The theme for Panera's
The only less-than-impressive number I could find was the $0.51 in diluted EPS for Q4, posting a 13% year-over-year increase, which might in some part explain Friday's drop. In fairness, though, the company had already forecasted diluted EPS ranging between $0.48 and $0.49 back in October, due to an increased number of company-owned bakery-cafe openings and higher market research costs during the quarter. As such, I don't find this particularly worrisome, since it relates to the company's longer-term prospects.
One potentially troubling prospect, on the surface, is the company's premium P/E; it currently trades at a trailing multiple of 45 times earnings. That said, well-run companies growing at a fast clip generally command a hefty premium -- two notable examples are Starbucks
To put things in perspective, the only time (in the recent past) when the company traded at a relative discount was in 2004, the year of the low-carb diets, when its P/E flirted with 30. And even with folks supposedly swearing off white bread, systemwide same-store sales were still 2.7%. But those times are apparently past; this year's same-store sales came in at an impressive 7.7%, and the addition of 139 new stores did its part to boost revenue 33.6%.
The company is anticipating another fabulous year in 2006, with diluted EPS expected to increase more than 25% on a pro forma basis, to between $1.91 and $1.95. The 10.2% increase in same-store sales so far in Q1 has Panera off to a strong start, and the company has raised its outlook accordingly to 4%-6% growth.
The company also announced plans to open approximately 150-160 new locations, a heady pace for an operation with only 877 stores. But with almost $90 million in cash and no debt at the end of the third quarter, it seems the growth is well under control.
Fool contributor John Bluis does not own shares in any company named above. The Fool has a disclosure policy.