Panera Bread Company (NASDAQ:PNRA)

CAPS Rating: 4 out of 5

Company deals in meeting consumer dining needs by providing high quality food, including fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other cafe beverages.


Player Avatar TMF1000 (99.72) Submitted: 9/23/2011 11:47:42 AM : Outperform Start Price: $110.31 PNRA Score: -33.01

Panera was added on Caps at $110.31 - the PE ratio is 26.14

The Company has 1493 restaurants which include 703 company-owned stores and 790 franchised. They opened 47 new bakery cafes in the first half of the year. This is one reason capital expenditures went up. But these new unit average weekly sales were 43,449 year to day which is up from last year. New units that are franchised units had average weekly sales of 44,550 up 13% from last year. They plan on opening 100 to 100 units in 2012. Analysts believe they can build over 3,000 restaurants so there is plenty of room for growth. There are definitely no signs of cannibalization yet.

The last report was excellent. Earnings per share were $1.18 up 38.8% from $0.85 last year. TTM earnings were $4.22 up 30.7% from $3.23. The PE ratio is 26.14.

Commodity prices were higher when that report was announced. With oil prices down to $79 a barrel, energy expenses will be down, plus food commodities are going down too which should make for a better 3Q report. Food commodity prices are still higher than last year, but lower than last quarter.

The next report will be reported at the end of October and it should be a good report. They have a lot of growth potential and they have grown their store base without debt. They have $236 million in cash and no debt.

They have similar growth potential as CMG but the valuation is much better.

I added to my Panera position twice in my portfolio this year, once at $121 and once at $101. I think those prices will prove cheap in the years ahead.

I also think beside the growth of their store base, they can take market share, by expanding their menu into bakery goods that in time could create more streams of revenues. The growth areas in which they could expand are numerous. It may not happen until store base growth slows, but in time, they could expand into bakery goods. Their size would give them many economy of scale advantages.

Member Avatar dstwhit (71.27) Submitted: 9/23/2011 5:00:51 PM
Recs: 2

"They plan on opening 100 to 100 units in 2012."

That doesn't give them much wiggle room, does it! ;)

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