Panera Bread Company (Nasdaq:PNRA - News) today reported that net income for the 12 weeks ended December 28, 2002 (fourth quarter), increased 58% to $7.5M compared to $4.755M for the 12 weeks ended December 29, 2001. Earnings per diluted share increased 56% to $0.25 from $0.16 for the 12 weeks ended December 29, 2001. For the 52 weeks ended December 28, 2002, net income increased 65% to $21.8M compared to $13.15M for the 52 weeks ended December 29, 2001. Earnings per diluted share increased 59% to $0.73 for 2002, compared to $0.46 for the year ended December 29, 2001.
System-wide sales increased 37% for the fourth quarter and 43% for the year. Company revenues increase 31% to $73M for the quarter and 38% to $277.8M for the year.
For the 28th consecutive quarter Panera Bread (on a stand-alone basis) has reported positive comparable company bakery-cafe sales. System-wide comparable bakery-cafe sales increased 4.8% for the quarter (2.5% for company-owned and 5.8% for franchised bakery-cafes). For the year, system-wide comparable bakery-cafe sales increased 5.5% (4.1% for company-owned and 6.1% for franchised bakery- cafes). Comparable bakery-cafe sales include those bakery-cafes that have been open for at least 18 four-week periods in the reporting period and exclude the one specialty bakery-cafe.
As of December 28, 2002, there were 478 Panera Bread bakery-cafes (including the one specialty bakery-cafe). During the fourth quarter, a record 43 new Panera Bread bakery-cafes were opened and one bakery-cafe was closed, bringing the total opened in 2002 to 115 (+32%). The total backlog of additional franchise commitments in place as of December 28, 2002, was 491.
Ron Shaich, chairman and chief executive officer noted that the 59% increase in EPS for 2002 followed a 77% increase for 2001. “Indeed, over the last four years we have generated a compounded annual growth rate in earnings per share of 80%,” Shaich said.
“Development, average unit volume growth and operating margin improvement continue to fuel our earnings growth.”
Based on 2003 development targets, Panera increased its 2003 EPS target to $0.99 in November representing a 36% increase over 2002 EPS. This target assumes full year systemwide comp increases of 2 to 3%. Development is targeted at 120 new bakery-cafes - 28 company owned and 92 franchised.
Shaich noted that first quarter system-wide comparable bakery-cafe sales to date are expected to increase at a somewhat slower 1 to 2%. First quarter comps “have been negatively impacted by the more difficult winter weather in 2003 compared to 2002 in the Midwest, Northeast and Mid-Atlantic regions, as well as some cannibalization in the Company's most deeply penetrated market.”
Shaich concluded, "In 2003 Panera Bread should exceed $1 billion in system-wide sales. We are excited to reach that milestone but know the potential is far greater. We believe we are in the early stages of our build out, as we are operating in only 60% of the United States, and in many of our markets we are relatively immature in our penetration."
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