Panera shares fall on gloomy forecast

by Eric Schroeder
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ST. LOUIS — Panera Bread Co. announced it has adjusted its second-quarter 2007 system-wide comparable bakery-cafe sales growth target to 1.5% to 2.5% from 3.5% to 4.5%.

The company said it is experiencing margin pressures "based on a mix shift away from products self-manufactured in its fresh dough facilities and gasoline and other input costs." As a result, the company revised its second-quarter 2007 earnings per share target to a range of 38c to 40c per share.

Shares of Panera dropped $7.64, or more than 13%, to $50.62 in early morning trading today. It was the sharpest decline since January 2001.

The news came even as Panera said system-wide comparable bakery-cafe sales increased 1.2% for the five weeks ended May 29. For the year to date, system-wide sales are now up 0.8% compared with the same period a year ago.

Comparable bakery-cafe sales percentages exclude closed locations and are based on sales for bakery-cafes that have been in operation for at least 18 months, the company said.

Company-owned bakery-cafe sales increased 1.1% in the five-week period, and franchised bakery-cafe sales rose 1.3%.

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