Refranchising charges cut into net income in the quarter
Panera Bread Co.’s systemwide same-store sales increased 2.3 percent in the second quarter ended June 28, the company reported Tuesday.
The St. Louis-based bakery-café chain’s second-quarter net income, which included refranchising charges, fell 17.7 percent, to $34.5 million, or $1.46 a share, from $41.9 million, or $1.60 a share, in the same quarter last year. Revenue increased 3.3 percent, to $698.9 million, from $676.7 million in the prior-year quarter.
The systemwide same-store sales growth included increases of 4.2 percent at company-owned units and 0.6 percent at franchised locations.
The company-owned same-store sales increase included transaction growth of 0.4 percent and average check growth of 3.8 percent, the company said, adding that in the first 27 days of the third quarter same-store sales had risen 3.1 percent.
“Our strong Q2 results reinforce the fact that our strategy is working and our initiatives are performing,” said Ron Shaich, Panera chairman and CEO, in a statement. “Panera is becoming a better competitive alternative with expanded runways for growth.”
Shaich said “we are maintaining our momentum” while many other restaurant companies were reporting consumer pressure on sales.
“One-year comps of 4.2 percent and two-year comps of 6.6 percent speak to the traction at Panera,” Shaich added. “Most importantly, as our initiatives roll out, we can, with the benefit of significantly more robust and mature data, now more clearly see the potential that those initiatives represent for sustained earnings growth at Panera."
Panera also said Tuesday that it had signed an agreement to sell and refranchise 12 company-owned bakery-cafés in Canada to a franchisee there. The deal was expected to close before the end of the third quarter. A charge of $7.2 million related to the pending Canadian sale was taken in the second quarter.
On May 3, Panera completed the sale of 15 bakery-cafés in the Portland, Ore., market to an existing franchisee, bringing the number of refranchised units since the start of fiscal 2015 to 90.
As of June 28, the company had 2,007 bakery-cafés in 46 states and in Ontario, Canada, operating under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Cafe names.
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