Flash: Panera Bread prelim $1.18 vs $1.17 Capital IQ Consensus Estimate; revs $451 mln vs $450.00 mln Capital IQ Consensus Estimate

Panera Bread beats by $0.01, reports revs in-line; guides Q3 EPS above consensus; guides FY11 EPS in-line (129.28 +0.14)
Reports Q2 (Jun) earnings of $1.18 per share, $0.01 better than the Capital IQ Consensus Estimate of $1.17; revenues rose 19.3% year/year to $451 mln vs the $450 mln consensus. In Q2, Company-owned comparable net bakery-cafe sales increased 4.4%, franchise-operated comparable net bakery-cafe sales increased 3.6%, and system-wide comparable net bakery-cafe sales increased 3.9% compared to the comparable period in fiscal 2010. Average check growth was comprised of retail price increases of approximately 2.5% and negative mix impact of approximately (1.0)%.

Co issues upside guidance for Q3, sees EPS of $0.92-0.94 vs. $0.92 Capital IQ Consensus Estimate. This target assumes transaction growth of 1.5% to 2.0% and average check growth of approximately 2.5% to 3.0% on average year-over-year pricing of approximately 2.5%.

Co issues in-line guidance for FY11, sees EPS of $4.54-4.58 vs. $4.55 Capital IQ Consensus Estimate. The Company is revising its target for Company-owned comparable bakery-cafe sales growth to the low end of its previously targeted range, approximately 4.5% for fiscal 2011. For fiscal 2011, the Company is expecting operating margin expansion at the high-end of its previously targeted range of 0 to 50 basis points versus the prior year.

The Company is initially targeting its fiscal 2012 diluted earnings per share growth rate at the lower end of its long-term earnings growth target of 15% to 20%, based on inflationary pressures and the Company’s deployment of capital to date, which as of today is less than 1% accretive to fiscal 2012 earnings growth. The Company continues to seek to use its cash at an appropriate return as it has for the last several years. The Company’s fiscal 2012 EPS target assumes Company-owned comparable bakery-cafe sales growth of 4.0% to 5.0%, very little if any year-over-year operating margin improvement, and approximately 100 to 110 system-wide new unit openings.