Panera announced a 15% increase in third quarter profit has it too took pre-emptive measures to preserve margins in the face of declining traffic, including purchasing its wheat contracts six months out, changing menus to focus more on higher-margin offerings and raising prices 6.5%.
Rising gasoline and food costs have decreased Panera Bread's earnings, prompting a negative investor outlook. Furthermore, the company has shifted away from self-manufactured products made in its fresh dough facilities to outsourced scones and muffins, which have resulted in a decrease in sales.
Panera Bread announced an increase in the same-store sales by 1.5 percent at its company owned cafes, while the franchised locations’ sales increased by 0.3 percent for the four week period that ended on September 25. Further, the revenue for Q3 was $276 million, an increase of 35 percent as compared to the last year. The company is expecting an EPS of 35-37 cents, as compared to the previously announced 32-38 cents.
Citing margin pressures from input prices and rising gas prices, Panera cut 2Q earnings guidance. PNRA shares dropped nearly 15% on the news .