Panera shrugs off industry slump, topping estimates and raising forecast

Panera Bread (PNRA) Tuesday topped Wall Street's expectations for the third quarter and raised its forecast for the year, sending shares 6 percent higher after the closing bell.

Panera reported its earnings excluding items rose to $1.37 a share on revenue of $684.2 million, compared with earnings of $1.32 a share, excluding items, on revenue of $664.7 million in the year-ago period.

The results easily outpaced analysts' estimates, which called for the company to report earnings of $1.34 a share on $680 million in revenue, according to Thomson Reuters.

Panera cited strategic changes it has made to its business for its strong performance, including the implementation of its Panera 2.0 digital ordering platform.

"The power of our multi-year strategic plan and the impact of our initiatives to transform Panera into a better competitive alternative with expanded runways for growth becomes clearer each quarter," said Chairman and CEO Ron Shaich in a press release.

Other steps Panera has taken to boost its business include focusing its menu on healthier foods, its loyalty program, and adding catering and delivery. The company said delivery was now available in 13 percent of its restaurants system-wide.

Indeed, many competitors have been hurt by a slowdown in restaurant traffic, but Panera said same-store sales rose 3.4 percent in the last period at its company-owned stores. Franchise-operated stores saw comps edge up 0.2 percent. System-wide comparable net bakery-cafe sales rose 1.7 percent from a year ago.

Panera was expected to post same-store sales growth of 2.8 percent, with company stores rising 3.7 percent and franchised stores up 1.2 percent, according to StreetAccount.

Panera said it is still targeting fiscal 2016 same-store sales growth between 4 percent and 5 percent for its company-owned bakery-cafes.

"With peak investments and significant scale behind us, our pace is quickening as we focus on completing the rollout of these initiatives and reaping the benefits," Shaich said in the release. "That's why we are confident our efforts will translate into industry-leading comps and sustainable double-digit earnings growth in 2017."

The company raised its fourth-quarter earnings forecast and now expects, excluding items, profits will be in the range of $1.96 to $2.01 a share.

For the fiscal year, Panera forecasts earnings of $6.67 to $6.72 a share, on a non-GAAP basis. That would equal growth of 7 percent to 8 percent year-over-year.

Panera recently changed hands at $206.47, up $11., or 6.1 percent.