PNRA-Postive or Negative Updated Guidance
The first part of the release states:
ST. LOUIS, June 17 /PRNewswire-FirstCall/ -- Panera Bread Company (Nasdaq: PNRA - News) today announced that it is increasing its fiscal second quarter 2008 earnings per diluted share target to $0.48 to $0.50 from its previously announced target of $0.40 to $0.44 per diluted share. The increase is driven by projected company-owned comparable bakery-cafe sales growth of 6.1% to 6.4% (versus its previously targeted range of 5% to 6%), and better than expected margin improvement on higher growth in gross profit per transaction.
But it goes on to state:
The Company also announced that with the continuing rise in gasoline prices, the Company expects an incremental $(0.02) to $(0.03) per diluted share of negative impact on the previously announced earnings per diluted share target range for the second half of 2008.
This is very interesting....on its face things look really good, earnings are going to beat in Q2 by about $0.08 cents per share. Not only that, revenues are better than expected.....very good results in the current environment.
However, what is really interesting is that they are lowering 2nd half earnings guidance already due to rising gasoline prices. What is not mentioned is second half revenues. You would think if revenue trends were still trending positive, they would also raise second half revenue estimates.
Based on the fact that they beat by so much in Q2, and they are lowering for the second half.......sales and margins seem to be deteriorating from the beginning of the quarter to the end.
Further, the company seems to be concerned about rising commodity prices going forward. Clearly the performance in Q2 was very good.....but like many other businesses, the second half seems to be a challenge.