Panera Versus Chipotle: Here’s What to Expect After the Bell

Panera (NASDAQ:PNRA) and Chipotle Mexican Grill (NYSE:CMG) will both report their respective fourth-quarter and full-year 2012 earnings after the bell on Tuesday. The two companies are often thrown together as iconic competitors within the same market, and there has been a lot of coverage given to their relative strengths and weaknesses.

Side by side, Chipotle is the more expensive company with a trailing price-to-earnings ratio of 36.15, compared to Panera’s 30.29. Chipotle has a forward P/E of 30.30, while Panera clocks in at 23.46. Chipotle has seen negative year-over-year movement on the stock chart, but has stronger margins and more operating cash flow than Panera. On the other hand, Panera’s stock price has increased 375 percent over the past five years, and has stronger earnings growth than Chipotle.

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Earnings usually act as a strong catalyst for a company’s stock price, so let’s take a look at where each stands heading into tonight’s reports…


For the fourth quarter, analysts are looking for a 22.5 percent year-over-year increase in earnings to $1.74 per share, and a 15.8 percent year-over-year growth in revenue to $574.09 million. Panera has beaten analysts’ estimates by about 4 percent for each of the last three quarters, which is a positive sign for these expectations.

Panera has set a precedence for these strong earnings expectations over the past few quarters. Year-over-year growth in the third quarter was 16.8 percent, while earnings grew 31.9 percent. This is pretty standard fare for the company.

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012*
Revenue ($) in millions 495.76 498.58 530.59 529.34 574.09
Diluted EPS ($) 1.31 1.40 1.50 1.24 1.74


For the year, analysts are looking for $2.13 billion in total revenue and earnings of $5.88 per share, for optimistic gains of 16.9 percent and 29.2 percent, respectively.

Fiscal Year 2008 2009 2010 2011 2012*
Revenue ($) in millions 1,299 1,353 1,542 1,822 2.13
Diluted EPS ($) 2.22 2.78 3.62 4.55 5.88



On January 15, Chipotle released preliminary fourth-quarter results that did not sit well with investors. Shares fell 5.5 percent over the course of the day as Mr. Market reevaluated how much it thought the company would be worth after its full earnings report arrived.

The company announced it was expecting fourth-quarter earnings in the range between $1.92 and $1.97 per diluted share, below the $2.09 that analysts were looking for. However, the company is expecting revenue to climb 17.2 percent to $699.2 million, ahead of estimates for $690.86 million.

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012*
Revenue ($) in millions 596.75 640.60 690.93 700.53 699.2
Diluted EPS ($) 1.81 1.97 2.56 2.27 $1.92 – $1.97


Comparable restaurant sales are expected to increase 3.8 percent, but restaurant-level operating margins are expected to fall 150 basis points year-over-year to 24.6 percent. This is partially due to a 130 basis-point increase in the cost of food, which is expected to sit at 33.5 percent of sales.

The markets have been kind to Chipotle since that initial reaction to the report, though. With shares back up over 10 percent since then, the company has more than made up for the losses.

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