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The biggest driver of this inflation was statutory minimum wage increases. We experienced about a 3% wage inflation in the quarter, which accounted for about 60 basis points of deleverage. There are three factors contributing to the labor deleverage first, structurally, our wage rates are higher across the board.

#Panera timing full

We continue to expect food and paper cost inflation to be approximately 1% to 1.5% for the full year.Ĭontinuing down the P&L, labor cost was again the most significant driver of operating margin decline, delevering by 140 basis points in the quarter. For the quarter, food inflation was about 1%. Although these salads have a higher penny profit than flat breads, which we were celebrating in Q3 2014, they also have a higher percentage food cost. In addition, net income Q3, we were celebrating our new salads.

Specifically, breakfast, which has a higher percentage food than the rest of the day, continues to grow faster than lunch and dinner. This deleverage was primarily the result of mix shifts in our business. Food and paper costs delevered by 30 basis points versus prior year.

Now, let me walk you through our margins our third quarter operating margin, excluding the one time re-franchising charge declined by 120 basis points versus last year, due primarily to pressure on labor.ĭigging into the details let's start by discussing food and paper. This was primarily the result of opening new company-owned bakery cafes, with a 3.8% comp store sales growth at company-owned cafes. In Q3, our revenues increased 7% to $665 million. Let me remind you, that our reported third quarter 2014 earnings per share of $1.46, include an $0.08 benefit from a favorable one time tax adjustment. Our adjusted Q3 2015 EPS, excludes a $1.4 million after-tax one time charge related to our re-franchising initiative. Yesterday, after the market closed, we reported adjusted third quarter earnings per share of $1.32, down 4% year-over-year on an adjusted basis and ahead of our guidance. Thank you, Steve, and good morning everyone.

#Panera timing update

Drew will then discuss our progress on innovation and food, marketing and operations and finally Mike will wrap up with an update on our value enhancing initiatives and guidance, before we open it up for Q&A. On the agenda this morning, Mike will lead off a discussion on third quarter financial results, followed by Ron who will provide an update on our strategy to become a better competitive alternative, color commentary on our comps and a brief update on some key initiatives. These forward-looking statements should not be relied upon as representing our views as of a date subsequent to today.Īs an administrative note, for your future scheduling purposes, we are tentatively scheduling to publish our fourth quarter 2015 earnings release after the market close on Februwith our subsequent earnings call on February 10 at 8:30 AM Eastern Standard Time. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our view as of any subsequent date. Actual events or results may differ materially from those indicated by these forward-looking statements due to a number of risks and uncertainties, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which was filed on February 20, 2015. Any such items or remarks constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. With me this morning are Ron Shaich, our Founder, Chairman and CEO Drew Madsen, President and Mike Bufano, our Senior Vice President and Chief Financial Officer.Īs a reminder, we may make forward-looking statements regarding future events, expectations, plans or prospects for the future financial performance of the company. Good morning everyone and welcome to Panera Bread's third quarter earnings call. Steve West, Vice President of Investor Relations. Welcome to the Panera Bread Third Quarter 2015 Earnings Call.Īt this time, I would like to hand things over to Mr. ( NASDAQ: PNRA) Q3 2015 Earnings Call Octo8:30 AM ET