Why the tepid forecast, Panera?
The stock is up Wednesday despite a few soft points in the restaurant chain's earnings report. Is the competition catching up?
While profits were up, same-store sales growth was up only 1.7 percent year over year, which was due more to the size of the checks than to volume, as traffic actually fell this quarter, something the company attributed to the particularly harsh winter this year.
Guidance for the full year ahead also came in a bit soft for the company, missing analysts' expectations, as CEO Ronald Shaich announced that Panera would be reinvesting in many of its stores this year.
In Wednesday's installment of Stock of the Day, Motley Fool Supernova analyst Simon Erickson discusses the future of Panera, and says that this will be somewhat of a "wait-and-see" moment for the company. He'll be looking ahead to March when the full reinvestment plan will be detailed, to see if this move will create long-term value.
So does that mean the stock is still a long-term buy, or should investors be holding off? Simon says he still sees Panera as a stock that he believes in as a long-term buy and hold. Despite the competition ramping up in the fast casual space, he thinks Panera can hold its own and deliver for shareholders in the years ahead.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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