Over the years, Panera Bread
At least Panera managed to bake up some decent results in August. Same-store sales climbed by a solid 3.1%. Company-owned bakeries did even better, with a 4.1% rise, while franchises rose 2.5%.
Patrons love Panera for the wonderful smells and flavors that fill its stylish and very relaxed bakery/cafe shops. The food is fresh and healthful, the menu free of trans fats. The stores serve up a variety of sandwiches on freshly baked bread, as well as soups, salads, and a nice assortment of bagels, rolls, and other mouth-watering items. It's like hanging out in a Starbucks
Unfortunately, Panera must get its costs under control for investors to start getting that same warm and cozy feeling about the stock. People clearly aren't tired of Panera's concept, or else the top line would suffer. But it just isn't flowing to the bottom line right now. And what good are sales increases without profitability?
While fresh, nutritious, and great-tasting food will always be popular, Panera also faces aggressive competition. Chipotle
I'd advise Fools to hold off on purchasing shares until it can show that it can contain costs. Right now, Panera stock looks kind of like uncooked dough. It can taste good, but it may just give you a stomachache later.
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Fool contributor Larry Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. Feel free to email him at firstname.lastname@example.org. He doesn't have any positions in the companies mentioned. The Fool has a disclosure policy.