St. Louis, Jan. 3 - Panera Bread Company today reported revenue increased 29% to $301 million for the fourth quarter ended December 25, 2007 from $233 million in the fourth quarter of 2006. Bakery-cafe sales accounted for $256 million of consolidated revenues while franchise royalties and fees and fresh dough sales to franchisees accounted for $45 million of consolidated revenues for the fourth quarter of 2007.
System-wide comparable bakery-cafe sales increased 1.2% for the four weeks ended December 25, 2007. The breakdown between Company-owned and franchise-operated bakery-cafes is as follows for the periods indicated:
For the 4 weeks For the 13 weeks For the fiscal year
ended ended ended
December 25, 2007 December 25, 2007 December 25, 2007
Company-owned 2.7% 2.6% 1.9%
Franchise-operated 0.3% 1.2% 1.5%
Total System 1.2% 1.7% 1.6%
The Company estimates that its system-wide comparable bakery-cafe sales in the fourth quarter were lower than expected by approximately 1.0% - 1.2% due to extreme weather experienced in its core markets. The impact experienced was similar for Company-owned and franchise-operated bakery-cafes.
Company-owned comparable bakery-cafe sales percentages are based on sales from bakery-cafes that have been in operation and Company-owned for at least 18 months. Franchise-operated comparable bakery-cafe sales percentages are based on sales from franchised bakery-cafes, as reported by franchisees, that have been in operation and franchise-operated for at least 18 months. Both Company-owned and franchise-operated comparable bakery-cafe sales exclude closed locations. System-wide comparable bakery-cafe sales percentages are based on sales at both Company-owned and franchise-operated bakery-cafes. Supplemental sales and bakery-cafe information is included in Schedule I.
Franchise-operated and system-wide comparable bakery-cafe sales percentages are non-GAAP measures, which should not be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP and may not be comparable to system-wide comparable bakery-cafe sales as defined or used by other companies. The Company does not record franchise-operated bakery-cafe sales as revenues. However, the Company's royalty revenues are calculated based on a percentage of franchise-operated bakery-cafe sales. Management uses franchise-operated and system-wide sales information internally in connection with store development decisions, planning, and budgeting analyses. Management believes franchise-operated and system-wide sales information is useful in assessing consumer acceptance of the Company's brand, facilitates an understanding of financial performance and the overall direction and trends of sales and operating income, helps the Company appreciate the effectiveness of its advertising and marketing initiatives to which the Company's franchisees contribute based on a percentage of their sales, and provides information that is relevant for comparison within the industry.
During the fourth quarter of 2007, 64 new bakery-cafes were opened (39 Company-owned and 25 franchise-operated) and 2 franchise-operated bakery-cafes were closed.
As previously reported in the third quarter 2007 earnings release issued on October 23, 2007, beginning in fiscal year 2008, the Company will no longer issue monthly sales releases but rather will include this information, along with its quarterly sales release, in its quarterly earnings release. This change is being made to conform to reporting frequencies commonly followed by many of its peers. The schedule of preliminary earnings release dates for fiscal year 2008 has been updated since the third quarter 2007 earnings release and is attached as Schedule II.
Panera Bread Company owns and franchises 1,167 bakery-cafes under the Panera Bread(R) and Saint Louis Bread Co.(R) names as of December 25, 2007. With its identity rooted in handcrafted, fresh-baked, artisan bread, Panera Bread is committed to providing great tasting, quality food that people can trust. Highlighted by antibiotic free chicken, whole grain bread, select organic and all-natural ingredients and a menu free of man-made trans fat, Panera's bakery-cafe selection offers flavorful, wholesome offerings. The menu includes a wide variety of year-round favorites, complemented by new items introduced seasonally with the goal of creating new standards in everyday food choices. In neighborhoods across the country, guests are enjoying Panera's warm and welcoming environment featuring comfortable gathering areas, relaxing decor, and free internet access provided through a managed WiFi network. At the close of each day, Panera Bread bakery-cafes donate bread and baked goods to community organizations in need. Additional information is available on the Company's website, panerabread.com. Panera also holds a 51% interest in Paradise Bakery & Cafe, Inc., owner and franchisor of 63 bakery-cafes as of December 25, 2007.
PANERA BREAD COMPANY
Schedule I - Supplemental Sales and Bakery-Cafe Information
Historical System-Wide AWS
2007 2006 2005 2004 2003 2002
AWS $38,670 $39,150 $38,318 $36,008 $35,617 $35,388
2007 System-Wide AWS By Year Opened
2005 Opens
2007 Opens 2006 Opens & Prior Total
Bakery-Cafes 170 160 900 1,230
Q1 07 $37,213 $33,265 $39,284 $38,359
Q2 07 $35,171 $32,981 $39,388 $38,273
Q3 07 $34,258 $33,716 $39,185 $38,051
Q4 07 $35,094 $35,359 $41,422 $39,921
2007 YTD $34,968 $33,832 $39,820 $38,670
Year-Over-Year Change in System-Wide AWS and Comp Sales
2006 Opens 2005 Opens
2007 Opens (a) & Prior AWS Total Comp Sales Total
Q1 07 N/A -25.9% -0.5% -2.9% 0.0%
Q2 07 N/A -9.8% 1.7% -0.9% 2.1%
Q3 07 N/A -2.8% 2.0% -0.1% 2.6%
Q4 07 N/A 1.3% 0.8% -1.0% 1.7%
2007 YTD N/A -4.6% 1.0% -1.2% 1.6%
(a) Change in system-wide AWS in 2007 from 2006 compares 169 bakery-cafes
in 2007 against 22, 65, 103 and 155 bakery-cafes at the end of the
first, second, third and fourth quarters of 2006, respectively.
2007 Sales Metrics for Company-Owned Bakery-Cafes
Bakery-Cafe Sales Operating Year-Over-Year Change
($ in 000's) Weeks AWS AWS Comp Sales
Q1 07 $197,118 5,351 $36,839 -3.2% -0.6%
Q2 07 $209,626 5,658 $37,050 -0.5% 1.7%
Q3 07 $232,244 6,254 $37,136 0.6% 3.4%
Q4 07 $255,914 6,571 $38,947 -0.2% 2.6%
2007 YTD $894,902 23,834 $37,548 -0.8% 1.9%
2007 Sales Metrics for Franchise-Operated Bakery-Cafes
Bakery-Cafe Sales Operating Year-Over-Year Change
($ in 000's) Weeks AWS AWS Comp Sales
Q1 07 $334,942 8,520 $39,313 -2.5% 0.2%
Q2 07 $345,329 8,842 $39,056 -0.8% 2.3%
Q3 07 $335,900 8,677 $38,711 -0.1% 2.1%
Q4 07 $360,363 8,866 $40,644 -1.1% 1.2%
2007 YTD $1,376,534 34,905 $39,436 -1.1% 1.5%
Bakery-Cafe Openings
Company Franchise Total Company Franchise Total
Q1 07 14 17 31 Q1 06 9 13 22
Q2 07 17 22 39 Q2 06 18 25 43
Q3 07 19 16 35 Q3 06 17 21 38
Q4 07 39 25 64 Q4 06 26 26 52
2007 YTD 89 80 169 2006 YTD 70 85 155
Note: Bakery-cafe sales, operating weeks, AWS and bakery-cafe openings
metrics include activity for Paradise Bakery & Cafe prospectively
from the acquisition date of February 1, 2007. The 2007 bakery-cafe
openings do not include one Paradise franchise-operated bakery-cafe
which opened in January 2007.
AWS - average weekly sales for the time periods indicated.
Comp Sales - comparable bakery-cafe sales increases for the time period
indicated, which exclude closed locations and are based on sales for
bakery-cafes that have been in operation and owned for at least 18 months.