Panera Bread 2009 Annual Report Download - page 20

•unfavorable general economic conditions in the markets in which we operate, including, but not limited
to, downturns in the housing market, higher interest rates, higher unemployment, lower disposable income
due to higher energy or other consumer costs, lower consumer confidence and other events or factors that
adversely affect consumer spending.
•seasonality, including as a result of inclement weather.
•cost increases due to:
•changes in our operating costs;
•labor availability and increased labor costs, including wages of management and associates, compen-
sation, insurance and health care; and
•changes in business strategy including concept evolution and new designs.
•profitability of new bakery-cafes, especially in new markets;
•delays in new bakery-cafe openings;
•fluctuations in supply costs, shortages or interruptions; and
•natural disasters and other calamities.
Increased advertising and marketing costs could adversely affect our results of operations.
We expect to dedicate greater resources to advertising and marketing than in previous years. If new advertising
and other marketing programs do not drive increased bakery-cafe sales or if the costs of advertising, media or
marketing increase greater than expected, our financial results could be materially adversely affected.
Our federal, state and local tax returns have been and may in the future be selected for audit by the taxing
authorities, which may result in tax assessments or penalties that could have a material adverse impact on
our results of operations and financial position.
We are subject to federal, state and local taxes in the United States. Significant judgment is required in
determining the provision for taxes. Although we believe our tax estimates are reasonable, if the IRS or other taxing
authority disagrees with the positions we have taken on our tax returns, we could have additional tax liability,
including interest and penalties. If material, payment of such additional amounts upon final adjudication of any
disputes could have a material impact on our results of operations and financial position.
A regional or global health pandemic could severely affect our business.
A health pandemic is a disease outbreak that spreads rapidly and widely by infection and affects many
individuals in an area or population at the same time. If a regional or global health pandemic occurs, depending upon
its duration, location and severity, our business could be severely affected. Generally, we are viewed by our
customers as an “everyday oasis”, a friendly, all day destination where people can gather with friends and business
colleagues. Customers might avoid public gathering places in the event of a health pandemic, and local, regional or
national governments might limit or ban public gatherings to halt or delay the spread of disease. A regional or global
health pandemic might also adversely impact our business by disrupting or delaying production and delivery of
ingredients and products in our supply chain and by causing staffing shortages in our bakery-cafes. The impact of a
health pandemic might be disproportionately greater on us than on other companies that depend less on the
gathering of people for the sale of their products.
Regional factors could negatively impact our results of operations.
There are several states, particularly in the Midwest region of the United States, in which Panera, our
franchisees, or both own and operate a significant number of bakery-cafes. As a result, the economic conditions,
state and local laws, government regulations and weather conditions affecting those particular states, or a
geographic region generally, may have a material impact upon our results of operations.
14