Panera Bread Reports Strong Sales, But Expectations Very High (PNRA)

Same-store sales at Panera Bread grew 9.3% compared to last year's March (press release in .pdf).

No surprise there. After hours, the stock was back up $1.09 after closing regular trading hours down $2.81.

At this point, "disappoint" might mean any same store sales growth number below 6%. Expectations are very high in the short run.

Yet it still seems that long-term growth rates are being somewhat underestimated. I think this is a mini-Starbucks in the making, although international growth potential isn't as strong. That is partially offset by average ticket prices at Panera being much higher than at Starbucks. (Starbucks has never seen a year below 20% sales growth since its IPO in the early 90's - which defies common economics and thus analyst dcf's)

I am a little concerned, however, at the tail end of this release. 22 stores opened in the first quarter? Sure, this is on pace with last year when the company opened 24 in the first 16 weeks. Winter months are the slowest. But I would have liked to see a little better push out of the gate for '06. For Panera to reach my expectations of nearly 160 new stores this year, this number is not impressive. Bummer.

35% revenue growth is a nice quarter, but at this point, still not enough to get a major move in the stock. We need a sale!

PNRA is still on my shopping list. Hoping I can some day see $65 or below.

PNRA 1-yr chart: