Panera Bread: Slicing the Numbers

I’m still trying to figure this out: Panera’s (PNRA) stock is up 12% since last week’s same-store sales report and there’s no rational explanation, at least not based on the numbers. I know, I know – since when has that stopped a stock, especially one as heavily shorted as Panera.

But, still, take a look at the facts and you decide:

On July 26: Panera tumbled 10% to $52 after the company said third quarter earnings per share would be 34 cents; analysts at the time were expected 44 cents. Analysts have since brought down their forecasts. The stock subsequently hit a low of $46.85 on August 9, before starting to climb back into the $50s.

September 6: Panera slipped 5%, back to $52, after the company sliced its forecast for third quarter same-store sales to a range of 2% to 3% from 3% to 4%.

October 4: The stock zoomed to nearly $65 from around $58 after the company announced a 5.9% increase in same-store sales for the four-week period ending September 26; it’s now $66.

Same same-store sales for the quarter, meanwhile, were within the company’s revised-downward range.

Furthermore, a 4% rise in sales from the second quarter roughly matched the percentage increase in new stores, suggesting revenue per store is static despite a new push for dinner. In addition, average weekly sales for new stores, which the company in its 10-Q says tend to be higher during their first 12 to 16 weeks, appear to be trending down at a more rapid rate than prior years. Analyst John Glass of CIBC took it one step further in his report, which was headlined -- “Laugh or Cry?” – when he noted that new-unit average-weekly sales in the quarter were 9% below the chain’s average for all of last year. “We’re increasingly concerned that the company’s accelerated unit growth is taking its toll on the quality of sales at new units,” he says.

You wouldn’t know it from the stock, which is higher on lower numbers -- except for same-store sales, which companies increasingly are telling you don't really matter (unless, of course, they're going higher.) Panera reports earnings October 24.