ST. LOUIS, MO - (Marketwired - April 28, 2015) - Panera Bread Company (NASDAQ: PNRA)
Panera Bread Company (NASDAQ: PNRA) today reported net income of $32 million, or $1.20 per diluted share, for fiscal Q1 2015. Diluted EPS for fiscal Q1 2015 was $1.41 or down 9%, excluding charges recorded in fiscal Q1 2015 related to the Company's refranchising initiative of $8.9 million, $5.6 million after-tax, or $0.21 per diluted share. The fiscal Q1 2015 results compare to net income of $42 million, or $1.55 per diluted share, for fiscal Q1 2014. A reconciliation of GAAP and non-GAAP information is attached to this release as Schedule IV.
As previously announced, the Company is making significant progress on its plan to refranchise 50 to 150 bakery-cafes. The Company has entered into letters of intent to refranchise 73 bakery-cafes and is on track to reach its refranchising goal. Excluding one-time charges, the Company expects the sale of these bakery-cafes to be accretive to ongoing earnings.
The Company's fiscal Q1 2015 consolidated statements of comprehensive income and margin analyses are attached to this release as Schedule I. The following table sets 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), including net income and diluted EPS, excluding charges related to the Company's refranchising initiative, and net income and diluted EPS, as reported:
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In fiscal Q1 2015, Company-owned comparable net bakery-cafe sales increased 1.5%, franchise-operated comparable net bakery-cafe sales decreased 0.1%, and system-wide comparable net bakery-cafe sales increased 0.7% compared to the same period in fiscal 2014.
The Company-owned comparable net bakery-cafe sales increase of 1.5% in fiscal Q1 2015 was comprised of year-over-year transaction growth of 0.1% and average check growth of 1.4%. A schedule of comparable net bakery-cafe sales information is attached to this release as Schedule III.
Operating margin for fiscal Q1 2015 declined approximately 180 basis points versus fiscal Q1 2014, excluding charges related to the Company's refranchising initiative, as outlined in Schedule IV. This decline was primarily the result of structural wage increases and costs related to our strategic initiatives.
During fiscal Q1 2015, the Company opened 11 new bakery-cafes and its franchisees opened 14 new bakery-cafes. As a result, there were 1,901 bakery-cafes open system-wide as of March 31, 2015.
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Average weekly sales ("AWS") for Company-owned "Class of 2015" bakery-cafes through fiscal Q1 2015 was $47,210. AWS for franchise-operated "Class of 2015" bakery-cafes through fiscal Q1 2015 was $53,665.
A schedule of fiscal Q1 2015 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 Q1 2015, the Company repurchased 155,401 shares at an average price of $160.84 per share for an aggregate purchase price of approximately $25.0 million. The Company had approximately $508.4 million available under the $600 million repurchase authorization as of Q1 2015. On April 15, 2015, Panera's Board of Directors approved an increase to the Company's current share repurchase program to $750 million. The Company expects to purchase $500 million of shares within the next twelve months, through a combination of cash on hand, cash flow from operations, and up to $500 million of new debt, taking advantage of the attractive current interest rate environment.
The Company announced today that Company-owned comparable net bakery-cafe sales in the first 27 days of fiscal Q2 2015 were up 2.0%.
The Company today reiterated its full year fiscal 2015 diluted earnings per share growth target of flat to down mid- to high-single digits when compared to full year fiscal 2014, excluding charges in fiscal 2015 for the Company's refranchising initiative and certain items for full year fiscal 2014 as disclosed in our fiscal Q4 2014 earnings release.
The Company reiterated its targeted range for fiscal 2015 Company-owned comparable net bakery-cafe sales growth of 2.0% to 3.5%.
For fiscal 2015, the Company continues to expect operating margin will be down 100 to 175 basis points when compared to fiscal 2014, excluding the impact of charges related to the Company's refranchising initiative.
The Company continues to expect 105 to 115 system-wide new bakery-cafe openings in fiscal 2015 and is maintaining its average weekly net sales performance target for new Company-owned bakery-cafes of $43,000 to $45,000. The Company also continues to expect the conversion of approximately 300 Company-owned bakery-cafes to Panera 2.0 during fiscal 2015.
Ron Shaich, Chairman and CEO, commented, "In the first quarter, we continued to make progress on our initiatives to make Panera a better competitive alternative with expanded growth opportunities. These initiatives include improving the guest experience through Panera 2.0 (inclusive of digital access and improved operational capabilities) and driving consumer excitement through innovation in food, marketing and store design. We are also building capabilities to grow in adjacent businesses, including catering, delivery and consumer products. As expected, these investments negatively impacted first-quarter results; however, our confidence is growing that by making these investments, we can increase the potential to reignite significant earnings growth for years to come."
The Company will host a conference call that will be broadcast on the Internet at 8:30 A.M. Eastern Time on Wednesday, April 29, 2015 to discuss the fiscal Q1 2015 results, preliminary comparable net bakery-cafe sales results for the first 27 days of fiscal Q2 2015, and earnings targets and business outlook for the full year fiscal 2015. 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 March 31, 2015, there were 1,901 bakery-cafes in 45 states 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, regarding our intention to repurchase shares from time to time under the share repurchase program and the source of funding of such repurchases, our refranchising activities, 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 30, 2014 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 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 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 for the 13 weeks ended March 31, 2015 excluding the refranchising loss provides additional information to investors to facilitate the comparison of past and present operations, as the Company does not believe the refranchising loss to be indicative of our ongoing operations.
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SOURCE Panera Bread Company
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.