Panera Bread Co (PNRA), The Cheesecake Factory Incorporated (CAKE): Which of These Stocks Will Help You Profit the Most?

Page 1 of 2

The fast-casual restaurant industry’s outlook is not highly positive. Same-store sales are projected to grow in low single digits this year, showing a still sluggish U.S. economy. Many analysts project slower traffic for casual dining restaurants, especially during weekdays. However, bakery-cafes will be less affected since they aim at higher-income families and their pricing maintains good margin levels.

Panera Bread Co (NASDAQ:PNRA)

I will comment on three bakery-cafes to determine which one will be positioned to better profit this year.

A price to consider

Krispy Kreme Doughnuts (NYSE:KKD)
operates as a branded retailer and wholesaler of doughnuts.

The company posted revenue of $120.6 million in its first quarter 2014, up 11.2% year over year. Net income increased 32.7% to $8 million and EPS reached $0.11. These results were driven by good performances in all four of the company’s segments.

Krispy Kreme Doughnuts (NYSE:KKD)’s revenue growth outpaced the industry average of 7.6%, showing bottom line improvements and thus, better earnings per share. In addition, the company has a solid financial position with reasonable debt levels by most measures. Net operating cash flow grew to $14.39 million, up 38.87%, showing the increase in net income.

The company’s strong 37.50% earnings growth plus other driving factors have pushed the stock price up 180% in the past year, surpassing the rise in the S&P 500 during the same period. Year-to-date, the stock has appreciated nearly 90%.

Turnaround for the company, however, is pretty much still in its early stages. Expanding aggressively is what management plans to do by adding stores locally and internationally. Currently, Krispy Kreme Doughnuts (NYSE:KKD) possesses 733 locations in 22 countries, but by adding small freestanding factory shops, the company will increase brand recognition and product availability. Core product offerings are being diversified as well, which should bring more customers and revenue. Plus, more doughnut flavors are under development and high promotional activity is pushing the brand’s beverage business.

Looking to expand

The Cheesecake Factory Incorporated (NASDAQ:CAKE)

operates in the restaurant and bakery businesses.

The company announced an EPS of $0.47 for its first quarter, surpassing the year-ago level by 27%. Revenue reached $463 million, showing a 6.3% increase year over year. Top line and comps growth, along with margin expansion, drove these results.

The Cheesecake Factory Incorporated (NASDAQ:CAKE) is putting a special focus on containing its costs and expanding internationally. Food costs, particularly, have not increased as much for the company throughout this year, which is encouraging. Commodity inflation has moderated on an annualized basis, and management expects it be about 2.5% in fiscal 2013.

Page 1 of 2
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 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!