ST. LOUIS — Saying the “power of our plan is evident in our business results,” Ron Shaich, chairman and chief executive officer of Panera Bread Co., spoke positively of the progress being made at the St. Louis-based bakery cafe chain ahead of its pending acquisition by JAB BV.
Net income at Panera in the first quarter ended March 28 was $42,494,000, equal to $1.89 per share on the common stock, up 21% from $35,088,000, or $1.46 per share, in the same period a year ago. Revenues also improved, increasing 6% to $727,633,000 from $685,153,000.
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| Ron Shaich, chairman and c.e.o. of Panera Bread |
“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,” Mr. Shaich said. “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%.”
A day before its earnings release, Panera announced it expects to add more than 10,000 in-cafe and delivery driver jobs system-wide as it expands delivery service to 35% to 40% of its bakery cafes by the end of 2017. At the beginning of the year, delivery service was available in about 15% of the company’s more than 2,000 locations.
During the first quarter, company-owned comparable bakery cafe sales increased 5.3%, franchise-operated comparable bakery cafe sales increased 0.3% and system-wide comparable bakery cafe sales increased 2.6%, and Mr. Shaich said Panera’s 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 e.p.s. was up 30%, and non-GAAP e.p.s. 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,” he said.
On April 4, JAB BV, an investment arm of the JAB Holding Co., entered into an agreement to acquire Panera for approximately $7.5 billion. Upon completion, the acquisition will add to JAB’s growing global roster of bakery cafe chains that also include Caribou Coffee, Einstein Noah, Espresso House, Krispy Kreme Doughnuts, and Peet’s Coffee and Tea.
Under the agreement, JAB will acquire Panera for $315 per share in cash and the assumption of $340 million in debt. The transaction has been approved by Panera’s board of directors and is expected to close in the third quarter of 2017, at which point Panera would become a private company.
“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,” Mr. Shaich said. “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.”
