Panera Bread (PNRA) - Wheat trends are as important as Same-Store Sales

All in, a $1 change year-over-year in the cost of wheat per bushel is worth $3.25 million of expense to Panera, or $0.05 in EPS. For 2008, PNRA is fully covered for essentially all their wheat needs at an all-in cost of $14 a bushel.

Currently, wheat is trading at $8.00.

GIL: The Market Does Not Get It (Though CEO Does).

Chamandy sold $147mm in stock in 4Q, just as a multi-year run in margin improvement from accelerated sales growth layered on top of sourcing-driven cost cuts showed signs of cooling. 4 of the top 8 buyers of the stock were Canadian. Average multiple of 22x EBITDA was seemingly rich for an underwear company that is underspending in SG&A. What happens when capacity growth starts to slow in '09, pricing pressure (more WMT exposure) kicks in, GM% erodes, and SG&A growth accelerates to support a new mass-retailer-based business model? We can't imagine that the end result will be anything that could support a 20x+ EBITDA multiple.