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Panera Bread: All the Right Ingredients

Panera Bread is seeing the benefit of lower commodity prices both for itself and its customers. Food costs are down big, increasing the company’s margins, and lower gas prices are putting more money into consumers’ pockets. That means that once-frugal diners are now more willing to spend on a night out.

But even despite a tough 2008, Panera is up 34%. Comp sales have been in positive territory for the first three quarters, and CEO Ronald Shaich told Cramer Thursday that this quarter would be the same. Earnings are expected to jump between 46% and 54%.

“We’re not walking away from that guidance,” Shaich said.

Panera’s also sitting on $31 million in cash and should generate $70 million in free cash flow next year. That’s a great cushion to get the company through this recession. Not that Panera plans to white-knuckle the downturn. If anything, Shaich’s focused on growth.

“A recession is probably the greatest opportunity you can have,” the CEO said, “to build a company and to build a fortune.”

Watch Cramer’s interview with Shaich for more on the company’s growth prospects, cost savings and the benefits of being debt-free. You’ll find out why Cramer called Panera a “winning stock with a winning management” that is exactly “what you’re looking for in a difficult environment.”








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