Please ensure Javascript is enabled for purposes of website accessibility

An Early Look at Panera's Earnings

By Dan Caplinger - Apr 21, 2013 at 1:40PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Can the bakery company keep moving in the right direction?

On Tuesday, Panera Bread (PNRA) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Panera has benefited greatly from the trend toward healthier eating, with its corporate philosophy encouraging customers to treat its restaurants like a home away from home. So far, that strategy has produced impressive growth. Let's take an early look at what's been happening with Panera over the past quarter and what we're likely to see in its quarterly report.

Stats on Panera

Analyst EPS Estimate

$1.65

Change From Year-Ago EPS

17.9%

Revenue Estimate

$566.1 million

Change From Year-Ago Revenue

13.5%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will Panera's earnings stay healthy this quarter?
Analysts in recent months have become slightly more optimistic about Panera's earnings prospects. They've raised their estimates for the just-ended quarter by $0.02 per share and ratcheted up their 2013 full-year consensus by twice that amount. The stock has done reasonably well, rising about 10% since mid-January.

Panera has thrived by selling healthy fare in an inviting bakery setting. Not content to allow Starbucks (SBUX 2.77%) to dominate the early morning coffee niche, Panera has used some of the same tactics as its rival, building out its restaurants to encourage customers to linger with Wi-Fi and comfortable furnishings. Starbucks has reupped its efforts to go beyond coffee with its purchase last year of bakery company La Boulange, but that hasn't stopped Panera from posting strong growth.

One way that Panera has successfully gone beyond its coffee rival is in offering catering services. The company saw its catering sales rise 19% last quarter, and Panera expects to continue to expand in the area as customers get familiar with its availability and convenience. Fellow healthy-eatery Chipotle (CMG 4.05%) announced at the beginning of the year that it would follow suit with its own catering service, seeking to keep up with its competitor's faster growth rate.

Panera has also sought to gain favor not just with customers and investors but with the communities it serves as well. With initiatives to help the hungry, like donating baked goods to community organizations and its "pay-what-you-can" experiment with certain specialty stores scattered around the country, Panera has built a strong reputation for doing good as well.

In Panera's quarterly report, look at Panera's sales and earnings growth not just compared with the company's previous results but also in comparison with the figures Chipotle just released last week. If Panera can keep staying ahead of its competitors, it should have a strong future ahead of it.

Click here to add Panera to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Panera Bread Company Stock Quote
Panera Bread Company
PNRA
Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
CMG
$1,340.91 (4.05%) $52.14
Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$74.49 (2.77%) $2.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.