Los Angeles, Oct. 23 - Panera Bread Co reported a 9 percent rise in quarterly earnings on Tuesday, helped by a tax benefit, and the sandwich shop chain forecast fourth-quarter earnings below Wall Street estimates.
The company's shares fell 8 percent in extended trade following the announcement.
Panera said third-quarter profit was hampered by higher labor and ingredient costs and a shift in demand toward products that cost more to make, such as salads. Those factors have weighed on the chain for much of this year.
Third-quarter net income was $11.9 million, or 37 cents per share, compared with $10.9 million, or 34 cents per share, a year ago. The company said the results included a tax benefit of 5 cents per share.
Earlier this month, Panera forecast earnings of 35 cents to 37 cents a share.
Total revenue for the quarter rose 33 percent to $273.2 million. Same-store sales, which tracks sales at bakery-cafes open at least 18 months, rose 2.6 percent during the period.
This year, Panera has grappled with rising food and labor costs and weak customer traffic due to higher gasoline prices and increased competition from grocery stores and others. The company in June withdrew its 2007 profit forecast and in July warned that earnings for the rest of the year would be below Wall Street expectations.
Chairman and Chief Executive Ron Shaich said in a statement the company was making "some encouraging progress" with a plan to stem pressure on its profit margins.
For the fourth quarter, Panera forecast earnings of 53 cents to 59 cents per share, below Wall Street analysts' average estimate of 60 cents a share, according to Reuters Estimates.
The company said same-store sales are expected to rise between 1 percent and 3.5 percent in the fourth quarter. The forecast includes the impact of a 2.5 percent price increase that will go into effect Nov. 14.
For October, same-store sales are expected to rise by 0.3 percent to 0.6 percent, Panera said.
For fiscal 2008, earnings per share are expected to rise between 10 percent and 20 percent, Panera said. It expects to open 160 to 175 stores, about the same as in fiscal 2007.
Same-store sales next year are expected to rise between 1 percent and 4 percent, the company said.
Panera shares fell 8 percent to $44.90 in extended trade after closing up $1.61 at $48.81 on Nasdaq.