Panera Bread on Tuesday lowered its full-year earnings forecast as it works to speed up service at its popular bakery cafes.
Shares in the company, which cut its 2014 earnings-per-share forecast to a range of $6.60 to $6.70 from $6.65 to $6.80, fell 2.9 percent to $165.98 in extended trading.
St. Louis-based Panera also said it expects 2014 operating margins to be down 200 to 225 basis points versus last year, due to higher costs for ingredients such as butter and other dairy products, as well as investments in projects aimed at speeding up customer service.
Third-quarter net income fell more than 8 percent, to $39.2 million, or $1.46 per share. (Get the latest quote here.)
Sales at company-owned bakery cafes open at least 18 months rose 2.1 percent in the latest quarter, slightly better than the 1.7 percent increase analysts had expected, according to Consensus Metrix. The gain was primarily due to an increase in traffic.
For the first 27 days of the current fourth quarter, those sales were up 3.3 percent, Panera said.
The chain until recently was able to keep increasing restaurant sales despite the sluggish U.S. economic recovery. That run ended last fall, when Panera said it was experiencing "operational friction" that limited its ability to squeeze more sales from existing units.