Panera Bread’s Share Price Rises on Positive Outlook



2Q16 performance

Panera Bread (PNRA), which operates a chain of bakery-café fast casual restaurants in the United States and Canada, announced its 2Q16 results after the Market closed on July 26, 2016. The company reported 2Q16 revenue of $698.9 million and adjusted EPS (earnings per share) of $1.78. The company’s revenue rose by 3.3%, while its adjusted EPS grew by 10.2%. Analysts were expecting adjusted EPS of $1.75 and revenue of $696.7 million.

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The slowdown in restaurant business due to lower consumer expenditure on fast food and casual dining had made investors skeptical about Panera 2Q16 results, which led to a drop of 4.5% in its share price before the announcement of 2Q16 results. However, Panera Bread’s results were better than analysts expected. Also, the company raised its EPS guidance for 2016, which helped the company to regain some of the drop in its share price. On July 27, 2016, the company’s stock closed at $214.50, a rise of 3.3% from previous day’s closing price.

Year-to-date performance

The better-than-expected 4Q15 and 1Q16 results have led to a rise in Panera Bread’s stock in 2016. On a year-to-date basis, the company’s share price has returned 10.1%, while the shares of its peers Chipotle Mexican Grill (CMG), Shake Shack (SHAK), and Brinker International (EAT) have posted returns of -11.2%, 1.9%, and -2.6%, respectively.

Series overview

In this series, we’ll discuss Panera Bread’s 2Q16 performance. We’ll compare it with the company’s performance during the same quarter last year. Further, we’ll explore the factors that could drive PNRA’s revenue in the coming quarters. Finally, we’ll look at the company’s valuation multiple and analysts’ estimates and recommendations for its stock.

First, we’ll discuss Panera’s 2Q16 revenue.


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