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Earnings Calls: 
Panera Bread Company Earnings Call, Second Quarter 2008
Author: 123jump.com Staff
123jump.com
Last Update: 5:12 PM ET July 24 2008


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The confectionary maker reported revenues of $321 million, up 27% as net bakery cafe sales increased 31% to $274.4 million driven primarily by sales from new units, acquisitions and increases in comparable bakery cafe sales. Consequently, net income responded with a 24% rise to $15.7 million or 52 cents a share, from $12.6 million or 39 cents a share in 2007. The firm opened 19 bakery cafes, 6 of which were company owned and 13 of which were franchise operated.


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Ronald Shaich: There’s a stew of things that are going on from economic uncertainly to pricing to a whole bunch of initiatives we had that run the gamut from operations to product development.

Taken together, as you think about the first half of the year, we projected essentially down transaction growth, and in fact for the second quarter had positive transaction growth.

We know we are running against much stronger comps or transaction growth last year. We are running against a third quarter in which we were as hot as we were at any time in 2007, in which we had a very successful summer celebration, and in the context of all of that uncertainty, we think it’s appropriate to build our targets on the range of about 1.5 to 2.5% negative transaction growth.

Chris O’Cull (Suntrust Robinson Humphrey): We have seen a lot of retail development people slow openings or at delay the build-outs for obvious reasons. Do you think this could have an impact on store performance or development plans?

Ronald Shaich: It could have a positive impact. As you see any number of retailers pull back and folks like Starbucks closing 600 or 700 cafes or stores, you have a commercial real estate market that is frankly much less bullish in their attitude towards retailers and much more willing to make deals.

We have a strong very strong system with literally no weakness in it and we continue to deliver strong ROI with the improved margins that we are seeing this year, it makes things that much more attractive, and our direction to our development people is go out there and do stronger deals, do tougher deals.
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