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RVB's Market Musings

What began here as an avenue to interact and learn has far exceeded those goals.

If you are a prospective employer, please consider this site a place where you can see my passion for investing...

Wednesday, April 05, 2006

Panera Bread - 9.3% March Comps

Same store sales at Panera grew 9.3% compared to last year's March (Press Release).

No surprise there. Yesterday, I reported that I didn't expect the number to disappoint. 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 article. 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'd have liked to see a little bit better push out of the gate for '06. For Panera to get to my expectations of nearly 160 new stores this year this number is inconclusive on the year. 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.


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