Panera Bread: Diluted EPS in Q1/2013 climbs 17 percent

St. Louis / MO. (pbc) Panera Bread Company reported net income of 48 million USD or 1,64 USD per diluted share, for the fiscal first quarter ended March 26, 2013. The first quarter fiscal 2013 results compare to net income of 41 million USD or 1,40 USD per diluted share, for the fiscal first quarter ended March 27, 2012 and represent a 17 percent year-over-year increase in diluted earnings per share. The first quarter fiscal 2013 results include a 2,2 million USD or 0,05 USD per diluted share, benefit from resolution of legal and tax matters. Overview:

  • Q1 2013 Company-owned comparable net bakery-cafe sales up 3,3 percent, despite 100 to 150 basis points of unfavourable weather impact
  • April 2013 (27 days to date) Company-owned comparable net bakery-cafe sales up 5,0 percent
  • Q1/2013 Revenue increased 13 percent to 562 million USD
  • Q2/2013 EPS target of 1,74 USD to 1,78 USD (up 16 percent to 19 percent versus Q2 2012)
  • FY 2013 EPS growth target maintained at 17 percent to 19 percent versus FY 2012

Comparable Net Bakery-Cafe Sales Growth

In the first quarter fiscal 2013, Company-owned, franchise-operated and system-wide comparable net bakery-cafe sales each increased 3,3 percent compared to the comparable period in fiscal 2012. Two year Company-owned comparable net bakery-cafes sales increased 10,8 percent, two year franchise-operated comparable net bakery-cafe sales increased 8,5 percent and two year system-wide comparable net bakery-cafe sales increased 9,6 percent. The Company-owned comparable net bakery-cafe sales increase of 3,3 percent in the first quarter fiscal 2013 was comprised of year-over-year average check growth of 5,7 percent and transaction decline of 2,4 percent. Further, within the quarter, comparable net bakery-cafe sales at Company-owned bakery-cafes were up 5,4 percent in January, up 0,8 percent in February and up 4,6 percent in March. This performance was adversely affected by severe weather throughout the United States in February and then severe weather in March that directly impacted the Midwest, including our St. Louis market, which we believe resulted in 100 to 150 basis points of unfavourable impact on the quarter overall.

Operating Margin

In the first quarter fiscal 2013, the Company generated operating margin improvement of approximately ten basis points compared to the first quarter fiscal 2012. This increase was driven primarily by lower general and administrative expenses as a percentage of total revenues and improved margins on fresh dough and other product sales to franchisees.

New Bakery-Cafe Development and AWS

During the first quarter fiscal 2013, the Company opened 10 new bakery-cafes and its franchisees opened 12 new bakery-cafes. As a result, there were 1’673 bakery-cafes open system-wide as of March 26, 2013. Average weekly sales (“AWS”) for Company-owned new bakery-cafes through the first quarter fiscal 2013 were 61’912 USD compared to 51’331 USD in the same period of fiscal 2012. AWS for franchise-operated new bakery-cafes through the first quarter fiscal 2013 were 51’543 USD compared to 47’982 USD in the same period of fiscal 2012.

Use of Capital

During the first quarter fiscal 2013, the Company repurchased 122’700 shares at an average price of 162,84 USD per share for an aggregate purchase price of 20 million USD. The share repurchase had a nominal impact on the Company´s first quarter fiscal 2013 earnings per diluted share. The Company has approximately 560 million USD available under its existing 600 million USD repurchase authorization as of today.

Second Quarter Fiscal 2013 Outlook

Diluted EPS Target: The Company´s second quarter fiscal 2013 diluted earnings per share target assumes earnings per diluted share of 1,74 USD to 1,78 USD, which would represent an increase of 16 percent to 19 percent in the second quarter fiscal 2013 versus the comparable period in fiscal 2012. The second quarter fiscal 2013 diluted earnings per share target includes the following key assumptions:

Comparable Net Bakery-Cafe Sales Growth: The range for the Company´s second quarter fiscal 2013 Company-owned comparable net bakery-cafe sales growth is targeted at 4,0 percent to 5,0 percent versus the comparable period in fiscal 2012. The Company announced today Company-owned comparable net bakery-cafe sales in the first 27 days of the second quarter fiscal 2013 were up approximately 5,0 percent.

Operating Margin Target: In the second quarter fiscal 2013, the Company anticipates its operating margin will be 25 to 75 basis points favourable on a year-over-year basis, primarily due to higher margins on fresh dough and other product sales to franchisees and improved leverage of general and administrative expenses.

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