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Panera Bread Company Reports Operating Results (10-Q)

May 07, 2010 | About:
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10qk

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Panera Bread Company (PNRA) filed Quarterly Report for the period ended 2010-03-30.

Panera Bread Company has a market cap of $2.39 billion; its shares were traded at around $75 with a P/E ratio of 24.2 and P/S ratio of 1.9. Panera Bread Company had an annual average earning growth of 26.3% over the past 10 years. GuruFocus rated Panera Bread Company the business predictability rank of 4-star.PNRA is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Ron Baron of Baron Funds, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

For the thirteen weeks ended March 30, 2010, we earned $0.82 per diluted share with the following performance on key metrics: system-wide comparable bakery-cafe sales grew 9.5 percent (10.0 percent for Company-owned bakery-cafes and 9.2 percent for franchise-operated bakery-cafes); system-wide average weekly sales increased 9.2 percent to $41,948 ($41,040 for Company-owned bakery-cafes and $42,620 for franchise-operated bakery-cafes); and eight new bakery-cafes opened system-wide (three Company-owned bakery-cafes and five franchise-operated bakery-cafes).

For the thirteen weeks ended March 31, 2009, we earned $0.57 per diluted share with the following performance on key metrics: comparable bakery-cafe sales decreased 0.5 percent for Company-owned bakery-cafes and increased 0.9 percent for franchise-operated bakery-cafes, resulting in system-wide comparable bakery-cafe sales growth of 0.3 percent; system-wide average weekly sales decreased 0.1 percent to $38,423 ($37,380 for Company-owned bakery-cafes and $39,190 for franchise-operated bakery-cafes); 14 new bakery-cafes opened system-wide, including four Company-owned bakery-cafes and ten franchise-operated bakery-cafes; and four bakery-cafes closed system-wide, including two Company-owned bakery-cafes and two franchise-operated bakery-cafes.

Bakery-cafe sales for the thirteen weeks ended March 30, 2010 increased 14.5 percent to $312.5 million compared to $272.9 million for the thirteen weeks ended March 31, 2009. The increase in bakery-cafe sales for the thirteen weeks ended March 30, 2010 compared to the same period in 2009 was primarily due to the opening of 29 new Company-owned bakery-cafes since March 31, 2009 and to the 10.0 percent increase in Company-owned comparable bakery-cafe sales for the thirteen weeks ended March 30, 2010. This 10.0 percent growth in comparable bakery-cafe sales was driven by approximately 3.5 percent of transaction growth and approximately 6.5 percent average check growth. Average check growth, in turn, was comprised of retail price increases of approximately 2.0 percent and positive mix impact of approximately 4.5 percent in comparison to the same period in the prior year. In total, Company-owned bakery-cafe sales as a percentage of total revenues increased to 85.8 percent for the thirteen weeks ended March 30, 2010 as compared to 85.1 percent for the same period in 2009. In addition, the increase in average weekly sales for Company-owned bakery-cafes for the thirteen weeks ended March 30, 2010 compared to the same period in 2009 was due to an increase in transactions and average check growth. The average weekly sales per Company-owned bakery-cafe and the number of operating weeks for the periods indicated were as follows:

General and administrative expenses were $25.0 million, or 6.9 percent of total revenues, for the thirteen weeks ended March 30, 2010 compared to $20.4 million, or 6.4 percent of total revenues, for the thirteen weeks ended March 31, 2009. The increase in general and administrative expenses as a percent of total revenues was primarily due to investments made in our marketing infrastructure and as a result of higher incentive compensation expense compared to the prior year driven by our performance in 2010 exceeding original targets, partially offset by improved leverage of our expenses from higher sales.

Cash and cash equivalents were $305.1 million at March 30, 2010, compared with $246.4 million at December 29, 2009. This increase was primarily a result of $55.9 million of cash generated from operations, $10.1 million received from the exercise of employee stock options, and $2.8 million received from a tax benefit from the exercise of stock options, partially offset by the $10.5 million used on capital expenditures during the thirteen weeks ended March 30, 2010. Our primary source of liquidity is cash provided by operations, although we have also borrowed under a credit facility principally to finance repurchases of our common stock. Historically, our principal requirements for cash have primarily resulted from our capital expenditures for the development of new Company-owned bakery-cafes, for maintaining or remodeling existing Company-owned bakery-cafes, for purchasing existing franchise-operated bakery-cafes or ownership interests in other restaurant or bakery-cafe concepts, for developing, maintaining or remodeling fresh dough facilities, and for other capital needs such as enhancements to information systems and other infrastructure.

We had working capital of $225.4 million at March 30, 2010 compared to $179.8 million at December 29, 2009. The increase in working capital from December 29, 2009 to March 30, 2010 resulted primarily from the previously described increase in cash and cash equivalents of $58.7 million and an increase in trade accounts receivable, net of $1.9 million, partially offset by an increase in accrued expenses of $9.6 million, and a decrease in other accounts receivable of $3.8 million. We believe that our cash flow from operations and available borrowings under our existing credit facility will be sufficient to fund our cash requirements for the foreseeable future.

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