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Panera Earnings Were Sour Dough for Street

Only Wall Street could spite a stock that reported 39% earnings growth for the quarter, Cramer said, and knock the share price down $7.50 as punishment. But that’s just what happened Wednesday with Panera Bread.

The Mad Money host couldn’t disagree more. Panera’s costs are down, consumer consumption is on the rise, and the restaurant chain still has plenty of room to grow. This stock isn’t a sell, Cramer said – it’s a buy.

Panera Bread Chairman and CEO Ronald Shaich told Mad Money today that he’s seen this before. After 72 straight quarterly earnings releases, he’s less concerned with the short-term ups and downs of PNRA. Instead he’s focused on generating returns for investors over a longer period of time, say, five or 10 years.

“We’ve had a great run,” Shaich said, pointing to Panera’s 50% jump in 2008 and about 20% increase year to date, and “we continue to have a great run.”

“The key for us is to deliver the goods,” the CEO said, “and keep focused on the customer.”

Cramer had noticed that Panera’s full-year outlook seemed conservative compared to first-quarter numbers. But Shaich said that was intentional. The company had an “extraordinarily strong” series of restaurant openings that really boosted returns, and Shaich didn’t want Wall Street thinking that would continue for the rest of 2009.

“We don’t want to pump the stock,” Shaich said. “What we want to do is deliver over the long term.”

So Shaich brushed off the market’s apparent knee-jerk reaction for “merely” meeting expectations and said he'd stick with the strategy that has been working for Panera all along.

“If we do our jobs right, we will continue to grow and continue to develop,” he said. “And if we do that, the stock will take care of itself.”

Cramer, a fan for some time now, is still bullish on PNRA. Don’t be surprised if you see an analyst downgrade on Thursday because of today’s action, though, he said. But that could be the opportunity that investors want.

“That is your chance to catch some Panera,” Cramer said.

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