Panera Bread Company: This Could Send PNRA Stock Soaring

PNRA StockPanera Bread Co (NASDAQ:PNRA) is pushing the envelope of technology in ways that just didn’t happen a few years ago. In 2014, Panera Bread tested a new concept that they called “Panera 2.0.” The idea was to integrate technology to improve their customers’ overall dining experience (quicker and easier). What does it all mean for Panera stock?

Panera 2.0 gave consumers the ability to order online or from their mobile phones and then pick their orders up whenever they wanted (up to five days later) without waiting in line. Or customers could come into a store, sit down at a table, and have that same online order served to them, just as if they had stood in line.  The program also placed touch-screens away from the main order counter in a separate “Fast Lane Kiosk” to let people in a hurry order food and either eat it in the store or take it to go; again without waiting in line. (Source: “Panera Unveils Panera 2.0,” Panera Bread Co, April 10, 2014.)

What Does New Tech Mean for PNRA Stock?

All of this ability exists on a mobile app that lets customers save their favorite menu items, memorizes their order history, and stores a credit card so that—of course—they don’t have to stand in line. So, in 2014, Panera Bread Co mastered the mitigation of standing in line. But what did that do to Panera’s sales figures? And what has it done for Panera stock?

At the end of Panera’s first quarter of 2016 (April 28, 2016), there were 1,972 Panera Bread stores operating. Only 452 of these had transitioned to the Panera 2.0 format. Sales from “digital utilization” (online/mobile ordering) are at 17% for stores that have not yet converted to the new format, and are at 23% for those that have. Panera is filling between 125,000 and 130,000 e-commerce orders every day. At the end of the first quarter, digital sales were just over $600.0 million. (Source: “Annual Shareholder Meeting Report,” Panera Bread Co, May 19, 2016.)

The chart below illustrates the growth of PNRA stock since the initiative was announced some 28 months ago.  Panera stock has risen more than 27.6% since April 10, 2014. The S&P 500 is up just under 16% in that same timeframe.

The Bottom Line for PNRA stock

The delectable part of the Panera 2.0 recipe is that there are still more than 1,500 stores to convert to the new format. Panera executives expect that e-commerce sales could reach $1.0 billion in the next 16 months. The rollout will take a few years to fully implement, but the result could be sustained double-digit earnings growth throughout that entire period. That would make Panera stock a tasty treat for investors.