Panera Bread Co. reported Tuesday a 24.8-percent decrease in net income during the first quarter ended March 31, which included nearly $5.6 million in after-tax charges for its ongoing refranchising initiative.
The St. Louis-based bakery-café operator said net income was $31.9 million, or $1.20 per share, during the quarter, compared with $42.4 million, or $1.55 per share, the previous year. Excluding the refranchising charges, net income in the quarter was $37.4 million, or $1.41 per share. Revenue rose 7.1 percent, to $648.5 million, from $605.3 million the previous year.
The company said it was making significant progress on its plan to refranchise 50 to 150 bakery-cafés, and entered into letters of intent to refranchise 73 bakery-cafés.
“Excluding one-time charges, the company expects the sale of these bakery-cafés to be accretive to ongoing earnings,” Panera said in a statement.
Earlier this month, Panera said it was authorizing $500 million in new debt to buy back shares following a “constructive dialogue" with activist hedge fund Luxor Capital Group LP.
The company said systemwide same-store sales increased 0.7 percent during the quarter. Same-store sales at corporate locations rose 1.5 percent, and decreased 0.1 percent at franchised units.
Panera chairman and CEO Ron Shaich said the company is intent on growing “adjacent businesses,” including catering, delivery and consumer products.
“As expected, these investments negatively impacted first-quarter results,” he said in a statement.
As of March 31, Panera had 1,901 bakery-cafés in 45 states and Ontario, Canada, operating under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Café brands.
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