Panera (NASDAQ:PNRA) may have gotten a nod as a top chain from Zagat recently, but that apparently hasn't helped much. The bread-centric bakery concept reduced its second-quarter earnings estimate, and the stock has been plummeting today, down about 13% at my last check.

While dough may be rising in Panera's bakeries, its Q2 earnings outlook certainly isn't. The company now expects earnings between $0.38 and $0.40 per share, a far cry from the average analyst estimate of $0.49 per share. Additionally, its original expectation that comps would increase between 3.5% and 4.5% was cut to a range of 1.5% to 2.5%.

Struggling isn't a new state of affairs for Panera; its most recent quarter was a bit stale, and that was just more of the same. It's been trying to drum up growth by drawing customers in for more than just breakfast, but it's had little luck thus far.

When I last covered Panera, I couldn't quite consider it a tantalizing stock idea, even though its share price had already taken quite a pounding. The company's got its work cut out for it, competing with the likes of McDonald's (NYSE:MCD), Chipotle (NYSE:CMG), Cosi (NASDAQ:COSI), and even Starbucks (NASDAQ:SBUX). But it has certain competitive advantages, including a focus on healthier fare than many of its fast food peers are renowned for.

Panera could still get cheaper, though. Given the new guidance, it seems the company expects 16% earnings growth in 2007, as opposed to its previous 19% estimate -- bummer. It's trading at about 24 times expected 2007 earnings, and of course, the company said it will update its yearly guidance when it reports its second-quarter earnings July 24. There will likely be a lot riding on any progress Panera can make in resuming its growth.

Those facts all suggest that Panera's still not a great bargain. However, I still say it's an interesting stock to keep an eye on in the coming year -- as long as a better price presents itself, and the company can turn its fortunes around.  

Fill up on more Panera:

Starbucks is a Motley Fool Stock Advisor recommendation. Chipotle has been recommended by both Motley Fool Hidden Gems and Motley Fool Rule Breakers. Try any of our Foolish newsletters free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.

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