Panera Bread 2013 Annual Report Download - page 3

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April 22, 2014
Dear Stockholder,
2013 represented another successful and productive year for Panera. Our earnings per share (EPS) grew 16% in
fiscal 2013, which includes the impact of a 53rd operating week. Our market cap was nearly $5 billion as of the
fiscal year end, representing a roughly $3.3 billion increase over the past five years, or 39.8% compound annual
growth. The shareholder value created speaks to Panera’s history of producing real results over the long run.
Panera’s financial performance has historically benefited from strategic investments, particularly investments
that directly support the customer experience. In that sense, 2013 was no different than past years, as we
continued to make investments in the quality of our food and the strength of our people. What changed, however,
was the recognition that our sales, after years of uninterrupted growth, may – in some cafes, on some days –
appear to have outstripped our capabilities. Keep in mind, our average unit volumes have grown from $1.6
million annually in 2000 to roughly $2.5 million as of last year.
Understanding this, and with an appreciation for the powerful opportunities that are available to our company, we
began to consider new approaches to leverage the inherent potential of the Panera brand.
Panera’s Journey
Panera’s current evolution has roots that go back to 2010. It was during that year when we first recognized that
our continued growth, at its historic pace, had the potential to overwhelm our operational capabilities. Parallel to
this, however, came the realization that technology, as part of a holistic and comprehensive solution and powered
by operational excellence, could provide an even better experience for our guests.
Fast forward to 2013, and our comprehensive vision for Panera’s future began to take form. We focused on our
guest experience and developed an integrated and enhanced experience, which we’re calling Panera 2.0. We
focused on our cafes, and utilized a total quality management paradigm to drive operational integrity. We
focused on our customers and gained tremendous clarity on Panera’s performance relative to the levers that drive
it and why. And we focused on growth and continued to build out capabilities to develop new growth platforms
for Panera.
2014 Key Initiatives
Our 2014 Key Initiatives highlight the potential we see in our business. These initiatives are the things we
believe we must get done to create the future we all desire for Panera.
In 2014, we’re focused on:
‰Improving Panera’s competitive position
‰Expanding growth opportunities
‰Ensuring we have the necessary capabilities to improve our competitive position and expand growth
opportunities
‰Delivering Panera’s 2014 financial plan
Improve Panera’s Competitive Position
Future success for Panera begins with providing our customers a better alternative than our competitors. We are
working to do this with initiatives focused on a number of key areas.