Panera Bread Company (NASDAQ:PNRA) today reported financial results
for fiscal Q1 2017.
HIGHLIGHTS
- Q1 2017 GAAP Diluted EPS of $1.88, up
30%
- Q1 2017 Non-GAAP Diluted EPS of $1.83, up
17%
- Q1 2017 Company-owned comparable net
bakery-cafe sales up 5.3%, up 11.5% on a two-year
basis
- Q1 2017 Company-owned comp sales
outperform Black Box all-industry composite by 690 basis
points
- Digital sales now at 26% of total sales
in Company-owned bakery-cafes
- Delivery now available in 24% of
system-wide bakery-cafes
RECENT DEVELOPMENTSOn April 4,
2017, the Company and JAB entered into a definitive merger
agreement under which JAB will acquire Panera for $315 per share in
cash, in a transaction valued at approximately $7.5 billion,
including the assumption of approximately $340 million of net debt.
The merger agreement was unanimously approved by the Company's
Board of Directors.
The transaction is not subject to a financing
condition and is expected to close during the third quarter of
2017, subject to the approval of the Company's shareholders and the
satisfaction of customary closing conditions, including applicable
regulatory approvals.
Comment by Chairman and CEO
Ron Shaich, Chairman and CEO, commented, “Over the
last five years, we have developed and executed a powerful
strategic plan to be a better competitive alternative with expanded
runways for growth. The themes we have bet on - digital, clean
food, loyalty, delivery, and new formats for growth - are shaping
the restaurant industry today. Outside the big three pizza players,
Panera is leading the industry in digital, with 26% of sales now
digital. We are the first and only national restaurant chain with a
100% clean menu. Our loyalty program is the largest in the industry
at 25 million members with half our transactions through the
program. And our omni-channel approach leads the industry, with
delivery now available in 24% of the system and catering sales
growing 11%.”
Shaich continued, “Indeed, the power of our plan is
evident in our business results. In Q1, our Company-owned
bakery-cafe comps were up 5.3%. What’s more, we continued to take
market share in Q1, as our comps outperformed the Black Box
all-industry composite by 690 basis points. With peak investments
and significant scale behind us, our year-over-year growth in GAAP
EPS was up 30% and non-GAAP EPS was up 17% in Q1, our best quarter
in four years, which is further evidence that we have reached an
inflection point in our transformation.”
Shaich concluded, “Finally, as this may be the last
quarter in which we report as a public company, I would like to
thank our shareholders and the financial community for their
support of Panera, and me personally, over our more than two
decades as a public company. Know that your support of our approach
to building value over the long term and our efforts to truly serve
all stakeholders has enabled Panera to be the best-performing
restaurant stock when measured over the last 20 years.
Specifically, all of us at Panera are so very pleased we have been
able to deliver for our long-term shareholders, generating
annualized returns of 26% from April 18, 1997 to April 24,
2017.”
Fiscal Q1 2017 Results and Business
Review
GAAP net income for fiscal Q1 2017 was $42 million,
or $1.88 per diluted share, or up 30% when compared to GAAP net
income for fiscal Q1 2016 of $35 million, or $1.45 per diluted
share.
Non-GAAP diluted EPS was $1.83 for fiscal Q1 2017
and $1.56 for fiscal Q1 2016, up 17% (see table below). A
reconciliation of GAAP and non-GAAP information and the reasons why
the Company uses non-GAAP financial measures is attached to this
release as Schedule IV.
The Company's fiscal Q1 2017 consolidated
statements of income and margin analyses are attached to this
release as Schedule I. The following table sets forth, for
the periods indicated, certain items included in the Company's
consolidated statements of income (in thousands, except per share
data and percentages), including GAAP net income and diluted EPS
and non-GAAP net income and diluted EPS:
|
|
For the 13 Weeks Ended |
|
Percentage |
|
|
March 28, 2017 |
|
March 29, 2016 |
|
Change |
|
|
|
|
|
|
|
Total revenue |
|
$727,633 |
|
|
$685,153 |
|
|
6% |
|
|
|
|
|
|
|
Net income, as reported
(GAAP) |
|
$42,494 |
|
|
$35,088 |
|
|
21% |
Intangible asset
impairment charge |
|
3,021 |
|
|
— |
|
|
|
Field manager bonus
program adjustment |
|
(4,825 |
) |
|
— |
|
|
|
Refranchising loss |
|
— |
|
|
1,071 |
|
|
|
Amount reserved for a
legal matter |
|
— |
|
|
3,248 |
|
|
|
Tax impact of
adjustments |
|
641 |
|
|
(1,576 |
) |
|
|
Net income, excluding
certain items (Non-GAAP) |
|
$41,331 |
|
|
$37,831 |
|
|
9% |
|
|
|
|
|
|
|
Diluted EPS, as
reported (GAAP) |
|
$1.88 |
|
|
$1.45 |
|
|
30% |
Intangible asset
impairment charge |
|
0.13 |
|
|
— |
|
|
|
Field manager bonus
program adjustment |
|
(0.21 |
) |
|
— |
|
|
|
Refranchising loss |
|
— |
|
|
0.04 |
|
|
|
Amount reserved for a
legal matter |
|
— |
|
|
0.13 |
|
|
|
Tax impact of
adjustments |
|
0.03 |
|
|
(0.06 |
) |
|
|
Diluted EPS, excluding
certain items (Non-GAAP) |
|
$1.83 |
|
|
$1.56 |
|
|
17% |
|
|
|
|
|
|
|
Shares used in diluted
EPS |
|
22,624 |
|
|
24,214 |
|
|
-7% |
|
|
|
|
|
|
|
|
|
Comparable Net Bakery-Cafe Sales Growth
In fiscal Q1 2017, Company-owned comparable net
bakery-cafe sales increased 5.3%, franchise-operated comparable net
bakery-cafe sales increased 0.3%, and system-wide comparable net
bakery-cafe sales increased 2.6% compared to the same period in
fiscal 2016. Two-year Company-owned comparable net
bakery-cafe sales increased 11.5%, two-year franchise-operated
comparable net bakery-cafe sales increased 3.6%, and two-year
system-wide comparable net bakery-cafe sales increased 7.3%.
Additionally, Company-owned comparable net bakery-cafe sales in
fiscal Q1 2017 outperformed the Black Box all-industry composite by
690 basis points. A schedule of comparable net bakery-cafe
sales information, including the Omni-Channel View and Historical
View disaggregation methods, is attached to this release as
Schedule III.
Operating Margin
GAAP operating margin for fiscal Q1 2017 increased
approximately 150 basis points versus fiscal Q1 2016.
Excluding certain items in both fiscal periods, as outlined in
Schedule IV, non-GAAP operating margin for fiscal Q1 2017 increased
approximately 30 basis points versus fiscal Q1 2016. The
increase in non-GAAP operating margin was primarily driven by lower
food cost, partially offset by structural wage increases and added
labor hours for our delivery initiative.
New Bakery-Cafe Development and AWS
During fiscal Q1 2017, the Company opened 10 new
bakery-cafes and its franchisees opened three new
bakery-cafes. As a result, there were 2,042 bakery-cafes open
system-wide as of March 28, 2017.
|
Company-Owned |
|
Franchise-Operated |
|
Total System |
Bakery-cafes as of
December 27, 2016 |
902 |
|
|
1,134 |
|
|
2,036 |
|
Bakery-cafes
opened |
10 |
|
|
3 |
|
|
13 |
|
Bakery-cafes
closed |
(2 |
) |
|
(5 |
) |
|
(7 |
) |
Bakery-cafes as of
March 28, 2017 |
910 |
|
|
1,132 |
|
|
2,042 |
|
Average weekly sales (“AWS”) for Company-owned
"Class of 2017" bakery-cafes through fiscal Q1 2017 was
$64,506. AWS for franchise-operated "Class of 2017"
bakery-cafes through fiscal Q1 2017 was $46,899.
A schedule of fiscal Q1 2017 AWS, including AWS
information for bakery-cafes based on their designation as either a
traditional or non-traditional bakery-cafe, is attached to this
release as Schedule II. Non-traditional bakery-cafes refers
to a range of alternate formats that the Company believes will
allow it to more deeply penetrate existing and new territories with
a range of different formats.
Share Repurchases
During fiscal Q1 2017, the Company repurchased
235,936 shares at an average price of $211.89 per share for an
aggregate purchase price of approximately $50 million. The
Company has approximately $347.7 million available under the
current $600 million repurchase authorization as of fiscal Q1
2017.
Fiscal 2017 Outlook, Conference Call, and
Annual Shareholder Meeting Update
On April 4, 2017, the Company and JAB entered into
a definitive merger agreement under which JAB will acquire
Panera. The Company will not be updating its outlook for
fiscal 2017 and will not be holding a conference call to discuss
its fiscal Q1 2017 results. The Company’s Board of Directors
has postponed the Company’s 2017 Annual Meeting of Shareholders,
originally scheduled for May 18, 2017.
Notes:
The Company includes in this release information on
Company-owned, franchise-operated, and system-wide comparable net
bakery-cafe sales percentages. Company-owned comparable net
bakery-cafe sales percentages are based on net sales from
Company-owned bakery-cafes included in base store
bakery-cafes. Franchise-operated comparable net bakery-cafe
sales percentages are based on net sales from franchised
bakery-cafes, as reported by franchisees, which are included in
base store bakery-cafes. Acquired Company-owned and
franchise-operated bakery-cafes and other restaurant or bakery-cafe
concepts are included in the Company's comparable net bakery-cafe
sales percentages after it has acquired a 100 percent ownership
interest and if such acquisition occurred prior to the first day of
the Company's prior fiscal year. Comparable net bakery-cafe
sales exclude closed locations.
The Company does not record franchise-operated net
bakery-cafe sales as revenues. However, royalty revenues are
calculated based on a percentage of franchise-operated net
bakery-cafe sales, as reported by franchisees. The Company
uses franchise-operated and net system-wide sales information
internally in connection with store development decisions,
planning, and budgeting analyses. The Company believes
franchise-operated and net system-wide sales information is useful
in assessing consumer acceptance of its brand; facilitates an
understanding of its financial performance and the overall
direction and trends of sales and operating income; helps the
Company appreciate the effectiveness of its advertising and
marketing initiatives, which its franchisees also contribute to
based on a percentage of their net sales; and provides information
that is relevant for comparison within the industry.
About Panera Bread Company
Thirty years ago, at a time when quick service
meant low quality, Panera set out to challenge this expectation. We
believed that food that was good and that you could feel good
about, served in a warm and welcoming environment by people who
cared, could bring out the best in all of us. To us, that is food
as it should be and that is why we exist.
So we began with a simple commitment: to bake fresh
bread from fresh dough in every bakery-cafe, every day. No
artificial preservatives or short cuts, just bakers with simple
ingredients and hot ovens. Each night, any unsold bread and baked
goods were shared with neighbors in need.
These traditions carry on today, as we have
continued to find ways to be an ally to our guests. That means
crafting a menu of soups, salads and sandwiches that we are proud
to feed our families. Like poultry and pork raised without
antibiotics on our salads and sandwiches. A commitment to
transparency and options that empower our guests to eat the way
they want. Seasonal flavors and whole grains. And a commitment to
removing artificial additives (flavors, colors, sweeteners and
preservatives) from the food in our bakery-cafes. Why? Because we
think that simpler is better and we believe in serving food as it
should be. Because when you don’t have to compromise to eat well,
all that is left is the joy of eating.
We’re also focused on improving quality and
convenience. With investments in technology and operations, we now
offer new ways to enjoy your Panera favorites - like mobile
ordering and Rapid Pick-Up for to-go orders - all designed to make
things easier for our guests. As of March 28, 2017, there were
2,042 bakery-cafes in 46 states and in Ontario, Canada operating
under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery
& Cafe® names. For more information, visit panerabread.com or
find us on Twitter (@panerabread), Facebook
(facebook.com/panerabread) or Instagram (@panerabread).
Additional Information and Where to Find
It
This communication relates to the proposed merger
involving Panera Bread Company (“Panera”) and JAB Holdings B.V.,
Rye Parent Corp. (“Rye Corp.”) and Rye Merger Sub, Inc. In
connection with the proposed merger, Panera and Rye Corp. intend to
file relevant materials with the Securities and Exchange Commission
(the “SEC”), including Panera’s proxy statement on Schedule 14A
(the “Proxy Statement”). This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval, and is
not a substitute for the Proxy Statement or any other document that
Panera may file with the SEC or send to its stockholders in
connection with the proposed merger. STOCKHOLDERS OF PANERA
ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING THE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain the documents free of
charge at the SEC’s web site, http://www.sec.gov and Panera
stockholders will receive information at an appropriate time on how
to obtain transaction-related documents for free from Panera.
Participants in the
Solicitation
Panera, Rye Corp. and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the holders of Common Stock in respect
of the proposed merger. Information about the directors and
executive officers of Panera is set forth in the proxy statement
for Panera’s 2016 Annual Meeting of stockholders, which was filed
with the SEC on April 15, 2016, and in Panera’s Annual Report on
Form 10-K for the fiscal year ended December 27, 2016, which was
filed with the SEC on February 22, 2017. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the Proxy Statement and
other relevant materials to be filed with the SEC in respect of the
proposed transaction when they become available.
Forward-Looking Statements
Certain statements contained in this news release
and in our public disclosures, whether written or oral, relating to
future events or our future performance, including any discussion,
expressed or implied, regarding our anticipated growth, operating
results, future earnings per share, plans, objectives, and the
impact of our investments in sales-building initiatives and
operational capabilities on future sales and earnings, contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
are often identified by the words “believe,” “positioned,”
“estimate,” “project,” “target,” “plan,” “goal,” “assumption,”
“continue,” “intend,” “expect,” “future,” “anticipate,” and other
similar expressions, whether in the negative or the affirmative,
that are not statements of historical fact.
These forward-looking statements are not guarantees
of future performance and involve certain risks, uncertainties, and
assumptions that are difficult to predict, and you should not place
undue reliance on our forward-looking statements. Our actual
results and timing of certain events could differ materially from
those anticipated in these forward-looking statements as a result
of certain factors, including, but not limited to: the risk that
Panera’s shareholders do not approve the merger; uncertainties as
to the timing of the merger; the conditions to the completion of
the merger may not be satisfied, or the regulatory approvals
required for the merger may not be obtained on the terms expected
or on the anticipated schedule; the parties’ ability to meet
expectations regarding the timing, completion and accounting and
tax treatments of the merger; the occurrence of any event, change
or other circumstance that could give rise to the termination of
the merger agreement; the effect of the announcement or pendency of
the merger on Panera’s business relationships, operating results,
and business generally; risks that the merger disrupts current
plans and operations of Panera and potential difficulties in
Panera’s employee retention as a result of the merger; risks
related to the merger diverting management’s attention from
Panera’s ongoing business operations; the outcome of any legal
proceedings that may be instituted against Panera related to the
merger agreement or the merger; the amount of the costs, fees,
expenses and other charges related to the merger; and other factors
discussed from time to time in our reports filed with the SEC,
including our Annual Report on Form 10-K for the fiscal year ended
December 27, 2016. All forward-looking statements and
the internal projections and beliefs upon which we base our
expectations included in this release are made only as of the date
of this release and may change. While we may elect to update
forward-looking statements at some point in the future, we
expressly disclaim any obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of
the date hereof.
Schedule I
PANERA BREAD COMPANY |
CONSOLIDATED STATEMENTS OF INCOME |
(unaudited) |
(In thousands, except per share amounts) |
|
|
|
For the 13 Weeks Ended |
|
March 28, 2017 |
|
March 29, 2016 |
Revenues: |
|
|
|
Bakery-cafe sales, net |
$ |
636,012 |
|
|
$ |
598,784 |
|
Franchise
royalties and fees |
40,369 |
|
|
37,852 |
|
Fresh
dough and other product sales to franchisees |
51,252 |
|
|
48,517 |
|
Total
revenues |
$ |
727,633 |
|
|
$ |
685,153 |
|
Costs and
expenses: |
|
|
|
Bakery-cafe expenses: |
|
|
|
Cost of
food and paper products |
$ |
180,892 |
|
|
$ |
176,685 |
|
Labor |
212,453 |
|
|
191,562 |
|
Occupancy |
42,795 |
|
|
41,920 |
|
Other
operating expenses (1) |
84,899 |
|
|
88,431 |
|
Total
bakery-cafe expenses |
521,039 |
|
|
498,598 |
|
Fresh
dough and other product cost of sales to franchisees |
43,925 |
|
|
42,218 |
|
Depreciation and amortization |
40,555 |
|
|
36,257 |
|
General
and administrative expenses |
49,241 |
|
|
48,182 |
|
Pre-opening expenses |
1,367 |
|
|
2,196 |
|
Refranchising loss |
— |
|
|
1,071 |
|
Total
costs and expenses |
656,127 |
|
|
628,522 |
|
Operating profit |
71,506 |
|
|
56,631 |
|
Interest expense |
3,117 |
|
|
1,739 |
|
Other (income) expense,
net (2) |
2,782 |
|
|
(251 |
) |
Income before income
taxes |
65,607 |
|
|
55,143 |
|
Income taxes |
23,439 |
|
|
20,145 |
|
Net
income |
42,168 |
|
|
34,998 |
|
Less: Net loss
attributable to noncontrolling interest |
(326 |
) |
|
(90 |
) |
Net
income attributable to Panera Bread Company |
$ |
42,494 |
|
|
$ |
35,088 |
|
|
|
|
|
Earnings per common
share: |
|
|
|
Basic |
$ |
1.89 |
|
|
$ |
1.46 |
|
Diluted |
$ |
1.88 |
|
|
$ |
1.45 |
|
Weighted average shares
of common and common equivalent shares outstanding: |
|
|
|
Basic |
22,488 |
|
|
24,105 |
|
Diluted |
22,624 |
|
|
24,214 |
|
|
|
|
|
|
|
(1) Other
operating expenses for fiscal Q1 2017 includes a $4.8 million
benefit related to the redesign of the field manager bonus program.
Refer to Schedule IV for a reconciliation of GAAP and non-GAAP
information and the reasons why the Company uses non-GAAP financial
measures. |
(2) Other
(income) expense, net for fiscal Q1 2017 includes a $3.0 million
intangible asset impairment charge of the Paradise trademark. Refer
to Schedule IV for a reconciliation of GAAP and non-GAAP
information and the reasons why the Company uses non-GAAP financial
measures. |
|
|
|
|
|
|
Schedule I (continued)
PANERA BREAD COMPANY |
CONSOLIDATED STATEMENTS OF INCOME |
MARGIN ANALYSIS |
(unaudited) |
|
The
following table sets forth the percentage relationship to total
revenues, except where otherwise indicated, of certain items
included in the Company's consolidated statements of income for the
period indicated. Percentages may not add due to
rounding: |
|
|
|
|
|
For the 13 Weeks Ended |
|
|
March 28, 2017 |
|
March 29, 2016 |
Revenues: |
|
|
|
|
Bakery-cafe sales, net |
|
87.4 |
% |
|
87.4 |
% |
Franchise
royalties and fees |
|
5.5 |
|
|
5.5 |
|
Fresh
dough and other product sales to franchisees |
|
7.0 |
|
|
7.1 |
|
Total
revenues |
|
100.0 |
% |
|
100.0 |
% |
Costs and
expenses: |
|
|
|
|
Bakery-cafe expenses (1): |
|
|
|
|
Cost of
food and paper products |
|
28.4 |
% |
|
29.5 |
% |
Labor |
|
33.4 |
|
|
32.0 |
|
Occupancy |
|
6.7 |
|
|
7.0 |
|
Other
operating expenses (3) |
|
13.3 |
|
|
14.8 |
|
Total
bakery-cafe expenses |
|
81.9 |
|
|
83.3 |
|
Fresh
dough and other product cost of sales to franchisees (2) |
|
85.7 |
|
|
87.0 |
|
Depreciation and amortization |
|
5.6 |
|
|
5.3 |
|
General
and administrative expenses |
|
6.8 |
|
|
7.0 |
|
Pre-opening expenses |
|
0.2 |
|
|
0.3 |
|
Refranchising loss |
|
— |
|
|
0.2 |
|
Total
costs and expenses |
|
90.2 |
|
|
91.7 |
|
Operating profit |
|
9.8 |
|
|
8.3 |
|
Interest expense |
|
0.4 |
|
|
0.3 |
|
Other (income) expense,
net (4) |
|
0.4 |
|
|
— |
|
Income before income
taxes |
|
9.0 |
|
|
8.0 |
|
Income taxes |
|
3.2 |
|
|
2.9 |
|
Net
income |
|
5.8 |
|
|
5.1 |
|
Less: Net loss
attributable to noncontrolling interest |
|
— |
|
|
— |
|
Net
income attributable to Panera Bread Company |
|
5.8 |
% |
|
5.1 |
% |
|
|
|
|
|
|
|
(1) As a
percentage of net bakery-cafe sales. |
(2) As a
percentage of fresh dough and other product sales to
franchisees. |
(3) Other
operating expenses for fiscal Q1 2017 includes 80 basis points of
favorability related to the redesign of the field manager bonus
program. Refer to Schedule IV for a reconciliation of GAAP and
non-GAAP information and the reasons why the Company uses non-GAAP
financial measures. |
(4) Other
(income) expense, net for fiscal Q1 2017 includes 40 basis points
of unfavorability due to an intangible asset impairment charge of
the Paradise trademark. Refer to Schedule IV for a reconciliation
of GAAP and non-GAAP information and the reasons why the Company
uses non-GAAP financial measures. |
|
Schedule II
PANERA BREAD
COMPANYSupplemental Sales and Bakery-Cafe
Information
|
|
Company-Owned Average Weekly Sales
("AWS") |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY |
2017 |
|
$ |
53,787 |
|
|
|
|
|
|
|
$ |
53,787 |
2016 |
|
$ |
50,550 |
|
$ |
51,244 |
|
$ |
50,197 |
|
$ |
53,688 |
|
$ |
51,416 |
2015 |
|
$ |
47,478 |
|
$ |
49,054 |
|
$ |
48,364 |
|
$ |
51,545 |
|
$ |
49,090 |
2014 |
|
$ |
47,142 |
|
$ |
48,313 |
|
$ |
46,936 |
|
$ |
50,002 |
|
$ |
48,114 |
2013 |
|
$ |
47,144 |
|
$ |
48,700 |
|
$ |
46,239 |
|
$ |
48,781 |
|
$ |
47,741 |
2012 |
|
$ |
45,426 |
|
$ |
47,113 |
|
$ |
45,894 |
|
$ |
48,811 |
|
$ |
46,836 |
|
|
Franchise-Operated AWS |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY |
2017 |
|
$ |
48,150 |
|
|
|
|
|
|
|
$ |
48,150 |
2016 |
|
$ |
48,206 |
|
$ |
48,040 |
|
$ |
46,786 |
|
$ |
48,715 |
|
$ |
47,938 |
2015 |
|
$ |
46,614 |
|
$ |
47,680 |
|
$ |
46,734 |
|
$ |
49,541 |
|
$ |
47,680 |
2014 |
|
$ |
46,717 |
|
$ |
47,290 |
|
$ |
45,881 |
|
$ |
48,934 |
|
$ |
47,215 |
2013 |
|
$ |
46,800 |
|
$ |
47,750 |
|
$ |
45,769 |
|
$ |
47,919 |
|
$ |
47,079 |
2012 |
|
$ |
45,714 |
|
$ |
46,289 |
|
$ |
45,692 |
|
$ |
48,360 |
|
$ |
46,526 |
|
Traditional and Non-Traditional AWS
[a] |
|
Company-Owned |
|
Franchise-Operated |
|
2017
Opens |
|
2016
Opens |
|
2017
Opens |
|
2016
Opens |
Traditional Bakery-Cafes |
8 |
|
15 |
|
3 |
|
12 |
Non-Traditional Bakery-Cafes |
2 |
|
2 |
|
— |
|
1 |
Traditional AWS |
$66,574 |
|
$60,162 |
|
$46,899 |
|
$51,843 |
Non-Traditional AWS |
$53,003 |
|
$52,588 |
|
— |
|
$49,368 |
Total |
$64,506 |
|
$58,883 |
|
$46,899 |
|
$51,641 |
|
|
|
|
|
|
|
|
[a]
Represents year-to-date bakery-cafe openings and AWS for fiscal
2017 and fiscal 2016. Traditional bakery-cafes generally
represent bakery-cafes opened in suburban geographies approximating
our standard 4,200 square foot design. Non-traditional
bakery-cafes reflect all other bakery-cafes including urban, small
footprint formats, and delivery units. Because the
non-traditional bakery-cafe designation covers various formats and
the formats of non-traditional bakery-cafe openings may vary from
period-to-period, comparing AWS for non-traditional bakery-cafes on
a year-over-year basis may not be meaningful. |
|
|
|
Bakery-Cafe Openings (excluding acquisitions)
[b] |
|
|
Company |
|
Franchise |
|
Total |
|
Company |
|
Franchise |
|
Total |
Q1
17 |
|
10 |
|
3 |
|
13 |
Q1
16 |
17 |
|
13 |
|
30 |
Q2
17 |
|
|
|
|
|
|
Q2
16 |
9 |
|
8 |
|
17 |
Q3
17 |
|
|
|
|
|
|
Q3
16 |
11 |
|
9 |
|
20 |
Q4
17 |
|
|
|
|
|
|
Q4
16 |
11 |
|
15 |
|
26 |
2017
YTD |
|
10 |
|
3 |
|
13 |
2016
YTD |
48 |
|
45 |
|
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
[b]
Bakery-cafe openings presented above exclude the opening of
delivery hubs. |
|
Schedule III
PANERA BREAD COMPANY |
Comparable Net Bakery-Cafe Sales
Information |
|
|
|
|
|
Set forth
below is comparable net bakery-cafe sales growth information
comparing fiscal Q1 2017 to comparable periods in the prior
year: |
|
|
|
|
|
|
For the 4 Weeks Ended |
For the 5 Weeks Ended |
For the 4 Weeks Ended |
For the 13 Weeks Ended |
|
January 24, 2017 |
February 28, 2017 |
March 28, 2017 |
March 28, 2017 |
Company-owned |
5.3% |
4.8% |
6.0% |
5.3% |
Franchise-operated |
0.2% |
-0.2% |
1.0% |
0.3% |
System-wide |
2.5% |
2.1% |
3.3% |
2.6% |
|
|
|
|
|
|
|
|
|
Historically, the Company has disaggregated comparable
net bakery-cafe sales growth into change in transactions and change
in average check, with change in average check further
disaggregated into change in price and change in mix. We refer to
this disaggregation method as the “Historical View.” However, the
Company does not believe this view serves investors well as its
business is undergoing structural change in channel mix. Digitally
enabled, larger-party sized channels, such as delivery, catering,
and Rapid Pick-Up have larger checks and more entrées per
transaction and are growing disproportionately quicker. |
|
|
|
|
|
|
|
|
|
To ease the confusion, and to reflect the growth of
digitally-enabled, larger party-size channels, the Company also
disaggregates comparable net bakery-cafe sales growth into change
in price, change in entrées sold (a measure of customers served),
and change in mix. We refer to this disaggregation method as the
“Omni-Channel View.” |
|
Set forth below is quarterly Company-owned comparable
net bakery-cafe sales disaggregated using the Historical View and
the Omni-Channel View for fiscal Q1 2017 and fiscal Q1 2016: |
|
|
|
For the 13 Weeks Ended |
|
|
March 28,
2017 |
|
March 29,
2016 |
Comparable
Net-Bakery-Cafe Sales |
|
5.3% |
|
6.2% |
|
|
|
|
|
Historical View |
|
|
|
|
Transactions |
|
1.7% |
|
2.4% |
Price |
|
2.0% |
|
2.9% |
Mix |
|
1.6% |
|
0.9% |
|
|
|
|
|
Omni-Channel View |
|
|
|
|
Entree
Growth |
|
3.5% |
|
4.0% |
Price |
|
2.0% |
|
2.9% |
Mix |
|
-0.2% |
|
-0.7% |
|
|
|
|
|
Schedule IV
PANERA BREAD COMPANY |
Reconciliation of GAAP and Non-GAAP
Information |
(in thousands, except per share
information) |
|
The Company uses non-GAAP diluted earnings per share
and non-GAAP operating margin as key performance measures of
results of operations for purposes of evaluating performance
internally. These non-GAAP financial measures are not
intended to replace the presentation of its financial results in
accordance with GAAP and should not be considered superior to, as a
substitute for or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented in this
press release. Rather, the Company believes that the
presentation of non-GAAP financial measures, which excludes certain
unusual or infrequent items that the Company does not believe were
indicative of its ongoing operations, provides additional
information to investors to facilitate the comparison of past and
present operations. The table set forth below outlines a
reconciliation of non-GAAP financial measures to the most directly
comparable GAAP financial measures for the 13 weeks ended
March 28, 2017 and March 29, 2016, respectively. |
|
|
|
For the 13 Weeks Ended |
|
March 28, 2017 |
|
March 29, 2016 |
Operating profit, as
reported (GAAP) |
$ |
71,506 |
|
|
$ |
56,631 |
|
Operating
margin, as reported (GAAP) |
9.8 |
% |
|
8.3 |
% |
|
|
|
|
Field manager bonus
program adjustment (1) |
(4,825 |
) |
|
— |
|
Refranchising loss |
— |
|
|
1,071 |
|
Amount reserved for a
legal matter |
— |
|
|
3,248 |
|
Operating profit,
excluding certain items (Non-GAAP) |
$ |
66,681 |
|
|
$ |
60,950 |
|
Operating
margin, excluding certain items (Non-GAAP) |
9.2 |
% |
|
8.9 |
% |
|
|
|
|
Net income, as reported
(GAAP) |
$ |
42,494 |
|
|
$ |
35,088 |
|
Intangible asset
impairment charge (2) |
3,021 |
|
|
— |
|
Field manager bonus
program adjustment (1) |
(4,825 |
) |
|
— |
|
Refranchising loss |
— |
|
|
1,071 |
|
Amount reserved for a
legal matter |
— |
|
|
3,248 |
|
Tax impact of
adjustments (3) |
641 |
|
|
(1,576 |
) |
Net income, excluding
certain items (Non-GAAP) |
$ |
41,331 |
|
|
$ |
37,831 |
|
|
|
|
|
Diluted earnings per
share, as reported (GAAP) |
$ |
1.88 |
|
|
$ |
1.45 |
|
Impact of intangible
asset impairment charge on diluted earnings per share (2) |
0.13 |
|
|
— |
|
Impact of field manager
bonus program adjustment on diluted earnings per share (1) |
(0.21 |
) |
|
— |
|
Impact of refranchising
loss on diluted earnings per share |
— |
|
|
0.04 |
|
Impact of amount
reserved for a legal matter on diluted earnings per share |
— |
|
|
0.13 |
|
Tax impact of
adjustments (3) |
0.03 |
|
|
(0.06 |
) |
Diluted earnings per
share, excluding certain items (Non-GAAP) |
$ |
1.83 |
|
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
(1) Benefit
related to the redesign of the field manager bonus program. |
(2)
Intangible asset impairment charge of the Paradise trademark. |
(3)
Represents the adjustment to the GAAP basis tax provision
commensurate with the certain items excluded from net income. |
|
Contact: Steve West, Vice President of Investor Relations
(Steve.West@panerabread.com)
Panera Bread Company (NASDAQ:PNRA)
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Panera Bread Company (NASDAQ:PNRA)
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