Menu innovation, shared leadership and additional drive-thru units had St. Louis-based Panera Bread Co. experiencing another year of growth in 2012.
Through 26 weeks ended June 26, net income of $85 million, or $2.90 per share, marked a 28% increase from $68 million, or $2.27 per share, in the same period of the previous year.
The company projected fiscal 2012 e.p.s. of $5.72 to $5.78, which would mark year-over-year e.p.s. growth of 26% to 27%. In fiscal 2011 e.p.s. growth was 28%, which marked the fourth consecutive year that Panera e.p.s. had grown 24% or greater.
As of June 26, 2012, there were 1,591 Panera bakery-cafes, including 815 franchise-operated units and 776 company-owned units. They operated under the Panera Bread, Saint Louis Bread and Paradise Bakery & Café names. In total in fiscal 2012, the Panera Bread Co. expects to open 115 to 120 units systemwide.
Development of drive-thru units was on pace to end the year with 200 units systemwide, Bill Moreton, co-chief executive officer, said in a July 25 earnings conference call.
“Our drive-thru retrofits have consistently provided a nice return on investment this year,” he said. “We expect drive-thrus to comprise approximately 40% of the new unit openings that we’re going to do in 2012.”
Ron Shaich, founder and executive chairman, and Mr. Moreton became co-c.e.o.’s in March.
“This is the kind of partnership with Ron that I’ve always wanted,” Mr. Moreton said. “It couldn’t be better for Panera, and I personally couldn’t be happier to have the opportunity to continue to share the leadership of Panera with Ron.”
Mr. Shaich said, “As many observers of Panera know, over the last year, essentially all of my time has been spent on a range of strategic and innovation efforts for Panera. I’ve continued to find Panera the best platform I know of to make a difference in the world. I am excited at the opportunities we have to do just that at Panera.”
Menu innovation came with the introduction of fresh avocados into almost 1,600 bakery-cafes.
“The addition of this ingredient and the fact that it’s fresh has allowed us to introduce our new roasted turkey and avocado BLT sandwich, as well as our new chicken cobb with avocado,” Mr. Shaich said. “Both products have created customer excitement, and both products have driven our mix positively.”
The company also is testing pasta items.
“It’s not in wide distribution in the system right now,” Mr. Moreton said. “So, it’s a product in test that we’re evaluating and potentially thinking about next year. It doesn’t have, candidly, a material impact on our results this year at all. We’re actually just at the stage where we’re trying to learn what it is, what space it occupies in the customer’s mind and how it might play in a Panera menu.”
Catering sales represented another source of growth at Panera, up 20%, net of the impact of acquisitions, in the second quarter. This level of expansion followed 31% catering sales growth in the second quarter of 2011, Mr. Shaich said.