Running Low on Yeast?

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Barrons Online:

PANERA BREAD, THE FAST-GROWING bakery-cafe chain, has seen the future and it’s called Crispani. In May, at its first-ever meeting with Wall Street analysts, the company announced the roll-out of a flatbread pizza that it plans to sell only after 4 p.m., in a bid to draw dinnertime diners. If all goes appetizingly, expect Crispani to be on the menu in 75% of the company’s 900-plus cafes by yearend.

Panera says the pizzas, which will cost around $8 or $9 apiece, depending on toppings, could give a 3%-to-5% lift to the annual sales of each of its outlets, which typically gross near $40,000 a week and last year generated $1.5 billion systemwide.

“It is a very upscale product, and the first salvo in our effort to boost unit sales during the evening,” says Ron Shaich, Panera Bread’s co-founder and chief executive. “It’s a natural extension of our bread business.”

Dough, in all its guises, seems to be a Panera specialty. Systemwide sales, encompassing those at 319 company-owned and 578 franchised cafes, have more than tripled in the past five years, and are expected to approach $2 billion by the end of 2006. Profits have more than quadrupled in the same span, to $52.2 million, or $1.52 a share, in 2005 (including stock-option expensing), and the company believes they could jump by 30% to 32%, to $1.97 to $2 a share, this year. Analysts are looking for profits of $2.46 a share in 2007.


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