What Drove Panera Bread’s 4Q15 Revenues?


Feb. 17 2016, Published 3:20 p.m. ET

PNRA’s revenue sources

Panera Bread (PNRA) earns its revenues from three sources: revenue from company-operated restaurants, royalty and franchise fees collected from franchisees, and fresh dough operations. The revenue generated from company-operated restaurants forms more than 85% of the company’s overall revenue.

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4Q15 performance

In 4Q15, Panera Bread (PNRA) recorded overall revenues of $691.8 million, an increase of 2.9% from $672.5 million recorded in 4Q14. The revenue from company-operated restaurant sales increased from $593.8 million to $602.3 million, an increase of 1.5%. The increase in revenue was mainly due to an increase in same-store sales growth of 3.6%.

However, a decrease in the number of company-operated restaurants in 4Q15 offset some of the growth in revenue as compared to 4Q14. In 4Q15, the company operated 901 units compared to 925 in 4Q14. Also, the revenue from franchisees increased from $33.7 million in 4Q14 to $39.6 million in 4Q15, an increase of 17.4%. The increase was mainly due to an increase in royalties, as the systemwide sales were higher in 4Q15 compared to 4Q14. The revenue from fresh dough operations increased from $44.9 million to $49.8 million, an increase of 10.8%.

The company’s associated businesses, including Catering, Delivery, and Panera at Home, have also helped in increasing the overall revenue of the company. The company stated that its Catering business, which found momentum in 3Q15, grew by over 14% in 4Q15. Plus, Panera at Home, a $150 million business, recorded a compounded annual growth of 50% in the last three years. The Delivery business is still in its nascent stage.

You can also gain exposure to Panera Bread (PNRA) by investing in the iShares S&P Mid-Cap 400 Growth ETF (IJK), which has invested 0.71% of its portfolio in PNRA. IJK has also invested 0.91% in Domino’s Pizza (DPZ), 0.59% in Dunkin Brands (DNKN), and 0.42% in Buffalo Wild Wings (BWLD).

2016 outlook

With more than 200 restaurants that are expected to be upgraded to Panera 2.0, PNRA is expecting the same-store sales growth to rise and thus improve the overall revenue of the company.

Plus, the company stated that the unit growth and initiatives taken to improve sales from Catering, Delivery, and Panera at Home would aid in the growth of the company’s revenues by 4.5%–6.5% in fiscal 2016.


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