Panera Rising: How Much Room to Grow Is There in Fast-Casual?

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It’s been a bumpy ride for Panera Bread (NYSE:PNRA) shareholders over the past few days — hell, it’s been a pretty bump year for the restaurant chain. Shares are set to close the five-day period down nearly 9 percent, and as of Thursday’s close, the stock was off about 3.8 percent year to date. The decline has been anything but consistent. The stock tripped into January at about $176, sank as low as $164 before climbing to a near 52-week high above $190, and is now, at the end of March, back below where it started.

Here’s what’s been going on. In February, Panera posted mixed fourth-quarter and full-year results. Fourth-quarter earnings increased 12 percent on the year to $1.96 per share, spurred by both strong performance and $139 million in share repurchases during the quarter. Revenue increased 16 percent to $661.7 million as comparable-store sales increased 1.7 percent. For the year, earnings increased 16 percent to $6.81 per share, beating the mean analyst estimate of $6.66. Revenue increased 12 percent to $2.39 billion, in line with analyst expectations, and systemwide same-store sales increased 2.3 percent for the year.

Comparable-store sales growth was somewhat soft, which put some investors on edge, and first-quarter guidance came in below expectations at the time. Looking ahead to the first quarter of 2014, Panera is targeting earnings in a range between $1.49 and $1.55 per share, well below the current mean analyst estimate of $1.70 per share. For the year, Panera is estimating earnings in a range between $6.80 and $7.05 per share, below the current mean analyst estimate of $7.31 per share. The company is targeting full-year comparable-store sales growth in a range between 2 and 4 percent.

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