U.S. News

Panera Cuts Second-Quarter Forecast on Weak Same-Store Sales

Casual-dining chain operator Panera Bread on Wednesday cut its earnings and same-store sales guidance for the second quarter on lower same-store sales expectations and rising costs.

The company now estimates earnings between 38 cents and 40 cents per share, versus previous guidance of earnings between 47 cents and 51 cents per share. A year ago, the company made 44 cents per share.

Analysts polled by Thomson Financial forecast profit of 49 cents per share.

Panera said same-store sales, or sales in stores open at least 18 months, should rise 1.5% to 2.5%. Previous guidance called for same-store sales growth of 3.5% to 4.5%.

Same-store sales are a key measure of restaurant performance, because they measure growth at existing stores rather than from newly opened ones.

Panera said margin pressure is growing because of a shift away from products self-made in its fresh-dough facilities, as well as rising costs for gasoline and other items.

Panera shares fell $4.12, or 7.1%, to $54.20 in premarket electronic trading, after closing at $58.32 on Tuesday.

The lowered guidance comes as Panera reported same-store sales rose 1.2% in May.

For the five weeks ended May 29, company owned same-store sales rose 1.1%, while franchise-operated same-store sales grew 1.3%.

Year-to-date, same-store sales are up 0.8%, including a 0.3% rise at company-owned stores and a 1.1% rise at franchise-operated same-store sales.