Please ensure Javascript is enabled for purposes of website accessibility

Why the Tepid Forecast, Panera?

By Mark Reeth and Simon Erickson – Feb 19, 2014 at 2:35PM

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

Panera stock is up today, despite a few soft points in its earnings report. Is the competition catching up?

Shares of Panera Bread (PNRA) are up nearly 4% today after the company reported fourth-quarter earnings. While profits were up, same-store sales growth was up only 1.7% year over year, which was due more to the size of the checks than to volume, as traffic actually fell this quarter, something the company attributed to the particularly harsh winter this year.

Guidance for the full year ahead also came in a bit soft for the company, missing analysts' expectations, as CEO Ronald Shaich announced that Panera would be reinvesting in many of its stores this year. In today's installment of Stock of the Day, Motley Fool Supernova analyst Simon Erickson discusses the future of Panera, and says that this will be somewhat of a "wait-and-see" moment for the company. He'll be looking ahead to March, when the full reinvestment plan will be detailed, to see if this move will create long-term value.

So does that mean the stock is still a long-term buy today, or should investors be holding off? Simon says he still sees Panera as a stock that he believes is as a long-term buy-and-hold. Despite the competition ramping up in the fast-casual space, he thinks Panera can hold its own and deliver for shareholders in the years ahead.

Mark Reeth has no position in any stocks mentioned. Simon Erickson has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Panera Bread. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 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

*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 analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

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.