Panera's (NASDAQ:PNRA) been on quite a tear lately, with its stock rising more than 20% over the last six months. And if you're reading this article, you may have noticed that it jumped again today. Upper crust, indeed.

The bakery and cafe operator upped its second-quarter guidance, but I've got to wonder if today's euphoria is a bit much, seeing how Panera also sliced a bit off its guidance for the second half of the year.

Panera's fiscal second-quarter earnings will be $0.48 per share to $0.50 per share -- granted, that's a huge improvement over its former expectation for earnings of $0.40 per share to $0.44 per share. Not only did Panera say quarterly comps will increase by 6.1% to 6.4% (versus prior expectation for an increase of 5% to 6%), but it also said it has been improving margins with higher growth in gross profit per transaction. That's good, since Panera has often struggled with squeezing higher profits out of increasing sales.

Panera also said it has locked in 95% of its wheat requirements for the fiscal first and second quarters of 2009 at $10 per bushel, a great improvement over $15 per bushel in the same period of 2008. Earlier this year Panera's profits were sapped by skyrocketing wheat prices, so that's good news.

Still, I'd say there are major risks. Food and energy prices are skyrocketing these days, and there's still uncertainty as to how high they're going. Panera said to expect an incremental $0.02 per share to $0.03 per share hit in the second half of this year due to rising gasoline prices. Meanwhile, although it will benefit from the decrease in wheat costs, these gains will be partly offset by higher prices in protein, dairy, packaging, and gasoline. (Nobody's immune to inflation these days.)

I also contend that this is a difficult economic climate for consumers, who are strapped for cash and eating out less. While Panera could benefit from consumers' tendency to stick with less expensive, quick-serve options, it also faces tons of competition in that space, such as McDonald's (NYSE:MCD), Starbucks (NASDAQ:SBUX), Chipotle (NYSE:CMG) (NYSE:CMG-B), and Cosi (NASDAQ:COSI), to name just a few.

So far this year, my bearishness on Panera certainly hasn't been borne out by its stock performance. Personally, though, I still have too many questions about how the company will fare during these difficult economic times, and I just don't view it as a reasonably priced or tantalizing stock at the moment.

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