Panera Bread 2013 Annual Report Download - page 22

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Unforeseen weather may disrupt our business.
Unforeseen natural disasters, such as earthquakes, hurricanes, or other adverse weather and climate conditions, could disrupt our
operations or those of our franchisees, or suppliers. For example, in 2012, Hurricane Sandy resulted in the temporary closing of
60 Company-owned bakery-cafes and 112 franchise-operated bakery-cafes along the east coast. These events could reduce traffic
in our bakery-cafes, make it difficult or impossible for bakery-cafes to receive deliveries of ingredients or other products, and
otherwise impede our or our franchisees’ ability to continue business operations in a manner consistent with the level and extent
of business activities prior to the occurrence of the unexpected weather, which in turn may materially and adversely impact our
business and operating results.
Our operating results fluctuate due to a number of factors, some of which may be beyond our control, and any of which
may adversely affect our consolidated financial condition.
Our operating results may fluctuate significantly from our forecasts, targets, or projections because of a number of factors, including
the following:
• changes in average weekly net sales and comparable net bakery-cafe sales due to:
• lower customer traffic or average check per transaction, including as a result of the introduction or removal of new
menu items;
• changes in demographics, consumer preferences, and discretionary spending;
• negative publicity about the ingredients we use or the occurrence of food-borne illnesses or other problems at our
bakery-cafes; and
• 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, compensation, 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; and
• fluctuations in supply costs, shortages, or interruptions.
As a result of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter
or for any year. Average weekly sales or comparable bakery-cafe sales in any particular future period may decrease. In the future,
operating results may fall below the expectations of securities analysts and investors, which could cause our stock price to fall.
We believe the market price of our common stock reflects high market expectations for our future operating results. As a result,
if we fail to meet market expectations for our operating results in the future, any resulting decline in the price of our common
stock could be significant.
Our federal, state, and local tax returns have been, and may in the future be, selected for audit by the tax authorities, which
may result in tax assessments or penalties that could have a material adverse impact on our consolidated financial position
and results of operations.
We are subject to federal, state, and local taxes in the United States and Canada, including income, sales, use, and other applicable
taxes. Significant judgment is required in determining the provision for taxes. Additionally, sales and use tax requirements are
often fact-specific, complex and vary from jurisdiction to jurisdiction, which complicates monitoring and compliance. Although
we believe our tax estimates are reasonable and our procedures for collecting sales taxes are appropriate, from time to time, federal,
state, and local tax authorities have challenged, and may in the future challenge, positions we have taken on our tax returns or our
sales tax collection policies. If we are unable to resolve these challenges favorably, we could incur additional tax liability, including
interest and penalties. If material, payment of such additional amounts upon final adjudication, or resolution of any disputes, could
have a material impact on our consolidated financial position and results of operations.