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Panera Bread (PNRA) Q2 Earnings, Revenues Top Estimates
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Panera Bread Company posted strong second-quarter 2016 results with both earnings and revenues beating the Zacks Consensus Estimate.
Earnings and Revenue Discussion
Panera Bread’s second-quarter earnings of $1.78 beat the Zacks Consensus Estimate of $1.75 by 1.7%. Further, EPS increased 10.6% year over year mainly on the back of higher revenues and lower share count.
Revenues of $698.9 million went up 3.3% year over year mainly on the back of higher bakery-café sales, fresh dough and other product sales to franchisees and increased franchise royalties and fees. Further, revenues beat the consensus mark of $698 million by 0.1%.
Comps Discussion
System-wide comparable net bakery-café sales increased 2.3%, lower than 4.7% growth recorded last quarter. Comps at company-owned units grew 4.2%, lower than the 6.2% rise posted in the first quarter. Comps at company-owned units reflect 3.8% average check growth and 0.4% year-over-year increase in transaction.
Panera Bread witnessed 0.6% comps growth at franchisee-operated units that compared unfavorably with 3.3% rise in the previous quarter.
Additionally, the company declared that comps in the first 27 days of the third quarter of 2016 increased 3.1%, indicating that it is off to a strong start in the ongoing quarter.
Margins
Panera Bread’s adjusted operating margin (excluding charges related to its refranchising initiatives) declined 50 basis points (bps) from the year-ago quarter. This was primarily due to higher wages as well as start-up and transition expenses associated with the company’s strategic initiatives. Further, a year-over-year increase in general and administrative expenses and higher incentive compensation led to the decline.
The company raised the lower end of its previously issued fiscal 2016 EPS guidance. Excluding certain items, adjusted earnings are projected in the band of $6.60 to $6.70 compared with $6.50 to $6.70 expected previously. The new guidance represents growth of 6% to 8% as compared to 5% to 8% estimated earlier.
Meanwhile, Panera Bread reiterated its company-owned comparable net bakery-café sales growth expectation at the range of 4% to 5%.
For operating margins, the company continues to expect a decline of 50 bps to 100 bps year over year, excluding the impact of certain items.
Zacks Rank & Stocks to Consider
Panera Bread has a Zacks Rank #3 (Hold). Better-ranked restaurant stocks are Jack in the Box Inc. (JACK - Free Report) , Famous Dave's of America Inc. (DAVE - Free Report) and Papa John's International Inc. (PZZA - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
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Panera Bread (PNRA) Q2 Earnings, Revenues Top Estimates
Panera Bread Company posted strong second-quarter 2016 results with both earnings and revenues beating the Zacks Consensus Estimate.
Earnings and Revenue Discussion
Panera Bread’s second-quarter earnings of $1.78 beat the Zacks Consensus Estimate of $1.75 by 1.7%. Further, EPS increased 10.6% year over year mainly on the back of higher revenues and lower share count.
Revenues of $698.9 million went up 3.3% year over year mainly on the back of higher bakery-café sales, fresh dough and other product sales to franchisees and increased franchise royalties and fees. Further, revenues beat the consensus mark of $698 million by 0.1%.
Comps Discussion
System-wide comparable net bakery-café sales increased 2.3%, lower than 4.7% growth recorded last quarter. Comps at company-owned units grew 4.2%, lower than the 6.2% rise posted in the first quarter. Comps at company-owned units reflect 3.8% average check growth and 0.4% year-over-year increase in transaction.
Panera Bread witnessed 0.6% comps growth at franchisee-operated units that compared unfavorably with 3.3% rise in the previous quarter.
Additionally, the company declared that comps in the first 27 days of the third quarter of 2016 increased 3.1%, indicating that it is off to a strong start in the ongoing quarter.
Margins
Panera Bread’s adjusted operating margin (excluding charges related to its refranchising initiatives) declined 50 basis points (bps) from the year-ago quarter. This was primarily due to higher wages as well as start-up and transition expenses associated with the company’s strategic initiatives. Further, a year-over-year increase in general and administrative expenses and higher incentive compensation led to the decline.
PANERA BREAD CO Price, Consensus and EPS Surprise
PANERA BREAD CO Price, Consensus and EPS Surprise | PANERA BREAD CO Quote
2016 Outlook
The company raised the lower end of its previously issued fiscal 2016 EPS guidance. Excluding certain items, adjusted earnings are projected in the band of $6.60 to $6.70 compared with $6.50 to $6.70 expected previously. The new guidance represents growth of 6% to 8% as compared to 5% to 8% estimated earlier.
Meanwhile, Panera Bread reiterated its company-owned comparable net bakery-café sales growth expectation at the range of 4% to 5%.
For operating margins, the company continues to expect a decline of 50 bps to 100 bps year over year, excluding the impact of certain items.
Zacks Rank & Stocks to Consider
Panera Bread has a Zacks Rank #3 (Hold). Better-ranked restaurant stocks are Jack in the Box Inc. (JACK - Free Report) , Famous Dave's of America Inc. (DAVE - Free Report) and Papa John's International Inc. (PZZA - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>