et income at Panera Bread Co. increased 17% in the first quarter of fiscal 2013, but fell short of analysts’ expectations, leading the company’s share price down 6% in after-hours trading on April 23. Net income in the period ended March 26 was $48,117,000, equal to $1.65 per share on the common stock, up from $41,184,000, or $1.41 per share, in the same period a year ago. Fiscal 2013 results included a $2.2 million benefit from resolution of legal and tax matters, Panera said.Total revenue in the quarter increased 13% to $561,779,000 from $498,579,000.
Company-owned comparable net bakery-cafe sales increased 3.3% in the first quarter when compared with the previous year’s first quarter. Franchise-operated sales increased 3.3%, and system-wide comparable net bakery cafe sales rose 3.3%. Panera Bread Co. opened 10 new bakery-cafes in the quarter while franchisees opened 12. The company as a result had 1,673 bakery-cafes open system-wide on March 26.
In an April 24 conference call with analysts, Ron Shaich, chairman and co-chief executive officer, said sales of signature sandwiches were up 27% from the same period a year ago, and pasta, which launched nationally in the last two weeks of the first quarter, was off to a strong start.
“We believe that pasta can be a solid contributor to our lunch and dinner businesses,” Mr. Shaich said. “Well, it is very early, but we have been pleased by the customer response to our pasta product. Frankly, we are hopeful that pasta will continue to help drive new transactions and outsize growth in the late afternoon and evening segments of our business, which in turn will positively impact growth in average check.”
During the second quarter, Panera plans to roll out a new protein — shrimp. Mr. Shaich said shrimp with soba noodles will be featured in a new salad at Panera, while a shrimp salad sandwich will be introduced this summer.
“The new chilled shrimp and soba noodle salad will feature tender soba noodles tossed with our Napa cabbage blend and peanut sauce,” he said. “This noodle salad will be served alongside fresh baby spinach, tossed with orange miso dressing and topped with tender cooked shrimp and sesame seeds. Our new shrimp salad roll will feature the new shrimp tossed with lemon, tarragon mayo, leaf lettuce and avocado served on a freshly baked New England roll and topped with chopped basil and Old Bay seasoning.”
Panera also this summer will introduce several new frozen drinks as well as a strawberry rhubarb mini cake.
In addition to the release of its earnings, Panera said it is consolidating the co-chief executive roles into one position.
Bill Moreton, president and co-c.e.o. since 2010, will transition to executive vice-chairman “due to a recognition of his need to spend increased amounts of time on a family matter,” Panera said.
“As a result of this family matter, I have found myself unable to travel and am now clear I will be challenged to fully execute my responsibilities as president and co-c.e.o. of Panera Bread,” Mr. Moreton said. “Thus, the board and I agree that it is best that I evolve into a role as executive vice-chairman. In this new role, I hope to be able to fulfill my personal responsibilities while maintaining a strong engagement with Panera and assist Ron and our team in leading our company.”
Effective Aug. 1, upon Mr. Moreton’s transition, Mr. Shaich, currently chairman and co-c.e.o., again will serve as Panera’s sole c.e.o. pursuant to Panera’s management succession plan. Mr. Shaich is Panera’s founder and longtime c.e.o., having served as sole c.e.o. from May 1994 to May 2010 and co-c.e.o. from January 1988 to May 1994 and March 2012 to present.
“Bill and I have a deep personal bond with each other,” Mr. Shaich said. “We have worked together and been friends for many years. I wish we could have continued the co-c.e.o. partnership that we have created over the last 13 months, but I also know that Bill has struggled with the challenges that led to his decision to evolve his duties. All of us at Panera respect Bill’s decision and are pleased that Bill will remain an active partner of ours at Panera. In addition, knowing Bill’s need to make this decision was a possibility, we are confident that we presently have in place the leadership and capabilities necessary to execute our key initiatives and continue Panera’s record of success well into the future.”
