-cafes opened system-wide since the end of the 2004 third quarter and continued strong comparable bakery-cafe sales resulted in revenue growth of 31% in the third quarter. The strength of the key metrics produced record earnings in the quarter with net income increasing 36% to $11.7 million or $0.37 per diluted share.
Business Outlook
Fourth Quarter and Full Year 2005
The Company today raised its fourth quarter 2005 earnings per diluted share target to be $0.48 to $0.49. If this target is accomplished it would result in fiscal 2005 full year earnings per diluted share of $1.62 to $1.63, an increase of 30% from 2004 results. The fourth quarter target assumes fourth quarter system-wide comparable bakery-cafe sales growth of 5.25% to 5.75% which is significantly higher than the Company's prior fourth quarter 2005 comp target of 2.5% to 4.0%. The Company has raised its fourth quarter comp target based on its present expectation that comparable bakery-cafe sales for the first four week period of quarter four (4 weeks ending November 1, 2005) will be in the range of 7.7% to 8.2%. The Company expects fourth quarter system-wide average weekly sales of $39,400 to $40,400 and expects operating weeks in the range of 10,150 to 10,200. The Company expects new bakery-cafe openings in the fourth quarter will be 54 (24 company and 30 franchise), a reduction from its prior target. The Company adjusted its fourth quarter opening target as a result of delays in certain of its scheduled openings.
2006
The Company is today establishing its initial target for fiscal 2006 earnings per diluted share at $1.97 to $2.01. This 2006 EPS target is stated prior to implementation of SFAS No.123R, "Share Based Payment," which requires the Company to begin expensing stock options in fiscal 2006. The Company anticipates the impact of expensing options in 2006 will lower EPS by $0.12 to $0.13 in 2006, resulting in targeted EPS for 2006 in the range of $1.84 to $1.89 inclusive of option expense. The Company anticipates it will adopt SFAS 123R prospectively. The impact of option expense in prior years, as reported under SFAS 123 in the footnotes to the Company's financial statements, is estimated to be $0.15 per share in 2005, and was $0.10, $0.06, and $0.05 in 2004, 2003 and 2002, respectively.
The assumptions on key metrics underlying the 2006 target are new bakery-cafe development of 150 to 160 (70 to 75 company and 80 to 85 franchise), comparable bakery-cafe sales growth of 2.5% to 4.5% (equivalent to 2 year comps of approximately 10-12%), average weekly sales of $38,800 to $39,800 and operating weeks of 48,500 to 49,000.
As previously disclosed, the Company will adopt a new fiscal calendar (4-5-4) in 2006 whereby each of its quarters will include 13 weeks, rather than its current calendar which has 16 weeks in the first quarter and 12 weeks in the second, third and fourth quarter. The Company intends to show pro forma results for 2005, in addition to historical results, for quarterly comparisons in 2006.
The Company will discuss third quarter 2005 results in a conference call that will be broadcast on the internet at 8:30 A.M. Eastern Time on Wednesday, November 2, 2005. To access the call or view a copy of this release (when issued), go to http://www.panerabread.com/about_investor.aspx . Access to the call and the release will be archived for one year.
Included in this release are franchisee or system-wide comparable bakery-cafe sales increases and average weekly sales. System-wide sales are a non-GAAP financial measure that includes sales at all Company and franchise bakery-cafes, as reported by franchisees. Management uses system-wide sales information internally in connection with store development decisions, planning and budgeting analyses, and believes it is useful in assessing consumer acceptance of the Company's brand and facilitating an understanding of financial performance as the Company's franchisees pay royalties and contribute to advertising pools based on a percentage of their sales.
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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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