Image source: Panera Bread.

Fast-casual giant Panera Bread (PNRA) has worked hard to take advantage of consumer demand for food choices that emphasize both healthy living and convenience. Although Panera hasn't been able to grow as quickly as some of its rivals, investors hope that the company's slow and steady pace of expansion will eventually win the race and lead to much higher share prices. Coming into Panera's second-quarter financial report on Tuesday, despite the fact that shares haven't moved much over the past few months, investors believe that the company can continue to see solid earnings growth. Still, recent top-line gains have been tepid at best, and that has some shareholders a bit concerned. Let's take an early look at Panera to see what to expect from its next quarterly report.

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Data source: Yahoo! Finance.

Will Panera see its earnings rise higher?

In recent months, investors have been increasingly enthusiastic about Panera earnings. They've boosted their second-quarter estimates by $0.10 per share, and even larger gains for both 2016 and 2017 full-year earnings would ordinarily show optimism among shareholders. Yet looking at the stock, Panera's share price has fallen by about 1% since mid-April.

Panera's first-quarter earnings report continued the positive fundamental momentum that investors have seen in its recent results. Revenue growth accelerated to 6%, double the previous quarter's pace, and net income climbed double-digit percentages compared to the year-ago period. Comps climbed 4.7%, and for company-owned locations, gains in comparable-restaurant sales were even stronger at 6.2%. Both traffic counts and average check size improved, and Panera boosted its guidance for both comps and earnings per share for the full year.

To bolster its attractiveness to its core customer base, Panera has made moves to emphasize natural ingredients. In June, the company extended its efforts to remove artificial ingredients beyond its cafes to its grocery-sold products as well. Panera said that it would get rid of all remaining artificial flavors, sweeteners, preservatives, and colors in its Panera at Home products by the end of 2016. With the move, Panera believes that the nearly 50 different grocery items that it sells under its brand name will be free of the troublesome additives, which stands out even more in an industry in which preservatives to extend shelf life are commonplace.

Panera looks to boost its stock

Panera is also reaching out to shareholders. The company said that it had decided to replace its existing stock buyback program in favor of a newly authorized three-year share repurchase plan. The new buyback will allow Panera to spend up to $600 million on its own stock, adding to the $1.3 billion in capital that the fast-casual restaurant chain has returned to shareholders through share repurchases over the past seven years. The move has had a huge impact on its outstanding share count, cutting total shares by nearly 30% and having a sizable upward influence on earnings per share.

Yet much of Panera's success will depend on how the overall U.S. economy holds up. Some recent reports have shown concerning trends among restaurant-goers, with the fast-casual space in particular seeing uncharacteristic weakness. A drop in visits to fast-casual chains during the month of May was the first overall decline in more than a decade. Researchers pointed to economic pressures on would-be restaurant customers, and for Panera, rising competition across the space could make it even harder for the company to keep growing as strongly as investors want.

In the Panera earnings report, investors should get a reading on the status of the Panera 2.0 initiative and how well the chain is doing at optimizing its order and food-delivery experience. With so much riding on giving customers high-quality offerings quickly and at reasonable prices, Panera can't afford to let down its guard even though it has done well lately. If it can push forward aggressively, though, then Panera could finally see the breakout growth that investors have waited for.