Analyst sees sales boost from new Panera products

NEW YORK - A Morgan Keegan analyst said Wednesday new products at Panera Bread Co. will likely add to the restaurant chain's sales and profit in the fourth quarter.

Analyst Bob Derrington said in a note to investors that the company's new upgraded line of soups "are likely to form the back-bone of the company's upgraded lunch and dinner offerings."

Derrington said Panera will begin offering a new, larger-size soup bowl for a 15 percent to 20 percent higher retail price.

The company will also reintroduce its Fuji-Apple salad and begin selling a Gingerbread bagel during the quarter.

In 2009, Derrington said Panera will upgrade its coffee line and add some additional bagels and pastries.

The analyst said even though the company's sales could still be affected by the downturn in the economy that has cut into consumer spending, "we believe Panera Bread's high quality foods, reasonable $7-8 all-day check average and quick, and convenient service styles present families on-the-go a high quality dining experience at a relatively affordable price."

He expects same-store sales, or sales at stores open at least a year, to grow 2.2 percent for the fourth quarter.

Derrington has an "Outperform" rating on the stock.

Panera shares fell $1.31, or 2.8 percent, to $45.27 in afternoon trading.

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