Panera Bread Co. saw net income fall 15 percent year over year in the second quarter ended June 30, the company said Tuesday.
Profit declined from $49.1 million to $41.9 million, due in part to charges the company incurred from refranchising efforts in Q2 of this year and a benefit it received in 2014 from a resolved insurance matter, which slightly elevated last year’s results, Panera said.
The bakery-cafe company saw Q2 comp sales increase by 2.4 percent year over year at its company-owned stores and by 1.8 percent systemwide.
CEO Ron Shaich tempered expectations for the rest of the fiscal year, noting that the company’s push to upgrade its technology and operations at about 300 locations—known as Panera 2.0—would hinder profit growth in the short term but position the company for gains down the road.
“The impact of the startup and ramp up costs associated with the hundreds of Panera 2.0 conversions expected in the third and fourth quarters of 2015 and the hundreds more expected in 2016, along with the dozens of delivery hubs opened in the past eighteen months, will dampen near-term profit growth,” Shaich said in a statement. “In our history, sales have led and profits have followed, and we believe that will again be the case at Panera.”