New products, including pasta, in Panera pipeline

by Eric Schroeder
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ST. LOUIS — Investments in food have driven strong quarterly results at Panera Bread Co., including during the most recent quarter ended Sept. 25 in which net income increased 27% and sales rose 17%.

The addition of the chopped chicken cobb with avocado salad drove signature salad sales up nearly 12% in the third quarter, while the introduction of the roasted turkey and avocado BLT sandwich propelled signature sandwich sales by 28% during the quarter.

In the fourth quarter, Panera will focus on its hot sandwich platform with the launch of Big Kids Grilled Cheese.

“This is not your run-of-the-mill grilled cheese sandwich,” said Ron Shaich, chairman and co-chief executive officer, in an Oct. 24 conference call with analysts. “This is a grilled cheese sandwich done the Panera way. This new signature sandwich includes Gruyere cheese, a Vermont white cheddar. It includes organic American cheese and Applewood-smoked bacon, all grilled on our new, all-natural white miche.”

Another product in the pipeline is pasta, which is being tested and may be rolled out in 2013, Mr. Shaich said.

“I wouldn’t be surprised to see pasta on our menu in 2013,” he said. “I think you’re likely to see two or three pasta products. They, again, are part of the stew. They aren’t going to change or create an inflection point of any kind that we would project out. We think it’s an appropriate product for both lunch, late afternoon and for evening. Those are businesses that we’re in today.”

The pasta dishes in test include pasta sacchettini, which is a purse-like pasta filled with six all-natural cheeses in basil pesto sauce; rustic penne Bolognese; and tortellini Alfredo.

Net income at Panera Bread in the third quarter ended Sept. 25 was $36,515,000, equal to $1.25 per share on the common stock, up from $28,848,000, or 98c per share, in the same period a year ago. Total revenue during the third quarter totaled $529,338,000, up 17% from $453,087,000.

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