Quick read: Keep an eye on Panera stock
You usually expect bread to rise, but for the last three months, Panera Bread Co.'s stock price has dropped by 22 percent.
Last week it hit a low for the year — the lowest it's been since mid-2012 — at a time when the stock market is generally up.
Much of the drop stems from Panera's lackluster first-quarter earnings — $1.55 a share, down from $1.64 a share a year earlier — and the company's forecast of a decrease in second-quarter earnings, due to be reported in mid-July.
Panera blamed the first-quarter results largely on "severe weather" and on investments designed to improve the company's operational capabilities.
But there are also concerns about Panera's shift in direction. The company has committed to serving sustainable, healthy food and eliminating artificial ingredients. It's also trying to implement Panera 2.0 — a strategy geared to reducing wait times, improving order accuracy and eliminating crowding. Elements of the strategy include digital ordering, iPad kiosks and ways to order from the table, rather than counter.
According to The Motley Fool website, some investors also are disturbed by the Cramer-Krasselt advertising agency's decision to drop Panera as a client.
St. Louis-based Panera has about 1,800 bakery-cafes operating under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Cafe names. Roughly half of those are company-owned, and the other half are franchise-operated. Panera still expects to open 115 to 125 new bakery-cafes this fiscal year.
Panera's stock price last week was about 22 times annual earnings. The stock trades on the Nasdaq exchange under the PNRA symbol. Panera has three stores in Champaign — at 1765 W. Kirby Ave., 616 E. Green St., and 1903 Convenience Place.