5 Numbers Behind Panera Bread Co (PNRA)’s Rise

Page 1 of 2

Panera Bread Co (NASDAQ:PNRA) is on the rise. The company recently reported earnings for the fourth quarter. And judging by the market’s reaction, investors were happy with the results.

After the earnings announcement, the stock jumped by 3% before settling down to end with a 1% gain on the day. And that quick bump is just part of the more than 300% rise that shares have seen over the past five years.

Panera Bread Co (NASDAQ:PNRA)Panera’s headline numbers showed solid growth in the quarter, with earnings up 34% on a 15% boost in revenue. But, as usual, the headline numbers don’t tell the whole story. Here are the five numbers that I think really explain why Panera’s results have been so solid.

1). 5.1%: First, Panera’s comparable-store sales leapt by just over 5% in the quarter. That was enough to trounce McDonald’s Corporation (NYSE:MCD) flat growth, and to handily beat Yum! Brands, Inc. (NYSE:YUM)‘s 3% rise. It was also better than highflier Chipotle Mexican Grill, Inc. (NYSE:CMG) could manage. The Tex-Mex chain booked just 3.8% sales growth over the same period. Panera got to its industry-thumping growth figure through a mix of both price increases and higher check averages. Menu prices kicked in about 2.5% of the boost, but the rest came from customers upgrading their orders to more expensive items.

2). $47,029: Panera’s new stores are getting more productive. The average weekly sales figure for the 59 new company-owned cafes Panera opened last year set an all-time record at over $47,000. That’s a 13% bounce for the company’s 2012 graduating class, up from the prior-year’s figure of about $41,000. Those rocketing weekly sales numbers were helped along by the eight new cafes Panera opened in urban areas, including Manhattan, Boston, and Toronto. Considering the quick success it’s had in densely populated areas, this could represent a key growth avenue in the years ahead.

3). $75,000: Panera’s customer demographic skews toward much higher average income than most casual-dining restaurants can claim. During the conference call with analysts, co-CEO Ron Shaich said that that fact gave the company flexibility over competitors like McDonald’s and Chipotle, which have to constantly balance their prices against food cost inflation. Where its rivals need to fight over shaving pennies from value meals, Panera doesn’t suffer from those same pressures. That also opens the company up for experimenting with bigger and more expensive menu options. For example, Panera plans to roll out an entirely new menu category this quarter which could boost check averages even higher: pasta.

4). 29.3%: Food costs clocked in at less than 30% in the quarter, or exactly the same percentage of sales that Panera booked in the year-ago quarter. Thanks to the fact that the company supplies key ingredients to cafes through its own network of bakeries, Panera has a lock on its food costs like few restaurants do. Yum! Brands, for example, blamed commodity inflation for the slight deterioration in is restaurant level margins in the quarter. And Chipotle saw its own food costs rocket to over 33% of sales recently. While rivals are feeling the pinch of cost inflation, flat cost growth gives Panera even more flexibility on promotions and pricing changes.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!