Panera Bread To Increase Share Buyback, Sell Cafes; Stock Up

(RTTNews) - Panera Bread Co. (PNRA) said that its board approved an increase to the Company's current share repurchase program to $750 million. It expects to purchase $500 million of shares within the next twelve months, through a combination of cash on hand, cash flow from operations, and $500 million of new debt, taking advantage of the attractive current interest rate environment.

Since 2012, the Company has repurchased approximately $511 million of Panera common stock, or 11% of the shares outstanding, including $154 million of shares that were repurchased during 2014.

In addition, Panera noted that it is making significant progress on its previously announced plan to refranchise 50 to 150 cafes in 2015. As of today, the Company has entered into letters of intent to sell and refranchise 73 cafes and is on track to reach its refranchising goal for 2015. The Company expects the sale of these cafes to be accretive to ongoing earnings and will have a related one-time charge. This ongoing accretion was included in the Company's full-year earnings target.

The company also expects to use the proceeds from the refranchising efforts to repurchase shares. These repurchases would be incremental to the $500 million of planned repurchases.

In the coming months, the Board intends to add an independent outside director with extensive senior-level technology experience.

The company also noted that the Board and management team regularly enlist shareholder input with the shared goal of delivering value, and to that end, the Company recently engaged in a constructive dialogue with one of its shareholders, Luxor Capital Group, LP.

PNRA closed Wednesday trading at $163.92, up $1.40 or 0.86%. In after hours, the stock further gained $18.08 or 11.03%.