Milling & Baking News - August 9, 2011 - 20

Financial Results 

New products fuel 34% earnings surge at Panera Bread
ST. LOUIS — New breakfast sandwiches, paninis and salads helped drive a 34% gain in earnings at Panera Bread Co. in the second quarter. Net income in the quarter ended June 28 was $35,710,000, equal to $1.20 per share on the common stock, up from $26,704,000, or 86c per share, in the same period a year ago. Total revenue during the second quarter totaled $451,080,000, up 19% from $378,124,000. But sales from companyowned stores open at least a year rose only 4.4% during the second quarter, less than Panera’s own target of a 5% to 6% increase. This comparison is a key measure of a company’s financial health because it excludes stores that recently opened or closed. For franchiseoperated bakery-cafes, the figure rose 3.6%. For the first half of fiscal 2011, net income rose 30% to $68,484,000, or $2.29 per share, up from $52,549,000, or $1.69 per share, in the first half of fiscal 2010. Total revenues increased 18% to $873,180,000. In a July 27 conference call with analysts, Bill Moreton, president and chief executive officer, said new products helped fuel earnings growth during the quarter, particularly the company’s hot sandwiches platform. “We rolled out our second generation Panini Grills beginning late last year and finishing up early this year,” Mr. Moreton said. “The grill allows us to make each panini to order instead of having to pre-make them and hold them in a heating cabinet as we had to do before. We rolled out steak as new protein for Panera in the second quarter and highlighted the Steak Panini and the Steak Breakfast Sandwich. Both products performed very well and

helped grow our breakfast, lunch and dinner day parts. Sales of our signature paninis were up 10.2% in the second quarter and our breakfast sandwiches were up 18% in the second quarter. In fact, this marks

the tenth consecutive quarter that our breakfast sandwich sales have grown 10% or more.” Mr. Moreton said Panera will continue to expand the hot sandwich platform with the launch of a new roasted turkey and artichoke panini in the third quarter and a new steak balsamico panini in the fourth quarter. Panera said it expects to earn 92c to 94c per share in the third quarter, versus 75c in the third quarter of fiscal 2010. For the full year, Panera raised its 2011 full-year earningsper-share guidance to $4.54 to $4.58, up from earlier guidance of $4.47 to $4.51. During the second quarter, Panera and its franchisees opened 28 new bakery cafes, and acquired substantially all the assets and certain liabilities of 25 bakery cafes from its Milwaukee franchisee. “We are pleased to deliver 39% earnings growth in the second quarter, marking the twelfth out of the last 13 quarters of 20% plus growth, a record we feel very proud of,” Mr. Moreton said. “We are also raising our full-year 2011 e.p.s. growth target to 25% to 26%, based on strong operating trends. Our sales in the second quarter were driven by strong transaction growth, fueled by our past and current investments in the quality of our food, operations and customer experience. Looking forward into 2012, we believe that these investments have set us up for another strong year.” MBN 33% from NP660 million. Sales were NP716 million ($61.3 million), up 4%. Overall net income of Gruma S.A.B. de C.V. was NP106 million ($9.1 million), compared with a loss of NP172 million in the second quarter last year. Net sales were NP13,104 million ($1,122 million), up 13% from NP11,545 million in the same period a year earlier. Gruma has made great progress in shoring up the company’s balance sheet. Stockholders’ equity at the end of June was NP15,207 million, up 45% from NP10,467 million at the end of June 2010. Long-term debt at the end of the quarter was NP8,736 million, down 52%. MBN
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Gruma Corp. operating income down 51% in second quarter; costs up
MEXICO CITY — Operating income of Gruma Corp. in the second quarter ended June 30 was NP161 million ($13.8 million), down 51% from NP332 million in the second quarter of 2010. Net sales were NP5,544 million ($474.8 million), up 10%. With volumes flat, Gruma attributed the sales gains to price increases implemented in February and March in the United States and Europe in reaction to higher raw material costs. The price increases, though, were not sufficient to protect the company’s profit margins. Operating income as a
20 / August 9, 2011 Milling & Baking News

percentage of sales tumbled to 2.9% from 6.6% in the second quarter last year. Elaborating on sales volume trends, Gruma said U.S. tortilla shipments were down 2% from a year ago because of weakness in the food service segment. By contrast, the company saw a 3% gain in U.S. corn flour operations, reflecting good demand from snack manufacturers. Also strong in the quarter were shipments in Europe. In the six months ended June 30, Gruma Corp. operating income was NP444 million ($38 million), down

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Milling & Baking News - August 9, 2011

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