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.