Panera Bread Company (Nasdaq: PNRA ) today reported that net income for the 12 weeks ended October 5, 2002, increased 73% to $5,167,000 compared to $2,984,000 for the 12 weeks ended October 6, 2001. Earnings per diluted share increased 70% to $0.17 for the 12 weeks ended October 5, 2002 from $0.10 for the 12 weeks ended October 6, 2001. For the 40 weeks ended October 5, 2002, net income increased 70% to $14,265,000 compared to $8,397,000 for the 40 weeks ended October 6, 2001. Earnings per diluted share increased 66% to $0.48 for the 40 weeks ended October 5, 2002, compared to $0.29 for the 40 weeks ended October 6, 2001. Earnings per share amounts reflect the two-for-one stock split on June 24, 2002.

System-wide sales and total revenues increased 41% and 35%, respectively, for the 12 weeks ended October 5, 2002, compared to the 12 weeks ended October 6, 2001.

System-wide comparable bakery-cafe sales (excluding the one specialty bakery-cafe and closed locations) increased 5.1% for the 12 weeks ended October 5, 2002 (4.0% for company-owned and 5.5% for franchised bakery-cafes). This marks the 27th consecutive quarter that Panera Bread (on a stand-alone basis) has reported positive comparable company bakery-cafe sales. Comparable bakery-cafes include those bakery-cafes that have been open for at least 18 four-week periods in the reporting period.

System-wide sales and total revenues increased 45% and 41%, respectively, for the forty weeks ended October 5, 2002, compared to the forty weeks ended October 6, 2001, as follows.

System-wide comparable bakery-cafe sales (excluding the one specialty bakery-cafe and closed locations) increased 5.7% for the 40 weeks ended October 5, 2002 (4.7% for company-owned and 6.2% for franchised bakery-cafes).
As of October 5, 2002, there were 436 Panera Bread bakery-cafes (including the one specialty bakery-cafe). During the 12 weeks ended October 5, 2002, 23 new Panera Bread bakery-cafes were opened and one bakery-cafe was closed.

During the third quarter, the Company signed two new area development agreements in Southern California representing additional commitments of 30 new bakery-cafes. Additionally, the Company amended two existing area development agreements in North Carolina to add nine additional bakery-cafe commitments. This brought the total backlog of active additional franchise commitments in place, as of October 5, 2002, to 528.

Business Outlook

The Company continues to target fourth quarter earnings per share of $0.24, which would result in an increased earnings per share target of $0.71 for the full fiscal year 2002. This represents a 54% increase over the earnings per share of $0.46 in fiscal year 2001.

The Company is targeting fourth quarter comparable bakery-cafe sales in the 3% to 4% range and continues to expect to open 115 bakery-cafes (25 company-owned and 90 franchised) for the full year 2002. This means that the development target is 43 bakery-cafes (9 company and 34 franchised) for the fourth quarter.

The Company is raising its 2003 earnings per share target to $0.99, which represents nearly a 40% increase over the 2002 target. The increase in the 2003 target is based on an increase in the 2003 development target to 120 bakery-cafes (28 company-owned and 92 franchised).

Ron Shaich, chairman and chief executive officer, concluded by commenting, “Our strong average unit volumes, which are among the highest retail volumes in our industry (outside of casual dining), combined with strong comparable bakery-cafe sales and returns on investment, have fueled Panera Bread’s ability to grow rapidly over the last few years. Growth, in turn, has enabled Panera Bread (on a stand-alone basis) to produce an industry leading 78% compounded annual growth rate in earnings per share over the last four years (assuming we meet our 2002 target). Our 2003 earnings per share growth target, which we fully intend to meet, represents the most aggressive target of any public restaurant company we are aware of. Our earnings performance, combined with our expectation that the Panera Bread system will deliver in excess of $1 billion in system-wide sales in 2003, is indicative of the strength of our concept and the consumers’ reaction to it. Recognizing that we are still in the early stages of the Panera story, we are quite gratified to find that Panera Bread has quickly become a very significant brand with the elements in place that will enable us to create an even more exciting future.”