Panera Bread Co. ( PNRA - Analyst Report ) , a chain of bakery–café quick casual restaurants in the United States and Canada, recently announced a new three-year share repurchase program to buy back up to $600 million worth of its common stock.

This share repurchase authorization program replaces the previous $600 million buyback program approved in November 2009, of which $352.4 million remained.

The stock buyback is effective from August 28, 2012 and the company seeks to execute the program in the open market or in negotiated transactions or through accelerated stock buyback agreements, depending on share price and other macro factors.

The share repurchase program will also reduce the number of shares outstanding, which stood at 29.5 million as of June 26, 2012. At the end of second-quarter 2012, the company had cash and cash equivalents of $255.8 million. Shareholders' equity at the end of the quarter stood at $745.4 million.

We appreciate Panera’s effort to bolster long-term shareholders’ value. We believe that the share repurchase authorization affirms the company’s positive outlook and reflects its confidence in its fundamentals. Concurrently, buying back of shares underlines Panera Bread’s strategy to increase shareholders’ value in the long run. The announcement is not only expected to reinforce shareholders’ confidence but also boost the market value of the outstanding shares.

The company enjoys dominant position in the bakery-cafe business and remains well positioned to reinvigorate brands, revitalize comparable store sales and accelerate unit growth in the long run. The introduction of the new menu, increased positive impact from media support and faster recovery of higher-end consumers promise more growth. Moreover, an increase in the full-year guidance for two consecutive quarters as well as the expectation for continued margin improvement also augurs well.

Panera, which competes with the likes of Chipotle Mexican Grill Inc. ( CMG - Analyst Report ) and Einstein Noah Restaurant Group, Inc. ( BAGL - Snapshot Report ) , currently, carries a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.