"Unlike Hanesbrands (which is up on decelerating volume today), one of Hedgeye Restaurants analyst Howard Penney's favorite names (Panera - PNRA) is down on decelerating volume," writes Hedgeye CEO Keith McCullough. "It's down on an Old Wall "valuation" downgrade, to boot!"
Here's a brief update on Panera Bread from a recent institutional research note written by Penney:
"It seems as if PNRA has found the secret formula, as the Company reported a stellar 4Q16, with their Panera 2.0 concept stealing the show. According to management, they have completed the rollout of their 2.0 concept to all company-owned bakery cafes.
As you may recall from our delivery black book presentation in January, we laid out why PNRA was well-positioned to control its own destiny, and at the center of it were the following reasons: PNRA is making critical investments to get ahead; PNRA owning delivery will set them apart; and PNRA’s earnings are set to accelerate. (CHECK, CHECK, and CHECK). The Company’s aggressive investments to build out its Panera 2.0 concept (and simultaneously its digital platform) and delivery capabilities have propelled the brand to rarified air, as evidenced by its 4Q16 performance.
Panera now leads the industry in digital sales, with 24% of sales in company cafes occurring digitally. This 24% figure is the highest outside of the big three pizza brands. Furthermore, PNRA’s Rapid Pick-Up program (mobile order & pay) now represents 9% of sales. In relation to digital, PNRA has now grown its MyPanera program to an industry leading 25 million members, and according to management, 51% of transactions are done through their loyalty program."
