ST. LOUIS, MO--(Marketwired - February 11, 2015) - Panera Bread Company (NASDAQ: PNRA)
- Q4 2014 Company-owned comparable net bakery-cafe sales up 3.3%
- Q4 2014 Company-owned comparable net bakery-cafe transactions up 1.3%
- During FY 2014, 114 new bakery-cafes opened system-wide
Panera Bread Company (NASDAQ: PNRA) today reported net income of $48 million, or $1.82 per diluted share, for the thirteen weeks ended December 30, 2014. Diluted EPS for fiscal Q4 2014 was up 2% versus fiscal Q4 2013, excluding a goodwill impairment charge recorded in fiscal Q4 2014 of $2.1 million, or $0.05 per diluted share, and excluding the estimated $0.13 per diluted share benefit in fiscal Q4 2013 from the additional operating week. For the fourteen weeks ended December 31, 2013, the Company reported net income of $54 million, or $1.96 per diluted share. A reconciliation of GAAP and non-GAAP information is attached to this release as Schedule V.
For the fifty-two weeks ended December 30, 2014, net income was $179 million, or $6.64 per diluted share. Diluted EPS for full year fiscal 2014 was up $0.03 per diluted share, compared to full year fiscal 2013, when excluding certain items for both full year fiscal 2014 and fiscal 2013, as outlined on Schedule V. For the fifty-three weeks ended December 31, 2013, the Company reported net income of $196 million, or $6.81 per diluted share. A reconciliation of GAAP and non-GAAP information is attached to this release as Schedule V.
The Company's fiscal Q4 2014 and full year fiscal 2014 consolidated statements of comprehensive income and margin analyses are attached to this release as Schedule I. The following tables set forth, for the periods indicated, certain items included in the Company's consolidated statements of comprehensive income (in thousands, except per share data and percentages):
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In fiscal Q4 2014, on a calendar basis, Company-owned comparable net bakery-cafe sales increased 3.3%, franchise-operated comparable net bakery-cafe sales increased 2.7%, and system-wide comparable net bakery-cafe sales increased 3.0% compared to the same period in fiscal 2013.
The Company-owned comparable net bakery-cafe sales increase of 3.3% on a calendar basis in fiscal Q4 2014 was comprised of year-over-year transaction growth of 1.3% and average check growth of 2.0%.
For the full year fiscal 2014, on a calendar basis, Company-owned comparable net bakery-cafe sales increased 1.4%, franchise-operated comparable net bakery-cafe sales increased 0.9%, and system-wide comparable net bakery-cafe sales increased 1.1% compared to fiscal 2013.
The Company believes that the calendar basis comparison better reflects the performance of the business as it eliminates the impact of the extra week in fiscal 2013 and compares consistent calendar weeks. Note that on a fiscal basis, Company-owned comparable net bakery-cafes sales for fiscal Q4 2014 decreased 4.0% and for full year fiscal 2014 decreased 0.3%. A schedule of comparable net bakery-cafe sales information is attached to this release as Schedule III.
In fiscal Q4 2014, the Company experienced a decline in operating margin of approximately 140 basis points compared to fiscal Q4 2013. This decline was primarily the result of food cost inflation, as well as the cost of initiatives designed to make Panera a better competitive alternative and to enable expanded growth through Panera 2.0; innovation in operations, food and marketing; delivery hubs; and our investments in technology to create the capabilities needed to support these initiatives.
During fiscal Q4 2014, the Company opened 26 new bakery-cafes and its franchisees opened 14 new bakery-cafes. For the full year fiscal 2014, the Company and its franchisees opened 114 new bakery-cafes (65 Company-owned and 49 franchise-operated). As a result, there were 1,880 bakery-cafes open system-wide as of December 30, 2014.
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Average weekly sales ("AWS") for Company-owned "Class of 2014" bakery-cafes for full year fiscal 2014 was $44,986 compared to $44,084 in full year fiscal 2013. AWS for franchise-operated "Class of 2014" bakery-cafes for full year fiscal 2014 was $48,881 compared to $46,948 for full year fiscal 2013.
A schedule of fiscal Q4 2014 and full year fiscal 2014 AWS, including AWS information for bakery-cafes based on their designation as either a traditional or non-traditional bakery-cafe, is attached to this release as Schedule II. Non-traditional bakery-cafes refers to a range of alternate formats that the Company believes will allow it to more deeply penetrate existing and new territories with a range of different formats.
During fiscal Q4 2014, the Company repurchased 149,877 shares at an average price of $166.77 per share for an aggregate purchase price of approximately $25.0 million. During full year fiscal 2014, the Company repurchased a total of 941,878 shares at an average price of $163.62 per share for an aggregate purchase price of approximately $154.1 million. The Company has approximately $533.4 million available under the current $600 million repurchase authorization as of the date of this release.
The Company is releasing supplemental information, attached to this release as Schedule IV, detailing the performance of Company-owned bakery-cafes converted to Panera 2.0, a strategic initiative designed to enhance the customer experience that is enabled by technology and operational improvements.
The number of moving pieces in fiscal 2015 makes it difficult to provide precise guidance. The Company is targeting full year fiscal 2015 diluted earnings per share growth of flat to down mid- to high-single digits when compared to full year fiscal 2014 (comparative diluted earnings per share for full year fiscal 2014 excludes certain items as outlined on Schedule V).
The full year fiscal 2015 diluted earnings per share target range is based on the following key assumptions:
The Company is targeting Company-owned comparable net bakery-cafe sales growth for fiscal 2015 of 2.0% to 3.5%.
The Company announced today that Company-owned comparable net bakery-cafe sales in the first 42 days of fiscal Q1 2015 were up approximately 2.8%.
The Company's fiscal 2015 diluted earnings per share target range assumes operating margin will be down 100 to 175 basis points when compared to fiscal 2014. The anticipated decline in year-over-year margin reflects the cost of previously mentioned initiatives designed to make Panera a better competitive alternative and to enable expanded growth, along with higher medical costs due to the Affordable Care Act (ACA) and higher labor costs due to the impact of increases in minimum wage rates.
The Company's fiscal 2015 new bakery-cafe target is 105 to 115 system-wide bakery-cafe openings and the average weekly net sales performance target for new Company-owned bakery-cafes is $43,000 to $45,000.
Ron Shaich, Chairman and CEO, commented, "Our transaction growth of 1.3% in Q4 -- our third straight quarter of transaction growth and second straight quarter of growth above 1% -- speaks to the progress we continue to make in our efforts to bend the arc of transaction and comp growth in our core business. Our sharpened focus on operations, food innovation and marketing innovation continues to drive that momentum."
Shaich continued, "We also are beginning to see initial results from the structural enhancements we have been rolling out throughout 2014. These enhancements, including Panera 2.0, operational integrity, and delivery hubs, are intended to upgrade our guest experience, improve throughput and accuracy, and allow us to grow, especially in the large order delivery business. We continue to expect the rollout of these enhancements to adversely impact our 2015 results, but we believe they offer the potential to elevate Panera's competitive position and broaden our growth opportunities, which we believe, in turn, will lead to expanded medium- and long-term earnings growth."
The Company will host a conference call that will be broadcast on the Internet at 8:30 A.M. Eastern Time on Thursday, February 12, 2015, to discuss the fiscal Q4 2014 results, preliminary comparable net bakery-cafe sales results for the first 42 days of fiscal Q1 2015, full year targets and business outlook for fiscal 2015, and an update on the Panera 2.0 initiative. Given an expanded focus on the Panera 2.0 initiative during the conference call, time available for questions may be limited. To access the call or view a copy of this release, go to http://www.panerabread.com/investor. Access to the call will be made available for 14 days, and the release will be archived for one year.
The Company includes in this release information on Company-owned, franchise-operated, and system-wide comparable net bakery-cafe sales percentages. Company-owned comparable net bakery-cafe sales percentages are based on net sales from Company-owned bakery-cafes included in base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchised bakery-cafes, as reported by franchisees, that are included in base store bakery-cafes. Acquired Company-owned and franchise-operated bakery-cafes and other restaurant or bakery-cafe concepts are included in the Company's comparable net bakery-cafe sales percentages after it has acquired a 100 percent ownership interest and if such acquisition occurred prior to the first day of the Company's prior fiscal year. Comparable net bakery-cafe sales exclude closed locations.
The Company does not record franchise-operated net bakery-cafe sales as revenues. However, royalty revenues are calculated based on a percentage of franchise-operated net bakery-cafe sales, as reported by franchisees. The Company uses franchise-operated and net system-wide sales information internally in connection with store development decisions, planning, and budgeting analyses. The Company believes franchise-operated and net system-wide sales information is useful in assessing consumer acceptance of its brand; facilitates an understanding of its financial performance and the overall direction and trends of sales and operating income; helps the Company appreciate the effectiveness of its advertising and marketing initiatives which its franchisees also contribute based on a percentage of their net sales; and provides information that is relevant for comparison within the industry.
As of December 30, 2014, there were 1,880 bakery-cafes in 45 states, the District of Columbia, and in Ontario, Canada operating under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Café® names. We feature high quality, reasonably priced food in a warm, inviting, and comfortable environment. With our identity rooted in handcrafted, fresh-baked, artisan bread, we are committed to providing great tasting, quality food that people can trust. Nearly all of our bakery-cafes have a menu highlighted by chicken raised without antibiotics, whole grain bread, and select organic and all-natural ingredients, with zero grams of artificial trans-fat per serving, which provide flavorful, wholesome offerings. Our menu includes a wide variety of year-round favorites complemented by new items introduced seasonally with the goal of creating new standards in everyday food choices. In neighborhoods across the United States and in Ontario, Canada, our customers enjoy our warm and welcoming environment featuring comfortable gathering areas, relaxing decor, and free Internet access. Our bakery-cafes routinely donate bread and baked goods to community organizations in need. Additional information is available on our website, http://www.panerabread.com.
Matters discussed in this news release and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, express or implied, on our anticipated growth, operating results, plans, objectives, future earnings per share, and the impact of our investments in sales-building initiatives and operational capabilities on future sales and earnings, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are often identified by the words "believe," "positioned," "estimate," "project," "target," "plan," "goal," "assumption," "continue," "intend," "expect," "future," "anticipate," and other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict, and you should not place undue reliance on our forward-looking statements. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those discussed from time to time in our reports filed with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended December 31, 2013 and our quarterly reports on Form 10-Q. All forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this release are made only as of the date of this release and may change. While we may elect to update forward-looking statements at some point in the future, we expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
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The Company's fiscal year ended December 30, 2014 consisted of 52 weeks, while the Company's fiscal year ended December 31, 2013 consisted of 53 weeks. As a result, the Company's results for the fiscal fourth quarter ended December 31, 2013 include an additional week as compared to the fiscal fourth quarter ended December 30, 2014.
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The Company's fiscal year ended December 30, 2014 consisted of 52 weeks, while the Company's fiscal year ended December 31, 2013 consisted of 53 weeks. As a result, the Company's results for the fiscal year ended December 31, 2013 include an additional week as compared to the fiscal year ended December 30, 2014.
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The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company's consolidated statements of comprehensive income for the period indicated. Percentages may not add due to rounding:
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The Company's fiscal year ended December 30, 2014 consisted of 52 weeks, while the Company's fiscal year ended December 31, 2013 consisted of 53 weeks. As a result, the Company's results for the fiscal fourth quarter ended December 31, 2013 include an additional week as compared to the fiscal fourth quarter ended December 30, 2014.
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The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company's consolidated statements of comprehensive income for the period indicated. Percentages may not add due to rounding:
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(1) As a percentage of net bakery-cafe sales.
(2) As a percentage of fresh dough and other product sales to franchisees.
The Company's fiscal year ended December 30, 2014 consisted of 52 weeks, while the Company's fiscal year ended December 31, 2013 consisted of 53 weeks. As a result, the Company's results for the fiscal year ended December 31, 2013 include an additional week as compared to the fiscal year ended December 30, 2014.
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The Company's fiscal year ended December 30, 2014 consisted of 52 weeks, while the Company's fiscal year ended December 30, 2013 consisted of 53 weeks. As a result, the Company's results for the five weeks, 14 weeks, and 53 weeks ended December 31, 2013 included an additional week, with an impact of approximately $28.3 million and $30.5 million of sales in the additional week for Company-owned and franchise-operated base store bakery-cafes, respectively. Accordingly, the Company believes it is appropriate to provide the following two measures of comparable net bakery-cafe sales for fiscal 2014: calendar basis and fiscal basis.
Calendar Basis
Set forth below is comparable net bakery-cafe sales growth information comparing consistent calendar weeks in fiscal 2014 to fiscal 2013:
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Fiscal Basis
Set forth below is comparable net bakery-cafe sales growth information comparing the fiscal 2014 periods to comparable periods in fiscal year 2013, which include an additional week due to the Company's 53-week fiscal year in 2013:
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The schedule below details certain operating metrics for base Company-owned bakery-cafes converted to the Panera 2.0 format as of December 30, 2014. Panera 2.0 is our strategic initiative designed to enhance the customer experience that is enabled by technology and operational improvements. The operating metrics are grouped by timing of conversion ("iteration") with a reference to the relevant geographic markets also noted. Reference is also given to key features of the bakery-cafe conversion for each iteration. The operating metrics presented in this schedule, as defined in the footnotes below, reflect certain components of the items presented in the Company's consolidated statements of comprehensive income, included in this release as Schedule I.
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The Company uses diluted earnings per share excluding certain items as a key performance measure of results of operations for purposes of evaluating performance internally. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of results excluding certain items provides additional information to facilitate the comparison of past and present operations, excluding items that the Company does not believe were indicative of our ongoing operations in the 13 and 52 weeks ended December 30, 2014 and the 14 and 53 weeks ended December 31, 2013.
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SOURCE Panera Bread
Steve West
Vice President of Investor Relations
Steve.West@panerabread.com
Panera Bread bakery-cafes feature high quality, reasonably priced food in a warm, inviting and comfortable environment.