Panera Bread Company’s Retail Bakery-Cafes Rising Nationwide

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes. Panera offers daily baked goods, which includes freshly baked bagels, breads, muffins, scones, rolls, and sweet goods. It also offers made-to-order sandwiches on freshly baked breads; soups; freshly prepared and hand-tossed salads; pasta dishes; as well as custom roasted coffees and cafe beverages.

Panera offers mobile ordering and Rapid Pick-Up for to-go orders. The Company is based in St. Louis, Missouri. Panera Bread operates via its Company Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations segments. In addition, Panera supplies fresh dough, produce, tuna, cream cheese, and proprietary sweet goods items.

The Company also provides catering services. Furthermore, delivery is now available in 13% of system-wide bakery-cafes. This includes 20% of Company-owned bakery-cafes.

There were 2,024 bakery-cafes in 46 states and in Ontario, Canada, as of September 27, 2016, operating under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Cafe® names. The Company’s dedication is to bake fresh bread from fresh dough in every bakery-cafe, each day, and with no artificial preservatives.

Panera Bread has its Panera 2.0 initiative. Mr. Ronald M. Shaich, Panera Bread Founder, Chairman, and Chief Executive Officer, said recently, “As we’ve said in the past, Panera 2.0 is meant to reduce friction for our customers by providing an improved guest experience enabled by the digital capabilities we have built and the operational capabilities we are bringing to bear. We’re pleased to report that Panera 2.0 cafes continue to materially outperform traditional Panera 1.0 cafes.” (Panera Bread Q3 2016 Results – Earnings Call Transcript – Seeking Alpha)

Panera Bread removed artificial colors, flavors, sweeteners and preservatives from over 400 ingredients, comprising over 90% of its menu. The Company said that it is on course to reach 100% clean by the end of Q4 2016 with only a few sweet goods left. By the end of Q3, 95% of Panera’s food menu was clean.

Recently, Panera Bread reported financial results for fiscal Q3 2016. Financial highlights for Q3 include Company-owned comparable net bakery-cafe sales up 3.4%, and up 7.2% on a two-year basis. In Q3 2016, Panera saw bakery-cafe margins improve for the third straight quarter.

Q3 2016 GAAP Diluted Earnings Per Share (EPS) was $1.37. This represents an increase of 8%. Q3 2016 Non-GAAP Diluted EPS (excluding refranchising charges) was $1.37. This represents an increase of 4%.

Panera Bread has approximately 97,000 employees. The Company serves approximately 8.3 million customers per week. Panera’s differentiation factor is its expertise in fresh-baked bread.

Pertaining to shareholder returns, Panera Bread Company shares have delivered a total return of over 4,700% to shareholders over the last 20 years. This is in comparison to roughly 200% for the S&P 500.

Moreover, during the five-year period ending 2015, the Company delivered a total return to shareholders of over 90%, versus around 60% for the S&P 500. Panera has returned $1.3B to shareholders by way of share repurchases since 2009. In 2015, Panera Bread had free cash flow of $94 million.