Pnra Food
Source: Panera Bread.

The trend toward fast-casual restaurants has strengthened as Americans get more conscious about their health and their diet. Panera Bread (NASDAQ:PNRA) has been one of the big beneficiaries of the healthy-food movement, and shareholders have seen huge returns over the years as a result. Yet more recently, Panera has seen its growth slow down compared to industry rival Chipotle Mexican Grill (NYSE:CMG), and with its third-quarter financial report coming out tomorrow afternoon, some investors worry that the best days for Panera might be over.

Panera has done an impressive job building loyalty among its customer base, with the company beating out Chipotle and other restaurant chains with the top score in the Brand Keys Customer Loyalty Engagement Index. But even if Panera has done a good job of holding onto its existing clientele, its most recent growth numbers suggest that the flood of new dining patrons has slowed significantly. Let's take an early look at what's been happening with Panera Bread over the past quarter and what we're likely to see in its report.

Stats on Panera Bread

Analyst EPS Estimate

$1.42

Change From Year-Ago EPS

5.2%

Revenue Estimate

$620.39 million

Change From Year-Ago Revenue

8.4%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

What should Panera investors expect this quarter?
Panera investors have been bracing for weaker earnings growth all quarter long, with analysts cutting more than a dime per share from the third-quarter projections and more than 6% from their full-year 2015 estimates. Yet the stock hasn't missed a beat, climbing 16% just since late July.

Panera's second-quarter earnings report showed some of the struggles that the restaurant chain has faced lately. Overall revenue climbed 7% from year-ago levels, but same-store sales drifted upward at an anemic 0.1% rate. Moreover, as Motley Fool Stock Advisor board-stroller Royce Mason noted back in July after the announcement, a one-time item was almost solely responsible for Panera posting any growth in earnings per share, and overall net income was down. Even worse, Panera also downgraded its guidance for the full year again, cutting estimates for same-store sales to between 0% and 1.5% and reducing its earnings-per-share projections by another $0.15 to $0.20.

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Source: Wikimedia Commons.

Still, Panera has some investors expecting a strong turnaround. With its Panera 2.0 initiative, the restaurant is aiming to change the way people order their food, arranging for mobile-device order placement long before you actually set foot in a restaurant location. Founder and CEO Ron Shaich believes that by getting rid of the unpleasant experiences of waiting in line or having your order taken down incorrectly, Panera patrons will appreciate the smoother customer experience they'll get. If Shaich is right, then the move could drive comps back upward in the future.

Panera has also worked hard to build up a friendly environment for its patrons. The company recently took a stand on a hot-button political issue, joining Chipotle and others in asking gun owners not to bring weapons into their restaurants. The move will resonate with much of Panera's existing customer base, but one question that skeptics have is whether it will alienate some potential new customers from trying Panera.

In the long run, Panera also has to address some trends in the very area that helped drive customer growth in the first place. Increasingly, concerns about gluten have diners looking for alternatives to traditional bread, and that's clearly a problem for Panera and its fairly heavy reliance on grains on its menu. Indeed, some believe that Chipotle's success has ridden on the coattails of greater awareness, with the burrito-maker's gluten-free menu earning rave reviews from those most sensitive to the issue.

In the Panera earnings report, investors should watch closely to see if the company is able to accelerate its growth beyond simply opening new stores. If same-store sales don't rebound soon, then many investors could lose faith and conclude that Panera has fallen out of style among those looking for new places to dine.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill and Panera Bread. The Motley Fool owns shares of Chipotle Mexican Grill and Panera Bread. Try any of our Foolish newsletter services free for 30 days. 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.