Panera Bread Company (PNRA - Free Report) recently announced that all its franchisees have extended their support for its e-commerce platform, a part of the Panera 2.0. restructuring program. Simultaneously, the company also declared that its board of directors has approved a new three-year share repurchase program.
Per the assurance, these franchisees will make capital contributions and will also reimburse their share of development costs, maintenance and future upgrades related to the Panera 2.0 program’s e-commerce upgrades.
Panera 2.0 calls for improvement in operational efficiency and was launched in Mar 2014. The program aims at lowering waiting time — one of the major problems faced by Panera — and speed up service. It mainly includes focus on kiosk and mobile ordering, operational modifications and plans for smaller restaurants.
The company plans to have a Rapid Pick-Up system – one of the key elements of the Panera 2.0 program – to be rolled out by the end of 2014 at all its cafes. The system allows customers to place orders online, select a time and pick up food from shelves. The company has been able to implement its Panera 2.0 program in 14 cafes and expects it to expand to 100 cafes by the end of 2014.
Approximately, half of Panera’s 1,800 units are franchised. This 100.0% commitment from franchisees toward the company’s key restructuring program would act as a catalyst for this Zacks Rank #4 (Sell) company and aid profitability.
Meanwhile, the new three year share repurchase program of up to $600.0 million will replace the existing program that was set to expire on Aug 23, 2015. We appreciate Panera’s efforts to boost long-term shareholder value. Besides contributing to earnings, the share repurchase authorization affirms the company’s positive outlook and reflects its confidence in its fundamentals.
Some better-ranked stocks worth considering in the restaurant industry include Buffalo Wild Wings Inc. (BWLD - Free Report) , Burger King Worldwide, Inc. and Carrols Restaurant Group, Inc. (TAST - Free Report) . While Buffalo Wild Wings sports a Zacks Rank #1 (Strong Buy), Burger King and Carrols Restaurant Group carry a Zacks Rank #2 (Buy).