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May 31, 2002

USA: Panera Bread Q1 earnings per share up 67% to US$0.35 in Q1

The St. Louis-based owner and franchiser of bakery-cafes, Panera Bread Co, has reported that net income for the 16 weeks ended 20 April 2002, rose to US$5.22m, or US$0.35 per diluted share, from US$3.06m, or US$0.21 per diluted share, for the same period in 2001.

The St. Louis-based owner and franchiser of bakery-cafes, Panera Bread Co, has reported that net income for the 16 weeks ended 20 April 2002, rose to US$5.22m, or US$0.35 per diluted share, from US$3.06m, or US$0.21 per diluted share, for the same period in 2001.

System-wide sales and total revenues increased 48% and 45%, respectively, for the 2002 period year on year, as follows:

                              16 Weeks ended  16 Weeks ended      Percentage
                              April 20, 2002  April 21, 2001       Increase

     System-wide sales          $207,001,000    $139,691,000           48%
     Total revenues             $ 77,005,000    $ 53,275,000           45%

System-wide comparable bakery-cafe sales (excluding specialty bakery-cafes and closed locations) increased 5.5% for the 16 weeks ended 20 April 2002 (5.3% for company-owned and 5.6% for franchised bakery-cafes). This marks the 25th consecutive quarter that Panera Bread (on a stand-alone basis) has reported positive comparable company bakery-cafe sales.

At the end of April this year, there were 390 Panera Bread bakery-cafes (including one specialty bakery-cafe). During the 16 weeks to  20 April, the company opened 24 new Panera Bread bakery-cafes and closed three bakery-cafes.

During the Q1, the company purchased the three existing bakery-cafes and the development rights for the Jacksonville market from its Jacksonville franchisee. Additionally, the company closed three bakery-cafes. The total number of active additional franchise commitments in place at the end of April 2002 was 507.

System-wide average weekly sales (excluding the specialty bakery-cafes and closed locations) for the 16 weeks ended 20 April 2002, were US$34,264 per week. This equates to an annualised sales volume of US$1.78m, a 5.9% increase over the same period in the prior year.

Ron Shaich, chairman and CEO, commented: “We were very pleased with our record results in the Q1. These results were driven by our very strong average unit volumes. Even more significantly, the new bakery-cafes that were opened in the Q1 are on a pace to achieve an average annualised unit sales volume in excess of US$2m. These bakery-cafes are performing significantly better than the system average.

“This trend continues to speak to our broad consumer appeal and the increasing customer awareness of our concept. These sales volumes have also resulted in very high returns on investment, which have in turn led to accelerating new bakery-cafe development.”

Shaich concluded, “As we look forward for the remainder of FY 2002, we are increasing our development target to 115 bakery-cafes (25 company-owned and 90 franchised). We are also targeting a 3% to 4% increase in comparable bakery-cafe sales and a 0.8% to 1% improvement in bakery-cafe margins.

“As a result of our accelerating development, strong sales volumes, and expanding margins, we are raising our 2002 earnings per share target to $1.40 per share, up 54% on 2001. This breaks down to the following quarterly earnings per share targets: Q2 US$0.26; Q3 US$0.31; and Q4 US$0.48. The company remains committed to its 2003 target of US$1.85 per share.”

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