Shares of Panera Bread Co. (PNRA) hit its 52-week high of $185.67 on Apr 15 and eventually closed at $182.77, generating a return of approximately 12.6% year-to-date. A positive outlook, solid fourth quarter 2012 results and an overall strong business model drove the shares of this restaurant company. Average volume of shares traded over the last three months came in at approximately 610K.
Positive First Quarter View
Panera, which is scheduled to report its first quarter 2013 earnings this month, expects earnings to be in the range of $1.62–$1.66 per share for the first quarter of 2013, reflecting 16%–19% growth.
For full-year 2013, Panera continues to expect earnings per share to grow in the range 17–19% year over year. Management reiterated its 2013 earnings per share growth expectation despite higher-than-anticipated earnings recorded in 2012.
Strong Fourth Quarter
Panera Bread’s fourth-quarter 2012 earnings of $1.75 per share surpassed the Zacks Consensus Estimate by 0.6% and the year-ago quarter’s earnings by 23.0%. Increased revenues (up 15%) along with superior operating margins led to the beat.
The company’s salads and sandwich offerings are gaining traction. In fourth-quarter 2012, signature Salad sales increased 10.0%, thereby indicating salad sales growth of 10% or more in 13 out of the last 14 quarters.
Overall a Strong Company
Panera has largely remained unruffled by the recent economic slowdown. Its competitive advantage can be validated by the fact that Panera’s comparable store sales (comps) have increased 5% or more in 10 out of the past 12 quarters.
In addition to the new menu launch, Panera has been extensively working on its marketing initiatives. Yet another key long-term growth driver for the company is the “My Panera” loyalty program. The program rewards customers for frequently visiting Panera Bread's cafes.
This company currently carries a Zacks Rank #2 (Buy)
Other Stocks to Consider
Stocks that are performing well and are worth considering in the restaurant sector include Red Robin Gourmet Burgers Inc. (RRGB), Burger King Worldwide Inc. (BKW) and Cracker Barrel Old Country Store Inc. (CBRL). While Red Robin and Cracker Barrel retain a Zacks Rank #1 (Strong Buy), Burger King carries a Zacks Rank #2 (Buy).
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