Panera raises outlook after strong Q3 results

A leading player in the nation's bakery sector, Panera revealed a 31 per cent surge in earnings for the quarter ended October 4 2005 to $148.6m (€124m), compared to last year's figure of $113.8m (€95m). There were a total of 30 new bakery-cafe openings in the quarter, two up on expectations, yet still short of the initial target of 41, pushing up the total number to 825. Overall bakery-cafe sales were up 8.2 per cent. The company forecasts bakery-cafe sales growth of 5.25 to 5.75 per cent in its fourth quarter, a significant increase on its previous target of 2.5 to 4 per cent. Bakery-cafe openings in the fourth quarter have been placed at 54, a reduction on its previous target as a result of delays in certain of its scheduled openings. For the year ahead, Panera expects to open between 150 and 160 new cafes, forecasting comparable bakery-cafe sales growth of 2.5 to 4.4 per cent for 2006. While Panera Bread has kept on track despite an industry-wide increase in costs, other bakery companies in the US have been harder hit by the increase in raw material prices. Interstate Bakeries Corporation (IBC), which recently announced it is to close its seventh bakery since filing for bankruptcy last September, partly blamed its financial troubles on higher ingredients and energy prices. By the time it had filed for bankruptcy, IBC had run up $1.3 billion (more than €1m) worth of debts. IBC this week announced a loss of $8m (€6.6m) for the month of September, compared to a $5.2m (€4.3m) loss reported in August. External links to companies or organisations mentioned in thisstory: Panera Bread