Is it Too Late, or Can Panera Bread Co (PNRA) Still Make You Some Dough?

Back in September, I suggested that Panera Bread Co (NASDAQ:PNRA) was a great long-term investment, and how my wife helped open my eyes to the potential of its particular brand of “fast casual” dining.  While I’ve always liked Panera Bread Co (NASDAQ:PNRA), I just didn’t really see the upside potential as an investor. Since the market has been on a pretty strong run in the nearly nine months that have passed, I figured it was time to take a look and see how things have played out.

The bulls are running. Can Panera keep up?

PNRA data by YCharts

The market has been on quite a run, and despite a strong 12% increase since early September, the S&P 500 has outperformed all of the restauranteurs we talked about back then. While by a slim margin for the fast growers like Panera Bread Co (NASDAQ:PNRA), Buffalo Wild Wings (NASDAQ:BWLD), and Chipotle Mexican Grill, Inc. (NYSE:CMG), and by a significant margin to overall loser Darden Restaurants, Inc. (NYSE:DRI), it’s important to remember that we are still years away from Panera Bread Co (NASDAQ:PNRA)’s growth plans coming to completion.

Best operator in its industry

From the FY12 annual report (edited for length, and bolds mine for emphasis):

We’re proud to have exceeded our earnings targets in each quarter of 2012. In 2012, our earnings per share (EPS), excluding a one-time legal charge in 2011, grew 27%. These results were driven by company comparable bakery-cafe sales growth of 6.5%, the opening of 123 new bakery-cafes system-wide at record opening volumes and our strong operating disciplines. …this was the fifth consecutive year that our EPS has grown 24% or greater and the fifth consecutive year in which we exceeded the upper end of our long-term EPS growth target of 15%-20%. … It thus seems fitting to us that this year, for the first time in our history, Panera Bread made it onto the highly coveted list of FORTUNE’s “World’s Most Admired Companies”, confirming the pride we all feel in Panera.

Panera Bread Co (NASDAQ:PNRA) has shown repeatedly that it can execute as well as any of its peers, and far better than most.  Management consistently delivers the results promised, and as the domestic economy continues to improve, there’s little reason to doubt this company will continue to deliver on its commitments to investors.

Best of the rest

Buffalo Wild Wings (NASDAQ:BWLD) continues to grow its business, increasing revenues YoY by over 30% in the quarter ended January 1, and by more than 21% in Q1 of the current FY. And while revenue growth is important, earnings were down by over 10% in the latest quarter, due to a number of factors including increased food costs. This is certainly something to keep an eye on, but as the company continues to grow (opening its 900th location in North America recently) both its footprint, and with comparable sales up more than 5% this quarter, these lumpy results will smooth out over time.

Chipotle Mexican Grill, Inc. (NYSE:CMG), on the other hand, is seeing its revenue growth slow, reporting growth numbers in the mid-teens in recent quarters.  But with TTM revenues of $2.8 billion, it’s nearly three times larger than Buffalo Wild Wings, $1.1 billion over the past 4 quarters.  And with the exception of the critical football season witch is central to Buffalo Wild Wings (NASDAQ:BWLD)’ success, Chipotle is growing earnings at a much faster clip between the two.  And lastly, with its new ShopHouse southeast Asian concept in its beginning stages, Chipotle Mexican Grill, Inc. (NYSE:CMG) looks to have a lot of growth left.