Growth in the fast-casual sector is having a deep impact on the restaurant industry as operators in other segments try to imitate its successful strategies, the NPD Group said Wednesday.

Fast-casual restaurant chains grew their unit counts by double digits over the last three years, according to NPD’s Recount, a biannual census of restaurant unit counts.

Still, the fast-casual segment remains relatively undeveloped, accounting for only about 4 percent of the more than 60 billion visits to all restaurants in the year ending in June 2011, NPD said. By comparison, about 61 percent of those visits were to quick-service restaurants.

Since 2007, however, fast-casual chains also have seen dramatic increases in traffic, while quick-service and casual-dining restaurants have seen minimal increases or declines.

NPD’s “Fast Casual: A Growing Market” report also found that consumer demand for fast-casual dining outpaced the industry’s rate of expansion, and several chains in the segment have built strong customer loyalty.

“Many fast-casual concepts were positioned as a fresh, made-to-order alternative to traditional fast food options, and consumers responded positively,” said Bonnie Riggs, NPD restaurant industry analyst. “The segment benefited from fast-food consumers trading up and full-service consumers trading down.”

As a result, several quick-service chains have begun offering more premium products and healthful options, and upgrading interiors with upscale and modern looks that can compete on a fast-casual level, the NPD report said.

For example, Wendy’s, McDonald’s, Jack in the Box and Burger King have introduced more premium burgers and upgraded menu items in recent years.

Taco Bell is testing a new fast-casual-like chef-inspired menu, and McDonald’s has been re-imaging its units, with 800 scheduled to be remodeled this year.

Riggs said traditional quick-service operators can compete with fast-casual restaurants if they pay attention to consumers’ wants and needs, especially in terms of the freshness and quality of food.

“Fast-casual concepts are in an excellent position for growth, relative to the overall industry,” she said. “However, the same growth opportunities are available to any restaurant operator able to innovate, provide value for money and not just keep up, but surpass competitors.”

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout

2/8/2012 6:10:45 PM

Red, chocolate and heart shapes are the unsurprising themes for chains as they gear up for Valentine’s Day.

Baskin-Robbins is taking the opportunity to add two flavors to its line of ice cream cake bites, introduced last October.

Love Potion #31 is white chocolate and raspberry ice cream with a raspberry ribbon, raspberry-filled chocolate hearts and chocolate chips, served on chocolate cake, covered in chocolate-flavored coating and finished with a raspberry-flavored chocolate drizzle.

The Chocolate Dipped Strawberry cake bite is Very Berry Strawberry ice cream served over chocolate cake, covered in chocolate-flavored coating, drizzled with strawberry glaze and topped with miniature chocolate hearts.

The 6,600-unit Dunkin’ Brands subsidiary also is offering a Valentine’s Day “Box of Chocolates” four pack of ice cream cake bites for a suggested retail price of $9.99. The cakes are available individually at a suggested retail price of $2.99.

In addition, Baskin-Robbins’ February flavor of the month is Superfudge Truffle — chocolate fudge ice cream with chunks of chocolate ganache and toffee truffle pieces.

Sister brand Dunkin’ Donuts is introducing a new heart-shaped dessert for the holiday. The Chocolate Heart Donut is frosted with chocolate, filled with the chain’s vanilla Bavarian Kreme and sprinkled with chocolate chips.

The 10,000-unit chain also is reprising its Cupid’s Choice Donut, filled with Bavarian Kreme and topped with strawberry icing and pink, white and red heart-shaped sprinkles.

The donuts are available for a suggested retail price of 89 cents each.

Krispy Kreme also is selling heart-shaped doughnuts in February. The Drizzled Heart is a chocolate iced doughnut with a red-icing drizzle, while the Heart with Sprinkles has white icing, and red and white sprinkles.

In addition, the 660-unit chain based in Winston-Salem, N.C., is offering its regular-shaped chocolate iced doughnut with red and white sprinkles.

Krispy Kreme is promoting the holiday with a set of 12 Valentine cards, which it is giving away with the purchase of a dozen doughnuts while supplies last.

Dairy Queen’s heart-shaped offering is a cake made with a layer of chocolate soft serve topped with fudge and crunch, and then a layer of vanilla soft serve decorated with icing.

The 5,900-unit chain based in Minneapolis also has named the Choco Cherry Love Blizzard its flavor of the month for its signature blended milk shake treat. It is a blend of chocolate flavored chunks with cherries and vanilla soft serve.

Darden Restaurants' 21-unit subsidiary Seasons 52 has added a holiday themed item to its line of Mini Indulgence desserts through February 15. The Chocolate Raspberry Valentine is chocolate cake layered with chocolate syrup, raspberry purée and raspberry mousse. It’s garnished with whipped cream and a chocolate kiss.

All Seasons 52 mini indulgences are priced at $2.50 each.

Although desserts dominate when it comes to specials for this holiday, take-and-bake pizza chain Papa Murphy’s is offering a HeartBaker — a heart-shaped pizza topped with grated cheese, and pepperoni for the red color, to be taken home and baked by its customers. Prices for the pie vary by location for the 1,300-unit chain, but will average about $7 each.

Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary
 

2/8/2012 5:40:56 PM

Marco’s Pizza, the franchisor of more than 280 restaurants in 21 states, has partnered in a $100 million deal with privately held movie rental chain Family Video to open Marco’s outlets within as many as 350 of its movie stores.

Jack Butorac, chief executive of Toledo, Ohio-based Marco’s, said the partnership was an “exciting match” of like-minded brands with systems that can help each other grow.

“When you choose whom you align with, you want to align with folks that share your culture and goals,” Butorac said. “Even though Family Video is the largest privately owned video chain in the country, they’re completely down to earth and value partnerships.”

In this arrangement, Family Video would become Marco’s largest franchisee. Because Glenview, Ill.-based Family Video owns all of the real estate for its more than 735 movie rental stores in 19 states, the company had the flexibility to fill available space in its buildings with new revenue streams, Butorac said.

Plans for the franchised Marco’s units call for about 1,500 square feet of space, and most Family Video stores have that capacity available in their buildings, which typically encompass about 7,000 square feet.

Marco’s first entered Family Video when a franchisee leased parts of four Family Video stores about three years ago. The movie rental company became familiar with Marco’s and approached executives at its franchise convention last March to pitch this deal.

Despite the fact that the retail video rental business is declining — particularly given the intense competition from companies like Netflix — Marco’s is confident that this line of franchising is sustainable.

“They said they wanted to be our franchisee, and they wanted to be treated special,” Butorac said. “At first it didn’t make sense to me, because I thought if they were looking for a replacement concept [for an empty video store], the answer is ‘no’. But their same-store sales were up 4 percent last year, and they had record profits. They’re planning ahead for what consumers are saying they want.

“When you have very little debt and lots of cash, you don’t need a lot of money to make money.”

The first co-located Marco’s restaurant is scheduled to open within a Family Video store in Wheeling, Ill., in the first quarter of 2012. Officials from both companies said the majority of the 350 conversions to follow would be in the Midwest, beginning with Illinois and Indiana.

Butorac said Marco’s and Family Video share not only demographics for core customers but also similar criteria for selecting sites for new stores.

“If we know who our current customers are, we can forecast potential customers at future sites,” he said, “and when we looked at Family Video’s 735 stores, we were shocked that so many of their stores were located exactly where we’d want to be. We look for what we call ‘rooftops’ in an area we’re scouting, and they look for ‘rooftops.’”

Marco’s and Family Video are working on a joint online-ordering system for cobranded locations that would allow customers to order their pizza, select a DVD from Family Video’s library, and have both delivered by the same driver.

For now, Family Video will have the same contribution requirements as any franchisee in terms of sales royalties, national marketing fund dollars and investment toward the Marco’s University online-training platform, Butorac said.

“But as they grow, I’ll give them some economic advantages,” he said. “They would like to build as many as 500 stores, so if they make it past 350, I’ll give them some incentives. It’s good for them and good for me.”

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN
 

2/8/2012 4:29:46 PM

Panera will expand a test of table service and drive-thrus this year, Panera Bread Co. executives said Wednesday.

Company executives spoke with analysts after reporting Tuesday that profit increased 5.8 percent in the fourth quarter after special charges.

The St. Louis, Mo.-based bakery-café chain said earnings for the quarter ended Dec. 27, 2011, rose to $38.6 million, or $1.31 per share, up from $36.5 million, or $1.21 per share, in the year-ago period.

Revenue rose 15.8 percent, to $495.8 million, from $428.2 million in the previous year.

In the coming months, Panera plans to offer more table-delivery units in what has been a predominantly fast-casual service model.

“We now have table delivery in 132 company bakery-cafés and 214 across our system,” said William W. Moreton, Panera’s chief executive and president. “We continue to believe this is the right way to position our concept to deliver the type of customer experience we are striving for.”

Moreton emphasized that table service is designed to position Panera competitively. “We think it’s very consistent with the rest of the Panera experience we’re trying to provide,” he said, adding that it increases consumer scores in friendliness. “You’ll see this evolve and unfold.”

In addition, Moreton said about 50 of the 115 to 120 new Panera units in 2012 will feature drive-thrus. “In 2011, 30 of our new bakery-cafés were drive-thru units, bringing our total at the end of 2011 to 119 drive-thrus.” An additional 25 will be converted to drive-thrus in retrofit remodels, he said.

During the company’s earnings call with investors, executives also discussed:

Same-store sales: The company expects a 7-percent to 7.5-percent increase in same-store sales for the year. In the fourth quarter, Panera reported that same-store sales had increased 5.9 percent in the quarter at company-owned restaurants and 3.2 percent at franchised units. “So far in 2012, our first-quarter to-date company comparable-store sales are up 8.9 percent,” Moreton said.

Continued from page 1

New products: A Mediterranean egg white breakfast sandwich rolled out this year, and Moreton said it has “been performing very well.” A new roasted turkey-cranberry panini, which was tested in the Chicago market in the fourth quarter, will be introduced later this year. Panera debuted sandwich grills in the second quarter of 2011, he said, and panini sales have increased 16 percent since then. Hot breakfast-sandwich sales increased 15 percent in 2011.

Marketing: Panera plans to increase advertising spending again this year. “We continue to be early-on in our advertising journey and spend relatively less money on advertising than most of our national competitors,” Moreton said.

Panera increased its advertising spending 32 percent in 2011 over 2010 levels, reflecting an increase to 1.3 percent of systemwide sales from 1.1 percent. “In 2012, we intend to increase our advertising spending by 26 percent over 2011 levels and go from 1.3 percent to 1.5 percent of sales,” Moreton said. Panera gets more than $1 of profit from each $1 of spending, he added. The brand plans to run its first national cable television ad at the end of the first quarter.

Loyalty program: The “My Panera” loyalty program, introduced in 2010, has grown to 9.5 million members. “Now we truly are moving to one-to-one marketing,” Moreton said. Each member will have an individual program based on buying patterns, Moreton said, with tailored rewards.

Catering: The Panera catering program’s sales grew 29 percent in 2011 and contributed more than 1 percentage point to same-store sales growth.

Urban units: The company plans to take advantage of urban real estate as reasonable opportunities arise, executives said. Panera opened its 1,500th restaurant in New York this month. “Our entry into Manhattan is building upon the success that we’ve had with our urban openings in Washington, D.C., Boston and Chicago,” Moreton said. Two more Panera units will be opening in Manhattan this spring.

Commodity inflation: The fourth quarter saw the highest inflation point of the year, at about 4.7 percent, said Jeffrey Kip, who will depart as Panera’s chief financial officer on March 15. In the first quarter of this year, he added, “We expect a little more modest unfavorability as we continue to roll through some of the higher-inflation items.” For the year, he said, the inflation should be “modestly favorable,” with a total inflation expectations of 2.75 percent in 2012.

Panera operates 1,541 restaurants under the Panera Bread, St. Louis Bread Co. and Paradise Bakery & Café brands.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless
 

2/8/2012 3:46:23 PM

McDonald’s Corp. reported a 6.7-percent increase in global same-store sales for January, with each of its three operating regions across the world beating previous estimates.

The Oak Brook, Ill.-based company said a calendar shift for January, resulting in one fewer Saturday and one additional Tuesday than a year earlier, negatively affected same-store sales around the world between 0.5 percent and 1.9 percent.

However, for the more than 14,000 McDonald’s restaurants in the United States, January same-store sales rose 7.8-percent, compared with a 6.9-percent consensus estimate on Wall Street and lapping a year-earlier gain of 3.1 percent.

The brand also began lapping the January 2011 launch of Fruit & Maple Oatmeal at breakfast.

McDonald’s credited sales of breakfast, beverages and core menu items for driving January’s performance in the United States. The chain also began national advertising on Jan. 23 for its Chicken McBites limited-time offer, which will be available through April.

View and ad for McDonald's McBites; story continues below

Jeffrey Bernstein, restaurant analyst for Barclays Capital, wrote in a research note that McDonald’s performance in January also benefited from slightly more than 3 percent of menu price increases gradually implemented during 2011.

As they do most months, Europe’s four big markets of the United Kingdom, France, Germany and Russia contributed heavily to the division’s same-store sales increase, which was 4 percent in January.

McDonald’s said limited-time offerings, promotions of core products and ongoing remodeling efforts in Europe led to the 4-percent increase, which beat Wall Street’s 3.4-percent consensus estimate and lapped a 7-percent increase in January 2011.

Throughout the European division but excluding Russia, McDonald’s had taken price increases of about 2 percent heading into 2012, Bernstein noted. He added that many European countries’ austerity measures enacted in 2011 have not shown a meaningful impact for the most part in the first month of 2012.

In McDonald’s Asia/Pacific, Middle East and Africa, or APMEA, division, same-store sales rose 7.3 percent in August. That result was higher than the 6.5-percent analyst consensus and the 5.2-percent increase reported in January 2011.

The brand pointed to China as a significant contributor to January same-store sales, due in large part to a favorable calendar shift this year for Chinese New Year. Bernstein noted that Japan and Australia also had positive same-store sales for the region.

McDonald’s operates or franchises more than 33,000 restaurants in 119 countries.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN
 

2/8/2012 2:14:11 PM

Chick-fil-A, Panera Bread and Chipotle topped a list of limited-service restaurant chains with “excellent” customer satisfaction ratings for 2011, according to a survey by Sandelman & Associates.

The San Clement, Calif.-based market research firm’s Quick-Track study found Chick-fil-A led the pack of limited-service chains with 500 or more U.S. units, with 63 percent of customers who had visited the brand in the past three months rating customer satisfaction as “excellent.” The Quick-Track surveyed more than 107,400 limited-service restaurant users in 87 U.S. media markets.

“These Top 10 chains offer high-quality fresh food, served in comfortable and inviting surroundings,” Bob Sandelman, founder and chief executive of Sandelman & Associates, said. “Several of the fast-food giants have responded with better food and better spaces.”

The Top 10 rankings for limited-service restaurant chains with 500 or more units and the percentage rating of “excellent” for the most recent visit:

1. Chick-fil-A, 63%
2. Panera Bread, 58%
3. Chipotle Mexican Grill, 57%
4. Jersey Mike’s Subs, 53%
4. Five Guys Burger & Fries, 53%
6. Papa Murphy’s Pizza, 52%
7. Zaxby’s, 51%
8. Starbucks, 50%
9. Jimmy John’s Gourmet Sandwiches, 48%
10. Whataburger, 45%

Sandelman also looked at smaller chains and recalculated a ranking that included chains with fewer than 500 units. Café Rio, a fast-casual Mexican chain based in Salt Lake City, Utah, led that list.

When Sandelman incorporated smaller, regional chains with fewer than 500 units into the list, the top 10 included:

1. Café Rio Mexican Grill, 65%
2. Raising Cane’s Chicken Fingers, 63%
2. Chick-fil-A, 63%
2. In-N-Out Burger, 63%
5. Capriotti’s Sandwich Shop, 61%
6. Pei Wei Asian Diner, 59%
7. Lenny’s Sub Shop, 58%
7. Panera Bread, 58%
9. Chipotle Mexican Grill, 57%
9. Firehouse Subs, 57%

Sandelman ranked on 16 attributes of the dining experience, such as “taste and flavor of the food” and “value for the money.”

Sandelman said that for the fourth consecutive year, Little Caesars held the top spot for “value for the money” and “affordability of the prices.” Subway continued to be the highest rated for healthy and nutritious food. McDonald’s was ousted as No. 1 for the first time in the kid appeal category by Chick-fil-A.

Nation’s Restaurant News, in partnership with WD Partners, also presented the top 10 rankings of consumer preferances last year in its “Consumer Picks” special report.

Contact Ron Ruggless at ronald.ruggless@penton.com
Follow him on Twitter: @RonRuggless

2/8/2012 12:35:12 PM

A group of noteholders that includes affiliates of Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management has the winning bid to acquire all assets of Real Mex Restaurants Inc. in a bankruptcy auction.

The board of directors for Real Mex, parent of the El Torito, Acapulco and Chevys Fresh Mex brands, approved the bid late Tuesday.

The sale is subject to court approval in a hearing scheduled Friday.

If approved, the noteholder group could close the deal as earlier as 30 days after the hearing, allowing the casual-dining operator to emerge from Chapter 11 bankruptcy and operate with “a substantially improved balance sheet,” Real Mex said in a statement.

“We remain confident in our turnaround plans and are looking forward to putting this challenging but necessary process behind us,” said Real Mex chairman and chief executive David Goronkin. “We are close to accomplishing our objectives in the Chapter 11 process and have the right teams in place to move our brands and company forward. A stronger financial foundation will allow us to accomplish this more quickly.”

According to court documents, RM Opco LLC, the acquiring entity established by the noteholder group, offered an $80 million credit bid for Real Mex’s second-lien notes, as well as about $49 million in cash and the assumption of certain liabilities.

The offer by Tennenbaum, Z Capital and J.P. Morgan was one of two bids for the Cypress, Calif.-based Real Mex, which filed bankruptcy in October.

The other bidder was Harshad Dharod, president and owner of Friendly Franchisees Corp., a franchisee of the Carl’s Jr., Papa John’s and Denny’s chains.

Real Mex said the restructuring was necessary because of its struggles with high debt loads, certain above-market rents and a weak economic environment, particularly in California, where most of Real Mex’s restaurants are based.

The company operates about 141 restaurants under the El Torito, Acapulco and Chevys brands, as well as single-unit Sinigual, Las Brisas and the small regional concepts Who-Song & Larry’s, Casa Gallardo and El Paso Cantina. The Chevys chain also includes 20 franchised locations.

Real Mex is owned by private-equity firm Sun Capital Partners, based in Boca Raton, Fla.

If the acquisition is approved, RM Opco will emerge holding about 85 percent of equity interests. The remaining 15 percent would be held by holders of senior secured notes due in 2013, according to court filings.

The new company would have a “more profitable store base, lower cost structure and improved cash flow that will fund future growth,” filings said.

About 40 restaurants have been closed between January 2011 and January 2012, and the company has renegotiated leases across its portfolio, according to RM Opco’s filings.

The noteholder group indicated they would continue Real Mex’s current brand re-imaging campaign, including new menus and marketing initiatives for each brand, as well as offering value-priced, quality food.

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout

2/8/2012 10:50:14 AM

Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin-Robbins, has named Giorgio Minardi president of its international division, the company said Tuesday.

Minardi replaces Neal Yanofsky, who left the company in September, four months being named to the newly created position. Dunkin’ Brands president and chief executive Nigel Travis assumed the duties in the interim.

Minardi’s duties include “strategically expanding the presence of Dunkin’ Donuts and Baskin-Robbins outside the United States and … delivering a consistent, but culturally relevant, brand experience” for its customers, the Canton, Mass.-based company said.

Minardi will report directly to Travis.

A foodservice and retail veteran who has held high-level positions at McDonald’s and Burger King, Minardi most recently was managing director for Europe and the Middle East at Autogrill, a food, beverage and retail company, where he was responsible for the company’s operations in 40 countries.

“With an impressive career as an international executive with some of the leading brands in the food-service and retail industry, Giorgio is eminently qualified to help us capitalize on the tremendous global growth opportunities available to Dunkin' Donuts and Baskin-Robbins," Travis said.

"He has a unique blend of marketing, operational, development and general management experience, as well as on-the-ground experience in Asia Pacific, Europe and the U.S.,” he said.

Minardi also served as Burger King’s division vice president of Northwest Europe, and vice president for the Asia Pacific. Prior to that he spent 16 years at McDonald’s Corp., where his last job was vice president and chief marketing officer for Greater China. He currently serves on the board of directors of Volotea Airlines in Europe.

“I am excited about being a part of the Dunkin' Brands team,” Minardi said. “The company is among the world's largest quick-service restaurant companies and includes two of the most recognized and beloved brands in the industry."

During the first nine months of 2011, Dunkin' Brands opened a net total of about 480 net new locations worldwide. In the third quarter, a net 83 Baskin-Robbins international units were opened.

Although Dunkin’ Donuts has a larger presence in the United States than its sister company, Baskin-Robbins is the larger international brand and accounts for about 15 percent of Dunkin’ Brands’ total revenue, the company said. Dunkin’ Donuts International accounts for about 3 percent of total revenue.

When announcing third-quarter earnings last November, Travis called Baskin-Robbins International “a real jewel in the crown.” He said Dunkin’ Donuts International had more work ahead of it.

Dunkin’ International closed a net 24 units in the third quarter of 2011.

Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary
 

2/7/2012 6:25:28 PM

Three groups of investors acting in concert are proposing to replace the full board of J. Alexander’s Corp., officials of the casual-dining company said Monday.

The investors said in regulatory filings that their effort to place new directors on the J. Alexander's board was motivated by a desire to “assist the company in improving its operational and financial performance.”

The three investor groups — which hold a 12.6-percent collective ownership stake in the restaurant company, which operates 33 locations — are Privet Fund Management LLC, led by Ryan Levenson; JCP Investment Management LLC, led by James Pappas; and Ben Rosenzweig, a lone investor.

In a notice to J. Alexander’s management, a representative of Atlanta-based Privet Fund LP — the investment fund overseen by Levenson and Privet Fund Management — said the restaurant company had dismissed the outside investors’ “efforts at constructive dialogue” during a Jan. 30 phone call.

As a result, the group was availing itself of its rights under the company’s bylaws to nominate directors for the upcoming annual shareholders meeting.

The group’s nominees are Levenson, Pappas, Rosenzweig and Todd Diener, a past president of the Chili’s Grill & Bar and On The Border casual-dining chains.

J. Alexander’s said it was reviewing Privet’s notice for compliance with the company’s governing documents and applicable law.

Lonnie J. Stout II, president and chief executive of J. Alexander’s, said in a statement the Nashville, Tenn.-based company is “always receptive to productive dialogue with our shareholders.” But apart from making their wishes for new board members known, he said the outside investors “failed to discuss with the company any constructive ideas or suggestions about actions the company should or should not take.”

Stout continued, “In addition, we are concerned with Privet’s attempt to take control of the company without paying a full and fair price to all of the company’s shareholders.”

The J. Alexander’s board comprises four highly-qualified and experienced directors, Stout said, three of whom are independent, whom, as a group along with their affiliates, own an aggregate of about 6.4 percent of the company’s outstanding stock.

According to filings with securities regulators, Levenson and affiliated entities beneficially own 9.1 percent of J. Alexander’s Corp.’s common shares; Pappas and affiliated entities own 3.4 percent; and Rosenzweig owns less than 1 percent.

Those filings indicated that Pappas and his affiliated entities acquired all of their shares in J. Alexander’s since Dec. 13 at share prices ranging from $5.83 to $6.65, and that Rosenzweig purchased all of his since Sept. 27 for $6 apiece. J. Alexander’s stock has traded between $5.00 and $7.30 per share over the past 52 weeks.

For the nine months ended Oct. 2, J. Alexander’s Corp. reported net income of $513,000, or 8 cents per share, compared with net income of $2.3 million, or 38 cents a share, for the same 2010 period.

It said net sales totaled $116.3 million, up 5.4 percent from a year earlier, reflecting same-store sales growth of 5.5 percent.

Contact Alan J. Liddle at alan.liddle@penton.com.
Follow him on Twitter: @AJ_NRN

2/7/2012 6:15:14 PM

Panera Bread Co. on Tuesday said profit increased 5.8 percent in the fourth quarter after special charges, and same-store sales rose at both its corporate-owned and franchised locations.

The 1,541-unit St. Louis, Mo.-based bakery-café chain said earnings for the quarter ended Dec. 27, 2011, rose to $38.6 million, or $1.31 per share, up from $36.5 million, or $1.21 per share, in the prior-year period.

Revenue was up 15.8 percent, to $495.8 million from $428.2 in the year-ago quarter.

The company said same-store sales increased 5.9 percent in the quarter at company-owned restaurants and 3.2 percent at franchised units.

For fiscal 2011, the company said it saw systemwide new-unit average weekly sales rise to a new high of $41,416, surpassing a record set in fiscal 2010.

Panera also said it was in the process of acquiring back from a franchisee the Raleigh-Durham, N.C., market for $48 million, a deal expected to close by the end of the first quarter.

Panera’s earnings for the quarter reflected a $5 million charge for the proposed settlement of an employment legal matter in California, the company said. That proposed settlement was related to breaks and meal periods for employees in the state.

During the fourth quarter, Panera said it opened 24 new bakery-cafés and its franchisees opened 16 restaurants. That brought Panera’s total to 1,541 units as of Dec. 27.

RELATED: Panera eyes urban locations

Panera also said Jeff Kip, chief financial officer for the past six years and executive vice president, would be leaving the company March 15 to join IAC/InterActiveCorp. A search for his replacement is underway.

Panera operates restaurants under the Panera Bread, St. Louis Bread Co. and Paradise Bakery & Café brands.

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

2/7/2012 5:55:14 PM