1 key value metric that affected Panera Bread Company’s earnings

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Nov. 20 2020, Updated 3:47 p.m. ET

Same-store sales

In the last part of this series, we discussed how Panera Bread Company (PNRA) had a disappointing operating income. Let’s see what could have led to this result.

When a restaurant reports weak or flat earnings, the first place to look is same-store sales. See our Chipotle Mexican Grill (CMG) series here to learn more about same-store sales.

Same-store sales for company-operated and franchised restaurants

The company reported same-store sales growth of 0.10% compared to 3.8% in the corresponding quarter in 2013. Franchise same-store sales were -0.2% compared to same-store sales growth of 3.5% in the second quarter of 2013.

Panera’s peer Chipotle Mexican Grill (CMG), another fast-casual restaurant chain, saw same-store sales growth of 17.3% in the second quarter. Fast food chain McDonald’s (MCD) recorded same-store sales growth of 1.5% in the U.S., and Wendy’s (WEN) recorded growth of 3.3%.

If you’re looking to invest in a mix of restaurants but want to avoid company-specific risks, then you may consider an exchange-traded fund (or ETF) like the Consumer Discretionary Select Sector SPDR Fund (XLY).

Same-store sales are further driven by the number of customers (or traffic) and the ticket (or average check). Traffic grew 0.4%, which was offset by a decline in ticket by 0.3% in the quarter. Let’s look at this result in more detail in the next part of this series.

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