10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

________________

Form 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended March 27, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 0-19253

Panera Bread Company

(Exact Name of Registrant as Specified in Its Charter)

Delaware	04-2723701
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

3630 South Geyer Road, Suite 100, St. Louis, MO	63127
(Address of Principal Executive Offices)	(Zip Code)

(314) 984-1000

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   x Yes   ¨ No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of April 24, 2012, the registrant had 28,349,934 shares of Class A Common Stock ($.0001 par value per share) and 1,383,687 shares of Class B Common Stock ($.0001 par value per share) outstanding.

PANERA BREAD COMPANY

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1.	FINANCIAL STATEMENTS (unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	21
PART II	OTHER INFORMATION	22
ITEM 1.	LEGAL PROCEEDINGS	22
ITEM 1A.	RISK FACTORS	22
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	23
ITEM 6.	EXHIBITS	24
	Signatures	25
	Exhibit Index	26
	EX-31.1
	EX-31.2
	EX-31.3
	EX-32
	EX-101 INSTANCE DOCUMENT
	EX-101 SCHEMA DOCUMENT
	EX-101 CALCULATION LINKBASE DOCUMENT
	EX-101 LABELS LINKBASE DOCUMENT
	EX-101 PRESENTATION LINKBASE DOCUMENT
	EX-101 DEFINITION LINKBASE DOCUMENT

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PANERA BREAD COMPANY

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share information)

	March 27, 2012			December 27, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	221,439		$	222,640
Trade accounts receivable, net	23,410			30,700
Other accounts receivable	9,292			24,009
Inventories	16,033			17,016
Prepaid expenses and other	77,065			31,228
Deferred income taxes	26,856			27,526
Total current assets	374,095			353,119
Property and equipment, net	499,904			492,022
Other assets:
Goodwill	108,119			108,071
Other intangible assets, net	65,675			67,269
Deposits and other	6,819			6,841
Total other assets	180,613			182,181
Total assets	$	1,054,612		$	1,027,322
LIABILITIES
Current liabilities:
Accounts payable	$	9,281		$	15,884
Accrued expenses	210,396			222,450
Total current liabilities	219,677			238,334
Deferred rent	54,813			54,055
Deferred income taxes	35,101			34,345
Other long-term liabilities	41,703			45,512
Total liabilities	351,294			372,246
Commitments and contingencies (Note 8)
STOCKHOLDERS’ EQUITY
Common stock, $.0001 par value per share:
Class A, 112,500,000 shares authorized; 30,354,078 issued and 28,303,801 outstanding at March 27, 2012; and 30,330,759 issued and 28,265,672 outstanding at December 27, 2011	3			3
Class B, 10,000,000 shares authorized; 1,383,687 issued and outstanding at March 27, 2012 and December 27, 2011	—			—
Treasury stock, carried at cost; 2,050,277 shares at March 27, 2012 and 2,048,338 shares at December 27, 2011	(175,848		)	(175,595		)
Preferred stock, $.0001 par value per share; 2,000,000 shares authorized and no shares issued or outstanding at March 27, 2012 and December 27, 2011	—			—
Additional paid-in capital	157,432			150,093
Accumulated other comprehensive income	280			308
Retained earnings	721,451			680,267
Total stockholders’ equity	703,318			655,076
Total liabilities and stockholders’ equity	$	1,054,612		$	1,027,322

The accompanying notes are an integral part of the consolidated financial statements.

3

PANERA BREAD COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share information)

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Revenues:
Bakery-cafe sales, net	$	439,215		$	365,579
Franchise royalties and fees	24,822			22,582
Fresh dough and other product sales to franchisees	34,542			33,939
Total revenues	498,579			422,100
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products	129,028			106,209
Labor	133,827			114,050
Occupancy	31,108			26,773
Other operating expenses	57,516			47,327
Total bakery-cafe expenses	351,479			294,359
Fresh dough and other product cost of sales to franchisees	30,145			28,024
Depreciation and amortization	21,321			19,094
General and administrative expenses	26,667			26,671
Pre-opening expenses	1,611			978
Total costs and expenses	431,223			369,126
Operating profit	67,356			52,974
Interest expense	210			225
Other (income) expense, net	438			(804		)
Income before income taxes	66,708			53,553
Income taxes	25,524			20,779
Net income	$	41,184		$	32,774
Earnings per common share:
Basic	$	1.41		$	1.10
Diluted	$	1.40		$	1.09
Weighted average shares of common and common equivalent shares outstanding:
Basic	29,183			29,845
Diluted	29,458			30,160
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	(28	)	$	3
Other comprehensive income (loss)	$	(28	)	$	3
Comprehensive income	$	41,156		$	32,777

The accompanying notes are an integral part of the consolidated financial statements.

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PANERA BREAD COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Cash flows from operations:
Net income	$	41,184		$	32,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,321			19,094
Stock-based compensation expense	2,402			3,019
Excess tax benefit from exercise of stock options	(1,869		)	(593		)
Deferred income taxes	1,426			7,456
Other	(1,896		)	870
Changes in operating assets and liabilities, excluding the effect of acquisitions and dispositions:
Trade and other accounts receivable, net	22,007			(6,044		)
Inventories	983			266
Prepaid expenses and other	2,313			2,569
Deposits and other	22			(321		)
Accounts payable	(6,603		)	1,622
Accrued expenses	(5,855		)	(14,877		)
Deferred rent	758			1,273
Other long-term liabilities	(3,809		)	(4,125		)
Net cash provided by operating activities	72,384			42,983
Cash flows from investing activities:
Additions to property and equipment	(30,119		)	(22,714		)
Prepaid acquisition consideration	(48,150		)	—
Proceeds from sale of bakery-cafes	—			115
Net cash used in investing activities	(78,269		)	(22,599		)
Cash flows from financing activities:
Repurchase of common stock	(253		)	(651		)
Exercise of employee stock options	2,470			519
Excess tax benefit from exercise of stock options	1,869			593
Proceeds from issuance of common stock under employee benefit plans	598			516
Net cash provided by financing activities	4,684			977
Net (decrease) increase in cash and cash equivalents	(1,201		)	21,361
Cash and cash equivalents at beginning of period	222,640			229,299
Cash and cash equivalents at end of period	$	221,439		$	250,660

The accompanying notes are an integral part of the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, which consist of the accounts of Panera Bread Company and its wholly owned direct and indirect subsidiaries (collectively, the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the fiscal year ended December 27, 2011. These unaudited consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2011, as filed with the SEC on February 21, 2012 and amended by Form 10-K/A, filed with the SEC on March 20, 2012. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 27, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP contained herein.

The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of its financial position and comprehensive income for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year.

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB") updated its guidance on the annual testing of goodwill for impairment to allow companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards.  The updated guidance applies to goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statements.

In June 2011 and December 2011, the FASB updated its guidance regarding comprehensive income to require companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This updated guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. This updated guidance applies to fiscal years beginning after December 15, 2011. The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statement presentation.

Note 2. Business Combinations and Divestitures

North Carolina Acquisition

On March 28, 2012, the first day of the second quarter of fiscal 2012, the Company obtained control of 16 bakery-cafes and the related area development rights from a Raleigh-Durham, North Carolina franchisee for a purchase price of approximately $48.2 million, which the Company paid in cash on March 27, 2012. The Company purchased substantially all of the assets and certain liabilities of the bakery-cafes. As of March 27, 2012, the cash paid for the acquisition was classified within prepaid expenses and other within the Consolidated Balance Sheets. The Company's operating results for the reported periods were not impacted by this acquisition as it was completed subsequent to March 27, 2012. Refer to Note 11 for information related to this subsequent event.

Indiana Franchisee Acquisition

On July 26, 2011, the Company purchased substantially all the assets and certain liabilities of five Paradise Bakery & Café (“Paradise”) bakery-cafes and the related area development rights from an Indiana franchisee for a purchase price of approximately $5.1 million. Approximately $4.6 million of the purchase price was paid on July 26, 2011, with $0.5 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on July 26, 2013, the second anniversary of the transaction closing date, with any remaining holdback amounts reverting to the prior franchisee. As a result of the acquisition, the Company gained control of the five bakery-cafes and further expanded Company-owned operations into Indiana. The Consolidated Statements of Comprehensive Income include the results of operations from these five bakery-cafes from the date of their acquisition. The pro-forma impact of the acquisition on prior periods is not presented, as the impact was

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not material to reported results.

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.1 million to inventories, $1.3 million to property and equipment, $1.3 million to intangible assets, which represent the fair value of re-acquired territory rights, $0.7 million to liabilities, and $3.1 million to goodwill. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafes and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is anticipated to be tax deductible and is included in the Company Bakery-Cafe Operations segment.

Milwaukee Franchisee Acquisition

On April 19, 2011 the Company purchased substantially all the assets and certain liabilities of 25 bakery-cafes and the related area development rights from a Milwaukee franchisee for a purchase price of approximately $41.9 million. Approximately $39.8 million of the purchase price was paid on April 19, 2011, with $2.1 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on the 18 month anniversary of the transaction closing date, October 19, 2012, with any remaining holdback amounts reverting to the prior franchisee. As a result of the acquisition, the Company gained control of the 25 bakery-cafes and expanded Company-owned operations into Wisconsin. The Consolidated Statements of Comprehensive Income include the results of operations from the operating bakery-cafes from the date of the acquisition.

The following supplemental pro forma information is presented for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on December 29, 2010, nor are they indicative of any future results (in thousands):

	Pro Forma for the 13 Weeks Ended
	March 29, 2011
Bakery-cafe sales, net	$	378,164
Net income	33,023

The pro forma amounts included in the table above reflect the application of the Company’s accounting policies and adjustment of the results of the Milwaukee bakery-cafes to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from December 29, 2010, together with the consequential tax impacts.    

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.4 million to inventories, $9.3 million to property and equipment, $23.3 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable lease agreements, $1.7 million to liabilities, and $10.6 million to goodwill. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafes and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is anticipated to be tax deductible and is included in the Company Bakery-Cafe Operations segment.

Texas Divestiture

On February 9, 2011, the Company sold substantially all of the assets of two Paradise bakery-cafes to an existing Texas franchisee for a sales price of approximately $0.1 million, resulting in a nominal gain, which is classified in other (income) expense, net in the Consolidated Statements of Comprehensive Income.

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Note 3. Fair Value Measurements

The Company’s $18.3 million and $27.5 million in cash equivalents at March 27, 2012 and December 27, 2011, respectively, were carried at fair value in the Consolidated Balance Sheets based on quoted market prices for identical securities (Level 1 inputs).

Note 4. Inventories

Inventories consisted of the following (in thousands):

	March 27, 2012		December 27, 2011
Food:
Fresh dough facilities:
Raw materials	$	2,906	$	2,998
Finished goods	431		261
Bakery-cafes:
Raw materials	10,109		11,048
Paper goods	2,587		2,709
Total	$	16,033	$	17,016

Note 5. Goodwill

The following is a reconciliation of the beginning and ending balances of the Company’s goodwill by reportable segment at March 27, 2012 (in thousands):

	Company Bakery- Cafe Operations		Franchise Operations		Fresh Dough Operations		Total
Balance as of December 27, 2011	$	104,442	$	1,934	$	1,695	$	108,071
Currency translation	48		—		—		48
Balance as of March 27, 2012	$	104,490	$	1,934	$	1,695	$	108,119

Note 6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	March 27, 2012		December 27, 2011
Compensation and related employment taxes	$	46,918	$	41,491
Unredeemed gift cards, net	45,080		58,321
Insurance	25,244		23,629
Taxes, other than income tax	18,643		18,512
Capital expenditures	14,786		19,116
Advertising	8,023		5,334
Rent	6,693		5,958
Loyalty program	6,644		5,916
Litigation settlements (Note 8)	6,500		5,000
Fresh dough and other product operations	5,264		7,101
Utilities	3,763		4,170
Deferred purchase price	2,567		2,565
Deferred revenue	2,286		2,236
Other	17,985		23,101
Total	$	210,396	$	222,450

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Note 7. Credit Facility

The Company and certain of its direct and indirect subsidiaries, as guarantors, are parties to an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with Bank of America, N.A. and other lenders party thereto, which provides for a secured revolving credit facility of $250.0 million to be used for general corporate purposes, including working capital, capital expenditures, permitted acquisitions, and share repurchases. The Amended and Restated Credit Agreement, which is collateralized by the capital stock of the Company’s present and future material subsidiaries, will become due on March 7, 2013, subject to acceleration upon certain specified events of default.

As of March 27, 2012 and December 27, 2011, the Company had no balance outstanding under the Amended and Restated Credit Agreement. The Company incurred $0.1 million of commitment fees for each of the thirteen weeks ended March 27, 2012 and March 29, 2011, and accrued interest related to the commitment fees was $0.1 million at March 27, 2012 and December 27, 2011, respectively. As of March 27, 2012, the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.

Note 8. Commitments and Contingencies

Lease Obligations

As of March 27, 2012, the Company guaranteed operating leases of 24 franchisee or affiliate locations, which the Company accounted for in accordance with the accounting standard for guarantees. These leases have terms expiring on various dates from April 30, 2012 to December 31, 2023 and a potential amount of future rental payments of approximately $23.5 million as of March 27, 2012. The obligations under these leases will generally continue to decrease over time as these operating leases expire. The Company has not recorded a liability for certain of these guarantees as they arose prior to the implementation of the accounting standard for guarantees and, unless modified, are exempt from its requirements. The Company has not recorded a liability for those guarantees issued after the effective date of this accounting standard because the fair value of each such lease guarantee was determined by the Company to be insignificant based on an analysis of the facts and circumstances of each such lease and each such franchisee’s performance, and the Company did not believe it was probable it would be required to perform under any guarantees at the time the guarantees were issued. The Company has not had to make any payments related to any of these guaranteed leases. The applicable franchisees or affiliates have primary liability for these operating leases.

Legal Proceedings

On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of Panera Bread Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s Business and Professions. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court might find just and proper. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding this purported class action lawsuit and the purported class action lawsuit filed by David Carter, which is described in the subsequent paragraph. Under the terms of the Memorandum of Agreement, the parties have agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The aggregate settlement amount of $5.0 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of the Company's franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint seeks, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court might find just and proper. This matter was consolidated with the lawsuit described in the immediately preceding paragraph and is expected to be resolved under the Memorandum of Agreement described above.

On December 16, 2010, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Denarius Lewis, Caroll Ruiz, and Corey Weiner, former employees of a subsidiary of Panera Bread Company. The lawsuit was

9

filed in the United States District Court for Middle District of Florida. The complaint alleges, among other things, violations of the Fair Labor Standards Act. The complaint seeks, among other relief, collective, and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees and such other relief as the Court might find just and proper. On February 29, 2012, the parties agreed to settle this matter for an amount up to $1.5 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The agreement includes no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The settlement amount of $1.5 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

In addition, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not, however, currently expect that the costs to resolve these matters individually or in the aggregate will have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Other

The Company is subject to on-going federal and state income tax audits and sales tax audits and any unfavorable rulings could materially and adversely affect its consolidated financial condition or comprehensive income. The Company believes reserves for these matters are adequately provided for in its consolidated financial statements.

Note 9. Business Segment Information

The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating activities of the bakery-cafes owned directly and indirectly by the Company. The Company-owned bakery-cafes conduct business under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Café® names. These bakery-cafes offer some or all of the following: fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complementary products through on-premise sales, as well as catering.

The Franchise Operations segment is comprised of the operating activities of the franchise business unit which licenses qualified operators to conduct business under the Panera Bread or Paradise Bakery & Café names and also monitors the operations of these bakery-cafes. Under the terms of most of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera Bread or Paradise Bakery & Café names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, cream cheese and indirectly supplies proprietary sweet goods items through a contract manufacturing arrangement, to Company-owned and franchise-operated bakery-cafes. The fresh dough is sold to a number of Company-owned and franchise-operated bakery-cafes at a delivered cost generally not to exceed 27 percent of the retail value of the end product. The sales and related costs to the franchise-operated bakery-cafes are separately stated line items in the Consolidated Statements of Comprehensive Income. The operating profit related to the sales to Company-owned bakery-cafes is classified as a reduction of the costs in the cost of food and paper products in the Consolidated Statements of Comprehensive Income.

10

Information related to the Company’s three business segments follows (in thousands):

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Revenues:
Company bakery-cafe operations	$	439,215		$	365,579
Franchise operations	24,822			22,582
Fresh dough and other product operations	71,343			66,025
Intercompany sales eliminations	(36,801		)	(32,086		)
Total revenues	$	498,579		$	422,100
Segment profit:
Company bakery-cafe operations	$	87,736		$	71,220
Franchise operations	22,801			21,007
Fresh dough and other product operations	4,397			5,915
Total segment profit	$	114,934		$	98,142
Depreciation and amortization	$	21,321		$	19,094
Unallocated general and administrative expenses	24,646			25,096
Pre-opening expenses	1,611			978
Interest expense	210			225
Other (income) expense, net	438			(804		)
Income before income taxes	$	66,708		$	53,553
Depreciation and amortization:
Company bakery-cafe operations	$	18,500		$	16,244
Fresh dough and other product operations	1,649			1,744
Corporate administration	1,172			1,106
Total depreciation and amortization	$	21,321		$	19,094
Capital expenditures:
Company bakery-cafe operations	$	24,921		$	21,890
Fresh dough and other product operations	1,917			217
Corporate administration	3,281			607
Total capital expenditures	$	30,119		$	22,714

	March 27, 2012		December 27, 2011
Segment assets:
Company bakery-cafe operations	$	720,096	$	682,246
Franchise operations	6,374		7,502
Fresh dough and other product operations	48,212		47,710
Total segment assets	$	774,682	$	737,458
Unallocated trade and other accounts receivable	2,362		3,359
Unallocated property and equipment	23,159		21,565
Unallocated deposits and other	4,186		4,234
Other unallocated assets	250,223		260,706
Total assets	$	1,054,612	$	1,027,322

“Unallocated trade and other accounts receivable” relates primarily to rebates and interest receivable, “unallocated property and equipment” relates primarily to corporate fixed assets, “unallocated deposits and other” relates primarily to insurance deposits, and “other unallocated assets” relates primarily to cash and cash equivalents and deferred income taxes.

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Note 10. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except for per share data):

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Amounts used for basic and diluted per share calculations:
Net income	$	41,184	$	32,774
Weighted average number of shares outstanding — basic	29,183		29,845
Effect of dilutive stock-based employee compensation awards	275		315
Weighted average number of shares outstanding — diluted	29,458		30,160
Earnings per common share:
Basic	$	1.41	$	1.10
Diluted	$	1.40	$	1.09

For the thirteen weeks ended March 27, 2012 and March 29, 2011, weighted-average outstanding stock options, restricted stock, and stock-settled appreciation rights of less than 0.1 million shares were excluded in calculating diluted earnings per share as the exercise price exceeded fair market value and the inclusion of such shares would have been antidilutive.

Note 11. Subsequent Event

On March 28, 2012, the first day of the second quarter of fiscal 2012, the Company obtained control of 16 bakery-cafes and the related area development rights from a Raleigh-Durham, North Carolina franchisee for a purchase price of approximately $48.2 million, which the Company paid in cash on March 27, 2012. The Company purchased substantially all of the assets and certain liabilities of the bakery-cafes. As of March 27, 2012, the cash paid for the acquisition was classified within prepaid expenses and other within the Consolidated Balance Sheets. The Company's operating results for the reported periods were not impacted by this acquisition as it was completed subsequent to March 27, 2012. Refer to Note 2 for information related to business combinations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations

Forward-Looking Statements

Matters discussed in this report and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, expressed or implied, of our anticipated growth, operating results, future earnings per share, plans, and objectives contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These statements are often identified by the words “believe”, “positioned”, “estimate”, “project”, “plan”, “goal”, “target”, “assume”, “continue”, “intend”, “expect”, “future”, “anticipate”, and similar expressions that are not statements of historical fact. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this report and in our other public filings with the Securities and Exchange Commission, or SEC, including our Form 10-K for the year ended December 27, 2011 and our quarterly reports on Form 10-Q. All forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this report or other periodic reports represent our estimates as of the date made and should not be relied upon as representing our estimates as of any subsequent date. We expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

General

Panera Bread Company and its subsidiaries are referred to as the “Company,” “Panera Bread,” or in the first person notation of “we,” “us,” and “our” in the following discussion.

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Our revenues are derived from Company-owned net bakery-cafe sales, fresh dough and other product sales to franchisees, and franchise royalties and fees. Fresh dough and other product sales to franchisees are primarily the sales of fresh dough, produce, tuna, and cream cheese to certain of our franchisees. Franchise royalties and fees include royalty income and franchise fees. The cost of food and paper products, labor, occupancy, and other operating expenses relate primarily to Company-owned net bakery-cafe sales. The cost of fresh dough and other product sales to franchisees relates primarily to the sale of fresh dough, produce, tuna, and cream cheese to certain of our franchisees. General and administrative, depreciation and amortization, and pre-opening expenses relate to all areas of revenue generation.

Use of Non-GAAP Measurements

We include in this report information on Company-owned, franchise-operated, and system-wide comparable net bakery-cafe sales percentages. Company-owned comparable net bakery-cafe sales percentages are based on net sales from Company-owned bakery-cafes included in our base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchised bakery-cafes, as reported by franchisees, that are included in our base store bakery-cafes. System-wide comparable net bakery-cafe sales percentages are based on net sales at Company-owned and franchise-operated bakery-cafes that are included in our base store bakery-cafes. Bakery-cafes and other restaurant or bakery-cafe concepts are included in the comparable net bakery-cafe sales percentages only if we or our franchisee previously held or acquired a 100 percent ownership interest prior to the first day of the prior fiscal year.  Comparable net bakery-cafe sales exclude closed locations.

Comparable net bakery-cafe sales percentages are non-GAAP financial measures, which should not be considered in isolation or as a substitute for other measures of performance prepared in accordance with generally accepted accounting principles in the United States, or GAAP, and may not be equivalent to comparable net bakery-cafe sales as defined or used by other companies.  We do not record franchise-operated net bakery-cafe sales as revenues. However, royalty revenues are calculated based on a percentage of franchise-operated net bakery-cafe sales, as reported by franchisees. We use franchise-operated and system-wide net sales information internally in connection with store development decisions, planning, and budgeting analyses. We believe franchise-operated and system-wide net sales information is useful in assessing consumer acceptance of our brand, facilitates an understanding of our financial performance and the overall direction and trends of net sales and operating income, helps us appreciate the effectiveness of our advertising and marketing initiatives, to which our franchisees also contribute based on a percentage of their net sales, and provides information that is relevant for comparison within the industry.

We also include in this report information on Company-owned, franchise-operated, and system-wide average weekly net sales. Average weekly net sales are calculated by dividing total net sales in the period by operating weeks in the period. Accordingly, year-over-year results reflect net sales for all locations, whereas comparable net bakery-cafe sales exclude closed locations and are based on net sales from bakery-cafes included in our base store bakery-cafes. New stores typically experience an opening “honeymoon” period during which they generate higher average weekly net sales in the first 12 to 16 weeks they are open as customers “settle-in” to normal usage patterns from initial trial of the location. On average, the “settle-in” experienced is 5 percent to 10 percent less than the average weekly net sales during the “honeymoon” period. As a result, year-over-year results of average weekly net sales are generally lower than the results in comparable net bakery-cafe sales. This results from the relationship of the number of bakery-cafes in the “honeymoon” phase, the number of bakery-cafes in the “settle-in” phase, and the number of bakery-cafes in the comparable bakery-cafe base.

Executive Summary of Results

For the thirteen weeks ended March 27, 2012, we earned $1.40 per diluted share with the following performance on key metrics: system-wide comparable net bakery-cafe sales grew 6.3 percent compared to the thirteen weeks ended March 29, 2011 (growth of 7.5 percent for Company-owned bakery-cafes and growth of 5.2 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased5.8 percent to $45,576 ($45,426 for Company-owned bakery-cafes and $45,714 for franchise-operated bakery-cafes); 22 new bakery-cafes opened system-wide (seven Company-owned bakery-cafes and 15 franchise-operated bakery-cafes); and one Company-owned bakery-cafe closed.

For the thirteen weeks ended March 29, 2011, we earned $1.09 per diluted share with the following performance on key metrics: system-wide comparable bakery-cafe sales grew 3.3 percent compared to the thirteen weeks ended March 30, 2010 (growth of 3.3 percent for Company-owned bakery-cafes and growth of 3.4 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased2.7 percent to $43,096 ($42,532 for Company-owned bakery-cafes and $43,568 for franchise-operated bakery-cafes); and 19 new bakery-cafes opened system-wide (eight Company-owned bakery-cafes and 11 franchise-operated bakery-cafes).

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The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Consolidated Statements of Comprehensive Income for the periods indicated. Percentages may not add due to rounding:

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Revenues:
Bakery-cafe sales, net	88.1	%	86.6	%
Franchise royalties and fees	5.0		5.3
Fresh dough and other product sales to franchisees	6.9		8.0
Total revenues	100.0	%	100.0	%
Costs and expenses:
Bakery-cafe expenses (1):
Cost of food and paper products	29.4	%	29.1	%
Labor	30.5		31.2
Occupancy	7.1		7.3
Other operating expenses	13.1		12.9
Total bakery-cafe expenses	80.0		80.5
Fresh dough and other product cost of sales to franchisees (2)	87.3		82.6
Depreciation and amortization	4.3		4.5
General and administrative expenses	5.3		6.3
Pre-opening expenses	0.3		0.2
Total costs and expenses	86.5		87.4
Operating profit	13.5		12.6
Interest expense	—		0.1
Other (income) expense, net	0.1		(0.2	)
Income before income taxes	13.4		12.7
Income taxes	5.1		4.9
Net income	8.3		7.8
Other comprehensive income	—		—
Comprehensive Income	8.3	%	7.8	%

(1) As a percentage of Company net bakery-cafe sales.

(2) As a percentage of fresh dough and other product sales to franchisees.

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The following table sets forth certain information relating to the number of Company-owned and franchise-operated bakery-cafes for the periods indicated:

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Number of bakery-cafes:
Company-owned:
Beginning of period	740		662
Bakery-cafes opened	7		8
Bakery-cafes closed	(1	)	(3	)
Bakery-cafes sold to franchisees	—		(2	)
End of period	746		665
Franchise-operated:
Beginning of period	801		791
Bakery-cafes opened	15		11
Bakery-cafes closed	—		(2	)
Bakery-cafes purchased from Company	—		2
End of period	816		802
System-wide:
Beginning of period	1,541		1,453
Bakery-cafes opened	22		19
Bakery-cafes closed	(1	)	(5	)
End of period	1,562		1,467

Comparable Bakery-Cafe Sales, net

Fiscal comparable net bakery-cafe sales growth for the periods indicated were as follows:

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Company-owned	7.5	%	3.3	%
Franchise-operated	5.2	%	3.4	%
System-wide	6.3	%	3.3	%

Results of Operations

Revenues

Total revenues for the thirteen weeks ended March 27, 2012increased 18.1 percent to $498.6 million compared to $422.1 million for the thirteen weeks ended March 29, 2011. The growth in total revenues for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to the opening of 115 new bakery-cafes system-wide since March 29, 2011 and the 6.3 percentincrease in system-wide comparable net bakery-cafe sales for the thirteen weeks ended March 27, 2012. The system-wide average weekly net sales per bakery-cafe for the periods indicated were as follows:

	For the 13 Weeks Ended				Percentage
	March 27, 2012		March 29, 2011		Change
System-wide average weekly net sales	$	45,576	$	43,096	5.8	%

Net bakery-cafe sales for the thirteen weeks ended March 27, 2012increased 20.1 percent to $439.2 million compared to $365.6 million for the thirteen weeks ended March 29, 2011. The increase in net bakery-cafe sales for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to the opening of 52 new Company-owned bakery-cafes, the acquisition of 30 franchise-operated bakery-cafes since March 29, 2011, and the 7.5 percentincrease in Company-owned comparable net bakery-cafe sales for the thirteen weeks ended March 27, 2012. This 7.5 percentincrease in comparable net bakery-cafe sales was driven by approximately 2.1 percent of transaction growth and approximately 5.4 percent average check

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growth in Company-owned bakery-cafes. Average check growth, in turn, was comprised of retail price increases of approximately 3.5 percent and positive mix impact of approximately 1.9 percent in comparison to the same period in the prior year. This comparable net bakery-cafe sales increase included approximately 200 basis points of favorable year-over-year weather impact. In total, Company-owned net bakery-cafe sales as a percentage of total revenues increased to 88.1 percent for the thirteen weeks ended March 27, 2012 as compared to 86.6 percent for the same period in 2011. The increase in average weekly net sales for Company-owned bakery-cafes for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to an increase in transactions and average check growth. The average weekly net sales per Company-owned bakery-cafe and the number of operating weeks for the periods indicated were as follows:

	For the 13 Weeks Ended				Percentage
	March 27, 2012		March 29, 2011		Change
Company-owned average weekly net sales	$	45,426	$	42,532	6.8	%
Company-owned number of operating weeks	9,669		8,596		12.5	%

Franchise royalties and fees for the thirteen weeks ended March 27, 2012increased 9.9 percent to $24.8 million compared to $22.6 million for the thirteen weeks ended March 29, 2011. The components of franchise royalties and fees for the periods indicated were as follows (in thousands):

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Franchise royalties	$	24,322	$	22,152
Franchise fees	500		430
Total	$	24,822	$	22,582

The increase in franchise royalty and fee revenues for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to the opening of 63 franchise-operated bakery-cafes since March 29, 2011 and the 5.2 percentincrease in comparable franchise-operated net bakery-cafe sales for the thirteen weeks ended March 27, 2012, partially offset by the purchase of 30 franchise-operated bakery-cafes and the closure of 19 franchise-operated bakery cafes since March 29, 2011. The average weekly net sales per franchise-operated bakery-cafe and the related number of operating weeks for the periods indicated were as follows:

	For the 13 Weeks Ended				Percentage
	March 27, 2012		March 29, 2011		Change
Franchise-operated average weekly net sales	$	45,714	$	43,568	4.9	%
Franchise-operated number of operating weeks	10,500		10,303		1.9	%

As of March 27, 2012, we had 816 franchise-operated bakery-cafes open and we had received commitments to open 195 additional franchise-operated bakery-cafes. The timetables for opening these bakery-cafes are established in the respective Area Development Agreements, referred to as ADAs, with franchisees, which provide for the majority to open in the next four to five years. An ADA requires a franchisee to develop a specified number of bakery-cafes on or before specific dates. If a franchisee fails to develop bakery-cafes on the schedule set forth in the ADA, we have the right to terminate the ADA and develop Company-owned locations or develop locations through new franchisees in that market. We may exercise alternative remedies to address defaults by franchisees, including those with respect to franchisee development obligations, compliance with our operating and brand standards and other covenants included in the ADAs and franchise agreements. We may waive compliance with certain requirements included in our ADAs and franchise agreements if we determine such action is warranted under the particular circumstances.

Fresh dough and other product sales to franchisees for the thirteen weeks ended March 27, 2012increased 1.8 percent to $34.5 million compared to $33.9 million for the thirteen weeks ended March 29, 2011. The increase in fresh dough and other product sales to franchisees for the thirteen weeks ended March 27, 2012 was primarily due to the 5.2 percentincrease in franchise-operated comparable net bakery-cafe sales and opening of 63 franchise-operated bakery-cafes, partially offset by our purchase of 30 franchise-operated bakery-cafes and the closure of 19 franchise-operated bakery-cafes since March 29, 2011.

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Costs and Expenses

The cost of food and paper products includes the costs associated with our fresh dough and other product operations that sell fresh dough and other products to Company-owned bakery-cafes, as well as the cost of food and paper products supplied by third-party vendors and distributors. The costs associated with our fresh dough and other product operations that sell fresh dough and other products to the franchise-operated bakery-cafes are excluded from the cost of food and paper products and are shown separately as fresh dough and other product cost of sales to franchisees in the Consolidated Statements of Comprehensive Income.

The cost of food and paper products was $129.0 million, or 29.4 percent of net bakery-cafe sales, for the thirteen weeks ended March 27, 2012 compared to $106.2 million, or 29.1 percent of net bakery-cafe sales, for the thirteen weeks ended March 29, 2011. This increase in the cost of food and paper products as a percentage of net bakery-cafe sales for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to food cost inflation, partially offset by improved leverage from higher comparable net bakery-cafe sales. For the thirteen weeks ended March 27, 2012, there was an average of 73.0 bakery-cafes per fresh dough facility compared to an average of 67.9 for the thirteen weeks ended March 29, 2011, respectively.

Labor expense was $133.8 million, or 30.5 percent of net bakery-cafe sales, for the thirteen weeks ended March 27, 2012 compared to $114.1 million, or 31.2 percent of net bakery-cafe sales, for the thirteen weeks ended March 29, 2011. The decrease in labor expense as a percentage of net bakery-cafe sales for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily a result of improved leverage from higher comparable net bakery-cafe sales.

Occupancy cost was $31.1 million, or 7.1 percent of net bakery-cafe sales, for the thirteen weeks ended March 27, 2012 compared to $26.8 million, or 7.3 percent of net bakery-cafe sales, for the thirteen weeks ended March 29, 2011. The decrease in occupancy cost as a percentage of net bakery-cafe sales between the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily a result of improved leverage from higher comparable net bakery-cafe sales, lower average occupancy costs in new bakery-cafes, and favorably negotiated leases in existing bakery-cafes.

Other operating expenses were $57.5 million, or 13.1 percent of net bakery-cafe sales, for the thirteen weeks ended March 27, 2012 compared to $47.3 million, or 12.9 percent of net bakery-cafe sales, for the thirteen weeks ended March 29, 2011. The increase in other operating expenses as a percentage of net bakery-cafe sales for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily a result of increased marketing expenses and timing of certain other controllable expenses, partially offset by leverage from higher comparable net bakery-cafe sales.

Fresh dough and other product cost of sales to franchisees were $30.1 million, or 87.3 percent of fresh dough and other product sales to franchisees, for the thirteen weeks ended March 27, 2012, compared to $28.0 million, or 82.6 percent of fresh dough and other product sales to franchisees, for the thirteen weeks ended March 29, 2011. The increase in fresh dough and other product costs of sales to franchisees as a percentage of fresh dough and other product sales to franchisees for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily the result of the year-over-year increase in ingredient costs, partially offset by improved leverage from new bakery-cafes and higher comparable net bakery-cafe sales.

General and administrative expenses were $26.7 million, or 5.3 percent of total revenues, for the thirteen weeks ended March 27, 2012 compared to $26.7 million, or 6.3 percent of total revenues, for the thirteen weeks ended March 29, 2011. The decrease in general and administrative expenses as a percent of total revenues for the thirteen weeks ended March 27, 2012 compared to the same period in 2011 was primarily due to lower year-over-year long term compensation expenses and improved leverage from higher comparable net bakery-cafe sales.

Interest Expense

Interest expense was $0.2 million, or less than 0.1 percent of total revenues, for the thirteen weeks ended March 27, 2012 compared to $0.2 million, or 0.1 percent of total revenues, for the thirteen weeks ended March 29, 2011.

Other (income) expense, net

Other (income) expense, net was $0.4 million of expense, or 0.1 percent of total revenues, for the thirteen weeks ended March 27, 2012 compared to $0.8 million of income, or 0.2 percent of total revenues, for the thirteen weeks ended March 29, 2011. Other (income) expense, net for the thirteen weeks ended March 27, 2012 and March 29, 2011 was comprised of immaterial items.

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Income Taxes

The provision for income taxes increased to $25.5 million for the thirteen weeks ended March 27, 2012 compared to $20.8 million for the thirteen weeks ended March 29, 2011. The tax provision for the thirteen weeks ended March 27, 2012 and March 29, 2011 reflects a combined federal, state, and local effective tax rate of 38.3 percent and 38.8 percent, respectively. The decrease in the thirteen week period rate was primarily driven by a reduction in discrete items recognized in the current period as opposed to the same period in the prior fiscal year.

Liquidity and Capital Resources

Cash and cash equivalents were $221.4 million at March 27, 2012 compared with $222.6 million at December 27, 2011. This decrease was primarily a result of $48.2 million used for prepaid acquisition consideration and $30.1 million used for capital expenditures, partially offset by $72.4 million of cash generated from operations and $4.7 million of cash provided by financing activities during the thirteen weeks ended March 27, 2012. Our primary source of liquidity is cash provided by operations, although we have the ability to borrow under a credit facility, as described below. Historically, our principal requirements for cash have primarily related to the cost of food and paper products, employee labor, and our capital expenditures for the development of new Company-owned bakery-cafes, for maintaining or remodeling existing Company-owned bakery-cafes, for purchasing existing franchise-operated bakery-cafes or ownership interests in other restaurant or bakery-cafe concepts, for developing, maintaining, or remodeling fresh dough facilities, and for other capital needs such as enhancements to information systems and other infrastructure.

We had working capital of $154.4 million at March 27, 2012 compared to $114.8 million at December 27, 2011. The increase in working capital from December 27, 2011 to March 27, 2012 resulted primarily from an increase in prepaid expenses and other of $45.8 million, a decrease of $12.1 million in accrued expenses, and a decrease in accounts payable of $6.6 million, partially offset by a decrease in trade and other accounts receivable, net of $22.0 million and other immaterial items. We believe that cash provided by our operations and available borrowings under our existing credit facility will be sufficient to fund our cash requirements for the foreseeable future.

A summary of our cash flows, for the periods indicated, were as follows (in thousands):

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Cash provided by (used in):
Operating activities	$	72,384		$	42,983
Investing activities	(78,269		)	(22,599		)
Financing activities	4,684			977
Total	$	(1,201	)	$	21,361

Operating Activities

Cash flows provided by operating activities for the thirteen weeks ended March 27, 2012 resulted primarily from net income, adjusted for non-cash items such as depreciation and amortization, stock-based compensation expense, deferred income taxes, a decrease in trade and other receivables, and an increase in other long-term liabilities, partially offset by excess tax benefit from exercise of stock options, and a decrease in both accrued expenses and accounts payable. Cash flows provided by operating activities for the thirteen weeks ended March 29, 2011 primarily resulted from net income, adjusted for non-cash items such as depreciation and amortization, deferred income taxes, stock-based compensation expense, and an increase in prepaid expenses and other, partially offset by a decrease in both accrued expenses and trade and other accounts receivable, net.

Investing Activities

Investing activities for the thirteen weeks ended March 27, 2012 included additions to property and equipment of $30.1 million and prepaid acquisition consideration of $48.2 million. Investing activities for the thirteen weeks ended March 29, 2011 included additions to property and equipment of $22.7 million, partially offset by $0.1 million received from the sale of two bakery-cafes.

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Capital Expenditures

Capital expenditures are the largest ongoing component of our investing activities and include expenditures for new bakery-cafes and fresh dough facilities, improvements to existing bakery-cafes and fresh dough facilities, and other capital needs. A summary of capital expenditures for the periods indicated consisted of the following (in thousands):

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
New bakery-cafe and fresh dough facilities	$	16,664	$	13,336
Bakery-cafe and fresh dough facility improvements	8,329		6,397
Other capital needs	5,126		2,981
Total	$	30,119	$	22,714

Our capital requirements, including development costs related to the opening or acquisition of additional bakery-cafes and fresh dough facilities and maintenance and remodel expenditures, have been and will continue to be significant. Our future capital requirements and the adequacy of available funds will depend on many factors, including the pace of expansion, real estate markets, site locations, and the nature of arrangements negotiated with landlords. We believe that cash provided by our operations and available borrowings under our existing credit facility will be sufficient to fund our capital requirements in both our short-term and long-term future. We currently anticipate 115 to 120 system-wide bakery-cafe openings in the fiscal year ended December 25, 2012, or fiscal 2012.

Business Combinations

We used approximately $48.2 million of cash flows for prepaid acquisition consideration in the thirteen weeks ended March 27, 2012. On March 28, 2012, the first day of the second quarter of fiscal 2012, we obtained control of 16 bakery-cafes from a Raleigh-Durham, North Carolina franchisee. Refer to Note 2 for further information related to business combinations.

Financing Activities

Financing activities for the thirteen weeks ended March 27, 2012 included $2.5 million received from the exercise of employee stock options, $1.9 million received from an excess tax benefit from exercise of stock options, and $0.6 million received from the issuance of common stock, partially offset by $0.3 million used to repurchase shares of our Class A common stock. Financing activities for the thirteen weeks ended March 29, 2011 included $0.5 million received from the exercise of employee stock options, $0.6 million received from an excess tax benefit from exercise of stock options, and $0.5 million received from the issuance of common stock, partially offset by $0.7 million used to repurchase shares of our Class A common stock.

Share Repurchases

On November 17, 2009, our Board of Directors approved a three year share repurchase authorization of up to $600.0 million of our Class A common stock, pursuant to which share repurchases may be effected from time to time on the open market or in privately negotiated transactions and which may be made under a Rule 10b5-1 plan. Repurchased shares may be retired immediately and will resume the status of authorized but unissued shares or they may be held by us as treasury stock. The repurchase authorization may be modified, suspended, or discontinued by our Board of Directors at any time. During each of the thirteen week periods ended March 27, 2012 and March 29, 2011, we did not repurchase any shares under the share repurchase authorization. As of March 27, 2012, we had repurchased a total of 2,810,069 shares of our Class A common stock under the share repurchase authorization at a weighted-average price of $86.33 per share for an aggregate purchase price of approximately $242.6 million. As of March 27, 2012, we had approximately $357.4 million available under the existing $600.0 million repurchase authorization.

We have historically repurchased shares of our Class A common stock through a share repurchase authorization approved by our Board of Directors from participants of the Panera Bread 1992 Stock Incentive Plan and the Panera Bread 2006 Stock Incentive Plan, or collectively, the Plans. Repurchased shares are netted and surrendered as payment for applicable tax withholding on the vesting of participants’ restricted stock. During the thirteen weeks ended March 27, 2012, we repurchased 1,601 shares of Class A common stock surrendered by participants of the Plans at a weighted-average price of $158.54 per share for an aggregate purchase price of $0.3 million pursuant to the terms of the Plans and the applicable award agreements. These share repurchases were not made pursuant to publicly announced share repurchase authorizations.

Credit Facility

On March 7, 2008, we, and certain of our direct and indirect subsidiaries, as guarantors, entered into an amended and restated credit agreement, referred to as the Amended and Restated Credit Agreement, with Bank of America, N.A., and other lenders party thereto to amend and restate in its entirety our Credit Agreement, dated as of November 27, 2007, by and among us, Bank of

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America, N.A., and the lenders party thereto, referred to as the Original Credit Agreement. Pursuant to our request under the terms of the Original Credit Agreement, the Amended and Restated Credit Agreement increased the size of our secured revolving credit facility from $75.0 million to $250.0 million. We may select interest rates equal to (a) the Base Rate (which is defined as the higher of Bank of America prime rate and the Federal Funds Rate plus 0.50 percent), or (b) LIBOR plus an Applicable Rate, ranging from 0.75 percent to 1.50 percent, based on our Consolidated Leverage Ratio, as each term is defined in the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement allows us from time to time to request that the credit facility be further increased by an amount not to exceed, in the aggregate, $150.0 million, subject to receipt of lender commitments and other conditions precedent. The Amended and Restated Credit Agreement contains financial covenants that, among other things, require the maintenance of certain leverage and fixed charges coverage ratios. The credit facility, which is secured by the capital stock of our present and future material subsidiaries, will become due on March 7, 2013, subject to acceleration upon certain specified events of defaults, including breaches of representations or covenants, failure to pay other material indebtedness or a change of control of our Company, as defined in the Amended and Restated Credit Agreement. The proceeds from the credit facility will be used for general corporate purposes, including working capital, capital expenditures, and permitted acquisitions and share repurchases. As of March 27, 2012 and December 27, 2011, we had no balance outstanding under the Amended and Restated Credit Agreement. As of March 27, 2012, we were in compliance with all covenants under the Amended and Restated Credit Agreement.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon the consolidated financial statements and notes to the consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the consolidated financial statements requires us to make estimates, judgments and assumptions, which we believe to be reasonable, based on the information available. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Variances in the estimates or assumptions used could yield materially different accounting results. On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and resulting estimates to make adjustments we consider appropriate under the facts and circumstances.

We have chosen accounting policies we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a consistent manner. As described in Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2011, we consider our policies on accounting for revenue recognition, valuation of goodwill, self-insurance, income taxes, lease obligations, and stock-based compensation to be the most critical in the preparation of the consolidated financial statements because they involve the most difficult, subjective, or complex judgments about the effect of matters that are inherently uncertain. There have been no material changes to our application of critical accounting policies and significant judgments and estimates since December 27, 2011.

Contractual Obligations and Other Commitments

We currently anticipate 115 to 120 system-wide bakery-cafe openings in fiscal 2012. We expect to fund our capital expenditures principally through internally generated cash flow and available borrowings under our existing credit facility, if needed.

In addition to our planned capital expenditure requirements, we have certain other contractual and committed cash obligations. Our contractual cash obligations consist of noncancelable operating leases for our bakery-cafes, fresh dough facilities and trucks, and support centers; purchase obligations primarily for certain commodities; and uncertain tax positions. Lease terms for our trucks are generally for six to eight years. Lease terms for our bakery-cafes, fresh dough facilities, and support centers are generally for ten years with renewal options at most locations and generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs. Many bakery-cafe leases provide for contingent rental (i.e. percentage rent) payments based on net sales in excess of specified amounts or changes in external indices. Certain of our lease agreements provide for scheduled rent increases during the lease terms or for rental payments commencing at a date other than the date of initial occupancy.

Off-Balance Sheet Arrangements

As of March 27, 2012, we guaranteed operating leases of 24 franchisee or affiliate locations, which we account for in accordance with the accounting standard for guarantees. These leases have terms expiring on various dates from April 30, 2012 to December 31, 2023 and a potential amount of future rental payments of approximately $23.5 million as of March 27, 2012. Our obligation under these leases will generally continue to decrease over time as these operating leases expire. We have not recorded a liability for certain of these guarantees as they arose prior to the implementation of the accounting standard for guarantees and, unless modified, are exempt from its requirements. We have not recorded a liability for those guarantees issued after the effective date of the accounting requirements because the fair value of each such lease guarantee was determined by us to be insignificant based on

20

analysis of the facts and circumstances of each such lease and each such franchisee’s performance, and we did not believe it was probable we would be required to perform under any guarantees at the time the guarantees were issued. We have not had to make any payments related to any of these guaranteed leases. The applicable franchisees or affiliates continue to have primary liability for these operating leases.

New Accounting Standards

In September 2011, the FASB updated its guidance on the annual testing of goodwill for impairment to allow companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The updated guidance applies to goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this updated guidance did not have a material impact on our consolidated financial statements.

In June 2011 and December 2011, the FASB updated its guidance regarding comprehensive income to require companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This updated guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. This updated guidance applies to fiscal years beginning after December 15, 2011. The adoption of this updated guidance did not have a material impact on our consolidated financial statement presentation.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the quantitative and qualitative information about market risk since the end of our most recent fiscal year. For further information, see Item 7A. of our Annual Report on Form 10-K for the fiscal year ended December 27, 2011.

Item 4. Controls and Procedures

Our management, with the participation of our Co-Chief Executive Officers and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 27, 2012. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 27, 2012, our Co-Chief Executive Officers and Interim Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the first fiscal quarter ended March 27, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

21

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of our subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of Panera Bread Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s Business and Professions Code. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court might find just and proper. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding this purported class action lawsuit and the purported class action lawsuit filed by David Carter, which is described in the subsequent paragraph. Under the terms of the Memorandum of Agreement, the parties have agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The aggregate settlement amount of $5.0 million is included in accrued expenses in our Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of our subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of our franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint seeks, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court might find just and proper. This matter was consolidated with the lawsuit described in the immediately preceding paragraph and is expected to be resolved under the Memorandum of Agreement described above.

On December 16, 2010, a purported class action lawsuit was filed against Panera Bread Company and one of our subsidiaries by Denarius Lewis, Caroll Ruiz, and Corey Weiner, former employees of a subsidiary of Panera Bread Company. The lawsuit was filed in the United States District Court for the Middle District of Florida. The complaint alleges, among other things, violations of the Fair Labor Standards Act. The complaint seeks, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court might find just and proper. On February 29, 2012, the parties agreed to settle this matter for an amount up to $1.5 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The agreement includes no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The settlement amount of $1.5 million is included in accrued expenses in the our Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

In addition, we are subject to other routine legal proceedings, claims and litigation in the ordinary course of business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. We do not, however, currently expect that the costs to resolve these matters individually or in the aggregate will have a material adverse effect on our consolidated financial statements.

Item 1A. Risk Factors

Our business is subject to a number of risks, some of which are beyond our control. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. - “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2011, as filed with the SEC on February 21, 2012 and amended by Form 10-K/A, filed with the SEC on March 20, 2012, that could have a material adverse effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. As of March 27, 2012, there have been no material changes to the risk factors disclosed in our most recent Annual Report on Form 10-K, although we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or operating results.

22

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the thirteen weeks ended March 27, 2012, we repurchased Class A common stock as follows:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
December 28, 2011 - January 24, 2012	—		$	—	—	$	357,414,869
January 25, 2012 - February 28, 2012	78	(1)	153.48		—	357,414,869
February 29, 2012 - March 27, 2012	1,523	(1)	158.80		—	357,414,869
Total	1,601		$	158.54	—	$	357,414,869

(1) Represents Class A common stock surrendered by participants under the Panera Bread 1992 Stock Incentive Plan and the Panera Bread 2006 Stock Incentive Plan, as amended, as payment of applicable tax withholding on the vesting of restricted stock. Shares so surrendered by the participants are repurchased by us pursuant to the terms of those plans and the applicable award agreements and not pursuant to publicly announced share repurchase authorizations.

23

Item 6. Exhibits

Exhibit Number	Description
31.1	Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Principal Executive Officer and Principal Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed”.

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Panera Bread Company
		(Registrant)
Dated:	April 25, 2012	By:	/s/ WILLIAM W. MORETON
			William W. Moreton
			President and Co-Chief Executive Officer
			(on behalf of registrant and as principal executive officer)
Dated:	April 25, 2012	By:	/s/ RONALD M. SHAICH
			Ronald M. Shaich
			Chairman and Co-Chief Executive Officer
			(on behalf of registrant and as principal executive officer)
Dated:	April 25, 2012	By:	/s/ THOMAS P. KELLY
			Thomas P. Kelly
			Interim Chief Financial Officer
			(principal financial officer)
Dated:	April 25, 2012	By:	/s/ MARK D. WOOLDRIDGE
			Mark D. Wooldridge
			Vice President of Accounting, Associate Controller, and Chief Accounting Officer

25

EXHIBIT INDEX

Exhibit Number	Description
31.1	Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Principal Executive Officer and Principal Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed”.

26

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, William W. Moreton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 27, 2012 of Panera Bread Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	April 25, 2012	/s/ WILLIAM W. MORETON
		William W. Moreton
		President and Co-Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Ronald M. Shaich, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 27, 2012 of Panera Bread Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	April 25, 2012	/s/ RONALD M. SHAICH
		Ronald M. Shaich
		Chairman and Co-Chief Executive Officer

EX-31.3

EXHIBIT 31.3

CERTIFICATION

I, Thomas P. Kelly, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 27, 2012 of Panera Bread Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	April 25, 2012	/s/ THOMAS P. KELLY
		Thomas P. Kelly
		Interim Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Panera Bread Company on Form 10-Q for the quarterly period ended March 27, 2012 (the “Report”), as filed with the Securities and Exchange Commission, we, William W. Moreton, President and Co-Chief Executive Officer, Ronald M. Shaich, Chairman and Co-Chief Executive Officer, and Thomas P. Kelly, Interim Chief Financial Officer, certify, to the best of our knowledge and belief, pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2 The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of Panera Bread Company.

Dated:	April 25, 2012	/s/ WILLIAM W. MORETON
		William W. Moreton
		President and Co-Chief Executive Officer

Dated:	April 25, 2012	/s/ RONALD M. SHAICH
		Ronald M. Shaich
		Chairman and Co-Chief Executive Officer

Dated:	April 25, 2012	/s/ THOMAS P. KELLY
		Thomas P. Kelly
		Interim Chief Financial Officer

XML

Business Segment Information Business Segment Information (Detail Textuals)	3 Months Ended
	Mar. 27, 2012 segments
Segment Reporting Information [Line Items]
Segment Reporting Information Number Of Business Segments (in segments)	3
Maximum Delivered Cost On Fresh Dough Based On Retail Value Of End Product (as a percent)	27.00%

XML

Business Combinations (Details Textuals) (USD $) In Millions, unless otherwise specified				18 Months Ended
	Feb. 09, 2011 Texas Divestiture [Member] bakery-cafes	Mar. 28, 2012 North Carolina Franchisee Acquisition [Member] bakery-cafes	Jul. 26, 2011 Indiana Franchisee Acquisition [Member] bakery-cafes	Oct. 19, 2012 Milwaukee Franchisee Acquisition [Member] months bakery-cafes	Apr. 19, 2011 Milwaukee Franchisee Acquisition [Member] bakery-cafes
Business Combination [Line Items]
Number of bakery cafe (in stores)	2	16	5		25
Purchase price of assets and liabilities		$ 48.2	$ 5.1		$ 41.9
Payment of purchase price and transaction cost			4.6		39.8
Amount retained by the company for hold backs			0.5		2.1
Expiration Period of Holdbacks (in months)				18
Purchase price allocation estimated fair value of inventories			0.1		0.4
Purchase price allocation estimated fair value of property and equipment			1.3		9.3
Purchase price allocation estimated fair value of intangible assets			1.3		23.3
Purchase price allocation estimated fair value of liabilities			0.7		1.7
Purchase price allocation estimated fair value of goodwill			3.1		10.6
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds	$ 0.1

XML

Inventories

3 Months Ended

Mar. 27, 2012

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	March 27, 2012		December 27, 2011
Food:
Fresh dough facilities:
Raw materials	$	2,906	$	2,998
Finished goods	431		261
Bakery-cafes:
Raw materials	10,109		11,048
Paper goods	2,587		2,709
Total	$	16,033	$	17,016

XML

Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 27, 2012	Dec. 27, 2011
Compensation and related employment taxes	$ 46,918	$ 41,491
Unredeemed gift cards	45,080	58,321
Insurance	25,244	23,629
Taxes, other than income tax	18,643	18,512
Accrued Capital Expenditure Current	14,786	19,116
Accrued Advertising, Current	8,023	5,334
Accrued Rent, Current	6,693	5,958
Loyalty program	6,644	5,916
Fresh dough and other product operations	5,264	7,101
Litigation settlement (Note 9)	6,500	5,000
Utilities	3,763	4,170
Accrual For Deferred purchase price Current	2,567	2,565
Deferred Revenue, Current	2,286	2,236
Other Accrued Liabilities, Current	17,985	23,101
Accrued expenses	$ 210,396	$ 222,450

XML

Goodwill (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2012
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 108,071
Goodwill, Translation and Purchase Accounting Adjustments	48
Goodwill, Ending Balance	108,119
Company bakery cafe operations [Member]
Goodwill [Roll Forward]
Goodwill, Beginning Balance	104,442
Goodwill, Translation and Purchase Accounting Adjustments	48
Goodwill, Ending Balance	104,490
Franchise operations [Member]
Goodwill [Roll Forward]
Goodwill, Beginning Balance	1,934
Goodwill, Translation and Purchase Accounting Adjustments	0
Goodwill, Ending Balance	1,934
Fresh dough and other product operations [Member]
Goodwill [Roll Forward]
Goodwill, Beginning Balance	1,695
Goodwill, Translation and Purchase Accounting Adjustments	0
Goodwill, Ending Balance	$ 1,695

XML

Credit Facility (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2012
Debt Disclosure [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	$ 250.0
Commitment fees incurred	0.1
Accrued interest on Secured revolving credit facility	$ 0.1

XML

Commitments and Contingencies (Detail Textuals) (USD $) In Millions, unless otherwise specified	Feb. 29, 2012 Class action lawsuits [Member]	Nov. 17, 2011 Class action lawsuits [Member]	Mar. 27, 2012 Guarantee of Indebtedness of Others [Member] franchisee
Loss Contingencies [Line Items]
Franchisees guaranteed under operating leases (in franchisees)			24
Guaranteed Maximum Exposure			$ 23.5
Settlement fund	$ 1.5	$ 5.0

XML

Fair Value Measurements

3 Months Ended

Mar. 27, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company’s $18.3 million and $27.5 million in cash equivalents at March 27, 2012 and December 27, 2011, respectively, were carried at fair value in the Consolidated Balance Sheets based on quoted market prices for identical securities (Level 1 inputs).

XML

Business Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2012	Mar. 29, 2011	Dec. 27, 2011
Revenues:
Total revenues	$ 498,579	$ 422,100
Segment profit:
Total segment profit	114,934	98,142
Depreciation and amortization	21,321	19,094
General and Administrative Expense	26,667	26,671
Pre-opening expenses	1,611	978
Interest expense	210	225
Other (income) expense, net	438	(804)
Income before income taxes	66,708	53,553
Capital expenditures:
Capital Expenditures	30,119	22,714
Segment Assets
Trade accounts receivable, net	23,410		30,700
Property and equipment, net	499,904		492,022
Deposits and other	6,819		6,841
Total assets	1,054,612		1,027,322
Company bakery cafe operations [Member]
Revenues:
Total revenues	439,215	365,579
Segment profit:
Total segment profit	87,736	71,220
Depreciation and amortization	18,500	16,244
Capital expenditures:
Capital Expenditures	24,921	21,890
Segment Assets
Total assets	720,096		682,246
Franchise operations [Member]
Revenues:
Total revenues	24,822	22,582
Segment profit:
Total segment profit	22,801	21,007
Segment Assets
Total assets	6,374		7,502
Fresh dough and other product operations [Member]
Revenues:
Total revenues	71,343	66,025
Segment profit:
Total segment profit	4,397	5,915
Depreciation and amortization	1,649	1,744
Capital expenditures:
Capital Expenditures	1,917	217
Segment Assets
Total assets	48,212		47,710
Operating Segments [Member]
Segment Assets
Total assets	774,682		737,458
Intercompany sales eliminations [Member]
Revenues:
Total revenues	(36,801)	(32,086)
Corporate Elimination [Member]
Segment profit:
Depreciation and amortization	1,172	1,106
Capital expenditures:
Capital Expenditures	3,281	607
Unallocated Amount to Segment [Member]
Segment profit:
General and Administrative Expense	24,646	25,096
Segment Assets
Trade accounts receivable, net	2,362		3,359
Property and equipment, net	23,159		21,565
Deposits and other	4,186		4,234
Total other assets	$ 250,223		$ 260,706

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Consolidated Balance Sheets (unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 27, 2012	Dec. 27, 2011
Current assets:
Cash and cash equivalents	$ 221,439	$ 222,640
Trade accounts receivable, net	23,410	30,700
Other accounts receivable	9,292	24,009
Inventories	16,033	17,016
Prepaid expenses and other	77,065	31,228
Deferred income taxes	26,856	27,526
Total current assets	374,095	353,119
Property and equipment, net	499,904	492,022
Other assets:
Goodwill	108,119	108,071
Other intangible assets, net	65,675	67,269
Deposits and other	6,819	6,841
Total other assets	180,613	182,181
Total assets	1,054,612	1,027,322
Current liabilities:
Accounts payable	9,281	15,884
Accrued expenses	210,396	222,450
Total current liabilities	219,677	238,334
Deferred rent	54,813	54,055
Deferred income taxes	35,101	34,345
Other long-term liabilities	41,703	45,512
Total liabilities	351,294	372,246
Common stock, $.0001 par value per share:
Treasury stock, carried at cost; 2,050,277 shares at March 27, 2012 and 2,048,338 shares at December 27, 2011	(175,848)	(175,595)
Preferred Stock, Value, Outstanding	0	0
Additional paid-in capital	157,432	150,093
Accumulated other comprehensive income	280	308
Retained earnings	721,451	680,267
Total stockholders' equity	703,318	655,076
Total liabilities and stockholders' equity	1,054,612	1,027,322
Common Stock [Member] | Common Stock Class A [Member]
Common stock, $.0001 par value per share:
Common stock	3	3
Common Stock [Member] | Common Stock Class B [Member]
Common stock, $.0001 par value per share:
Common stock	$ 0	$ 0

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 27, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, which consist of the accounts of Panera Bread Company and its wholly owned direct and indirect subsidiaries (collectively, the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the fiscal year ended December 27, 2011. These unaudited consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2011, as filed with the SEC on February 21, 2012 and amended by Form 10-K/A, filed with the SEC on March 20, 2012. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 27, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP contained herein.

The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of its financial position and comprehensive income for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year.

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB") updated its guidance on the annual testing of goodwill for impairment to allow companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards.  The updated guidance applies to goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statements.

In June 2011 and December 2011, the FASB updated its guidance regarding comprehensive income to require companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This updated guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. This updated guidance applies to fiscal years beginning after December 15, 2011. The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statement presentation.

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Earnings Per Share (Details Textuals) (Stock Compensation Plan [Member]) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2012
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from computation of earning per share	0.1

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Business Segment Information (Tables)

3 Months Ended

Mar. 27, 2012

Segment Reporting [Abstract]

Business Segment Information

Information related to the Company’s three business segments follows (in thousands):

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Revenues:
Company bakery-cafe operations	$	439,215		$	365,579
Franchise operations	24,822			22,582
Fresh dough and other product operations	71,343			66,025
Intercompany sales eliminations	(36,801		)	(32,086		)
Total revenues	$	498,579		$	422,100
Segment profit:
Company bakery-cafe operations	$	87,736		$	71,220
Franchise operations	22,801			21,007
Fresh dough and other product operations	4,397			5,915
Total segment profit	$	114,934		$	98,142
Depreciation and amortization	$	21,321		$	19,094
Unallocated general and administrative expenses	24,646			25,096
Pre-opening expenses	1,611			978
Interest expense	210			225
Other (income) expense, net	438			(804		)
Income before income taxes	$	66,708		$	53,553
Depreciation and amortization:
Company bakery-cafe operations	$	18,500		$	16,244
Fresh dough and other product operations	1,649			1,744
Corporate administration	1,172			1,106
Total depreciation and amortization	$	21,321		$	19,094
Capital expenditures:
Company bakery-cafe operations	$	24,921		$	21,890
Fresh dough and other product operations	1,917			217
Corporate administration	3,281			607
Total capital expenditures	$	30,119		$	22,714

	March 27, 2012		December 27, 2011
Segment assets:
Company bakery-cafe operations	$	720,096	$	682,246
Franchise operations	6,374		7,502
Fresh dough and other product operations	48,212		47,710
Total segment assets	$	774,682	$	737,458
Unallocated trade and other accounts receivable	2,362		3,359
Unallocated property and equipment	23,159		21,565
Unallocated deposits and other	4,186		4,234
Other unallocated assets	250,223		260,706
Total assets	$	1,054,612	$	1,027,322

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Subsequent Events (Details) (North Carolina Franchisee Acquisition [Member], USD $) In Millions, unless otherwise specified	Mar. 28, 2012 bakery-cafes
North Carolina Franchisee Acquisition [Member]
Subsequent Event [Line Items]
Number of bakery cafe	16
Business Acquisition, Cost of Acquired Entity, Purchase Price	$ 48.2

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Business Combinations and Divestitures (Details) (Milwaukee Franchisee Acquisition [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 29, 2011
Milwaukee Franchisee Acquisition [Member]
Schedule of supplemental pro forma information
Bakery-cafe sales, net	$ 378,164
Net income	$ 33,023

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Business Combinations and Divestitures

3 Months Ended

Mar. 27, 2012

Business Combinations [Abstract]

Business Combinations and Divestitures

Business Combinations and Divestitures

North Carolina Acquisition

On March 28, 2012, the first day of the second quarter of fiscal 2012, the Company obtained control of 16 bakery-cafes and the related area development rights from a Raleigh-Durham, North Carolina franchisee for a purchase price of approximately $48.2 million, which the Company paid in cash on March 27, 2012. The Company purchased substantially all of the assets and certain liabilities of the bakery-cafes. As of March 27, 2012, the cash paid for the acquisition was classified within prepaid expenses and other within the Consolidated Balance Sheets. The Company's operating results for the reported periods were not impacted by this acquisition as it was completed subsequent to March 27, 2012. Refer to Note 11 for information related to this subsequent event.

Indiana Franchisee Acquisition

On July 26, 2011, the Company purchased substantially all the assets and certain liabilities of five Paradise Bakery & Café (“Paradise”) bakery-cafes and the related area development rights from an Indiana franchisee for a purchase price of approximately $5.1 million. Approximately $4.6 million of the purchase price was paid on July 26, 2011, with $0.5 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on July 26, 2013, the second anniversary of the transaction closing date, with any remaining holdback amounts reverting to the prior franchisee. As a result of the acquisition, the Company gained control of the five bakery-cafes and further expanded Company-owned operations into Indiana. The Consolidated Statements of Comprehensive Income include the results of operations from these five bakery-cafes from the date of their acquisition. The pro-forma impact of the acquisition on prior periods is not presented, as the impact was not material to reported results.

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.1 million to inventories, $1.3 million to property and equipment, $1.3 million to intangible assets, which represent the fair value of re-acquired territory rights, $0.7 million to liabilities, and $3.1 million to goodwill. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafes and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is anticipated to be tax deductible and is included in the Company Bakery-Cafe Operations segment.

Milwaukee Franchisee Acquisition

On April 19, 2011 the Company purchased substantially all the assets and certain liabilities of 25 bakery-cafes and the related area development rights from a Milwaukee franchisee for a purchase price of approximately $41.9 million. Approximately $39.8 million of the purchase price was paid on April 19, 2011, with $2.1 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on the 18 month anniversary of the transaction closing date, October 19, 2012, with any remaining holdback amounts reverting to the prior franchisee. As a result of the acquisition, the Company gained control of the 25 bakery-cafes and expanded Company-owned operations into Wisconsin. The Consolidated Statements of Comprehensive Income include the results of operations from the operating bakery-cafes from the date of the acquisition.

The following supplemental pro forma information is presented for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on December 29, 2010, nor are they indicative of any future results (in thousands):

	Pro Forma for the 13 Weeks Ended
	March 29, 2011
Bakery-cafe sales, net	$	378,164
Net income	33,023

The pro forma amounts included in the table above reflect the application of the Company’s accounting policies and adjustment of the results of the Milwaukee bakery-cafes to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from December 29, 2010, together with the consequential tax impacts.    

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.4 million to inventories, $9.3 million to property and equipment, $23.3 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable lease agreements, $1.7 million to liabilities, and $10.6 million to goodwill. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafes and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is anticipated to be tax deductible and is included in the Company Bakery-Cafe Operations segment.

Texas Divestiture

On February 9, 2011, the Company sold substantially all of the assets of two Paradise bakery-cafes to an existing Texas franchisee for a sales price of approximately $0.1 million, resulting in a nominal gain, which is classified in other (income) expense, net in the Consolidated Statements of Comprehensive Income.

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Consolidated Balance Sheets (Parenthetical) (unaudited) (USD $)	Mar. 27, 2012	Dec. 27, 2011
Common stock, $.0001 par value per share:
Treasury stock, shares	2,050,277	2,048,338
Common Stock Class A [Member]
Common stock, $.0001 par value per share:
Common stock, par value	0.0001	0.0001
Common stock, shares authorized	112,500,000	112,500,000
Common stock, shares issued	30,354,078	30,330,759
Common stock, shares outstanding	28,303,801	28,265,672
Common Stock Class B [Member]
Common stock, $.0001 par value per share:
Common stock, par value	0.0001	0.0001
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	1,383,687	1,383,687
Common stock, shares outstanding	1,383,687	1,383,687

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 27, 2012

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, which consist of the accounts of Panera Bread Company and its wholly owned direct and indirect subsidiaries (collectively, the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the fiscal year ended December 27, 2011. These unaudited consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2011, as filed with the SEC on February 21, 2012 and amended by Form 10-K/A, filed with the SEC on March 20, 2012. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 27, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP contained herein.

The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of its financial position and comprehensive income for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year.

Recent Accounting Pronouncements [Policy Text block]

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB") updated its guidance on the annual testing of goodwill for impairment to allow companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards.  The updated guidance applies to goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statements.

In June 2011 and December 2011, the FASB updated its guidance regarding comprehensive income to require companies to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This updated guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity. This updated guidance applies to fiscal years beginning after December 15, 2011. The adoption of this updated guidance did not have a material impact on the Company's consolidated financial statement presentation.

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Document and Entity Information	3 Months Ended
	Mar. 27, 2012	Apr. 24, 2012 Common Stock Class A [Member]	Apr. 24, 2012 Common Stock Class B [Member]
Entity Registrant Name	Panera Bread Company
Entity Central Index Key	0000724606
Document Type	10-Q
Document Period End Date	Mar. 27, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-25
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		28,349,934	1,383,687

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Business Combinations and Divestitures (Tables) (Milwaukee Franchise Acquisition [Member])

3 Months Ended

Mar. 27, 2012

Milwaukee Franchise Acquisition [Member]

Business Acquisition [Line Items]

Schedule of supplemental pro forma information

The following supplemental pro forma information is presented for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on December 29, 2010, nor are they indicative of any future results (in thousands):

	Pro Forma for the 13 Weeks Ended
	March 29, 2011
Bakery-cafe sales, net	$	378,164
Net income	33,023

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Consolidated Statements of Operations (unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 27, 2012	Mar. 29, 2011
Revenues:
Bakery-cafe sales, net	$ 439,215	$ 365,579
Franchise royalties and fees	24,822	22,582
Fresh dough and other product sales to franchisees	34,542	33,939
Total revenues	498,579	422,100
Bakery-cafe expenses:
Cost of food and paper products	129,028	106,209
Labor	133,827	114,050
Occupancy	31,108	26,773
Other operating expenses	57,516	47,327
Total bakery-cafe expenses	351,479	294,359
Fresh dough and other product cost of sales to franchisees	30,145	28,024
Depreciation and amortization	21,321	19,094
General and administrative expenses	26,667	26,671
Pre-opening expenses	1,611	978
Total costs and expenses	431,223	369,126
Operating profit	67,356	52,974
Interest expense	210	225
Other (income) expense, net	438	(804)
Income before income taxes	66,708	53,553
Income taxes	25,524	20,779
Net income	41,184	32,774
Net Income (Loss) Attributable to Parent	41,184	32,774
Earnings per common share attributable to Panera Bread Company:
Basic (in dollars per share)	$ 1.41	$ 1.10
Diluted (in dollars per share)	$ 1.40	$ 1.09
Weighted average shares of common and common equivalent shares outstanding:
Weighted average number of shares outstanding - basic (in shares)	29,183	29,845
Weighted average number of shares outstanding - diluted (in shares)	29,458	30,160
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	(28)	3
Other Comprehensive Income (Loss), Net of Tax	(28)	3
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ 41,156	$ 32,777

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Credit Facility

3 Months Ended

Mar. 27, 2012

Debt Disclosure [Abstract]

Line of Credit Facility

Credit Facility

The Company and certain of its direct and indirect subsidiaries, as guarantors, are parties to an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with Bank of America, N.A. and other lenders party thereto, which provides for a secured revolving credit facility of $250.0 million to be used for general corporate purposes, including working capital, capital expenditures, permitted acquisitions, and share repurchases. The Amended and Restated Credit Agreement, which is collateralized by the capital stock of the Company’s present and future material subsidiaries, will become due on March 7, 2013, subject to acceleration upon certain specified events of default.

As of March 27, 2012 and December 27, 2011, the Company had no balance outstanding under the Amended and Restated Credit Agreement. The Company incurred $0.1 million of commitment fees for each of the thirteen weeks ended March 27, 2012 and March 29, 2011, and accrued interest related to the commitment fees was $0.1 million at March 27, 2012 and December 27, 2011, respectively. As of March 27, 2012, the Company was in compliance with all covenants under the Amended and Restated Credit Agreement.

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Accrued Expenses

3 Months Ended

Mar. 27, 2012

Payables and Accruals [Abstract]

Accrued expenses

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	March 27, 2012		December 27, 2011
Compensation and related employment taxes	$	46,918	$	41,491
Unredeemed gift cards, net	45,080		58,321
Insurance	25,244		23,629
Taxes, other than income tax	18,643		18,512
Capital expenditures	14,786		19,116
Advertising	8,023		5,334
Rent	6,693		5,958
Loyalty program	6,644		5,916
Litigation settlements (Note 8)	6,500		5,000
Fresh dough and other product operations	5,264		7,101
Utilities	3,763		4,170
Deferred purchase price	2,567		2,565
Deferred revenue	2,286		2,236
Other	17,985		23,101
Total	$	210,396	$	222,450

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Earnings Per Share (Tables)

3 Months Ended

Mar. 27, 2012

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except for per share data):

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Amounts used for basic and diluted per share calculations:
Net income	$	41,184	$	32,774
Weighted average number of shares outstanding — basic	29,183		29,845
Effect of dilutive stock-based employee compensation awards	275		315
Weighted average number of shares outstanding — diluted	29,458		30,160
Earnings per common share:
Basic	$	1.41	$	1.10
Diluted	$	1.40	$	1.09

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Inventories (Tables)

3 Months Ended

Mar. 27, 2012

Inventory Disclosure [Abstract]

Inventories

	March 27, 2012		December 27, 2011
Food:
Fresh dough facilities:
Raw materials	$	2,906	$	2,998
Finished goods	431		261
Bakery-cafes:
Raw materials	10,109		11,048
Paper goods	2,587		2,709
Total	$	16,033	$	17,016

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Earnings Per Share

3 Months Ended

Mar. 27, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except for per share data):

	For the 13 Weeks Ended
	March 27, 2012		March 29, 2011
Amounts used for basic and diluted per share calculations:
Net income	$	41,184	$	32,774
Weighted average number of shares outstanding — basic	29,183		29,845
Effect of dilutive stock-based employee compensation awards	275		315
Weighted average number of shares outstanding — diluted	29,458		30,160
Earnings per common share:
Basic	$	1.41	$	1.10
Diluted	$	1.40	$	1.09

For the thirteen weeks ended March 27, 2012 and March 29, 2011, weighted-average outstanding stock options, restricted stock, and stock-settled appreciation rights of less than 0.1 million shares were excluded in calculating diluted earnings per share as the exercise price exceeded fair market value and the inclusion of such shares would have been antidilutive.

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Commitments and Contingencies

3 Months Ended

Mar. 27, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Obligations

As of March 27, 2012, the Company guaranteed operating leases of 24 franchisee or affiliate locations, which the Company accounted for in accordance with the accounting standard for guarantees. These leases have terms expiring on various dates from April 30, 2012 to December 31, 2023 and a potential amount of future rental payments of approximately $23.5 million as of March 27, 2012. The obligations under these leases will generally continue to decrease over time as these operating leases expire. The Company has not recorded a liability for certain of these guarantees as they arose prior to the implementation of the accounting standard for guarantees and, unless modified, are exempt from its requirements. The Company has not recorded a liability for those guarantees issued after the effective date of this accounting standard because the fair value of each such lease guarantee was determined by the Company to be insignificant based on an analysis of the facts and circumstances of each such lease and each such franchisee’s performance, and the Company did not believe it was probable it would be required to perform under any guarantees at the time the guarantees were issued. The Company has not had to make any payments related to any of these guaranteed leases. The applicable franchisees or affiliates have primary liability for these operating leases.

Legal Proceedings

On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of Panera Bread Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s Business and Professions. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court might find just and proper. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding this purported class action lawsuit and the purported class action lawsuit filed by David Carter, which is described in the subsequent paragraph. Under the terms of the Memorandum of Agreement, the parties have agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The aggregate settlement amount of $5.0 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of the Company's franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint seeks, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court might find just and proper. This matter was consolidated with the lawsuit described in the immediately preceding paragraph and is expected to be resolved under the Memorandum of Agreement described above.

On December 16, 2010, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Denarius Lewis, Caroll Ruiz, and Corey Weiner, former employees of a subsidiary of Panera Bread Company. The lawsuit was filed in the United States District Court for Middle District of Florida. The complaint alleges, among other things, violations of the Fair Labor Standards Act. The complaint seeks, among other relief, collective, and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees and such other relief as the Court might find just and proper. On February 29, 2012, the parties agreed to settle this matter for an amount up to $1.5 million for settlement payments to purported class members, plaintiffs' attorneys' fees, and costs of administering the settlement. The agreement includes no admission of wrongdoing. The terms and conditions of a definitive settlement agreement are under negotiation and such agreement is subject to approval by the Court. The settlement amount of $1.5 million is included in accrued expenses in the Company's Consolidated Balance Sheets as of March 27, 2012 and December 27, 2011.

In addition, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not, however, currently expect that the costs to resolve these matters individually or in the aggregate will have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Other

The Company is subject to on-going federal and state income tax audits and sales tax audits and any unfavorable rulings could materially and adversely affect its consolidated financial condition or comprehensive income. The Company believes reserves for these matters are adequately provided for in its consolidated financial statements.

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Business Segment Information

3 Months Ended

Mar. 27, 2012

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating activities of the bakery-cafes owned directly and indirectly by the Company. The Company-owned bakery-cafes conduct business under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Café® names. These bakery-cafes offer some or all of the following: fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complementary products through on-premise sales, as well as catering.

The Franchise Operations segment is comprised of the operating activities of the franchise business unit which licenses qualified operators to conduct business under the Panera Bread or Paradise Bakery & Café names and also monitors the operations of these bakery-cafes. Under the terms of most of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera Bread or Paradise Bakery & Café names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, cream cheese and indirectly supplies proprietary sweet goods items through a contract manufacturing arrangement, to Company-owned and franchise-operated bakery-cafes. The fresh dough is sold to a number of Company-owned and franchise-operated bakery-cafes at a delivered cost generally not to exceed 27 percent of the retail value of the end product. The sales and related costs to the franchise-operated bakery-cafes are separately stated line items in the Consolidated Statements of Comprehensive Income. The operating profit related to the sales to Company-owned bakery-cafes is classified as a reduction of the costs in the cost of food and paper products in the Consolidated Statements of Comprehensive Income.

Information related to the Company’s three business segments follows (in thousands):

	For the 13 Weeks Ended
	March 27, 2012			March 29, 2011
Revenues:
Company bakery-cafe operations	$	439,215		$	365,579
Franchise operations	24,822			22,582
Fresh dough and other product operations	71,343			66,025
Intercompany sales eliminations	(36,801		)	(32,086		)
Total revenues	$	498,579		$	422,100
Segment profit:
Company bakery-cafe operations	$	87,736		$	71,220
Franchise operations	22,801			21,007
Fresh dough and other product operations	4,397			5,915
Total segment profit	$	114,934		$	98,142
Depreciation and amortization	$	21,321		$	19,094
Unallocated general and administrative expenses	24,646			25,096
Pre-opening expenses	1,611			978
Interest expense	210			225
Other (income) expense, net	438			(804		)
Income before income taxes	$	66,708		$	53,553
Depreciation and amortization:
Company bakery-cafe operations	$	18,500		$	16,244
Fresh dough and other product operations	1,649			1,744
Corporate administration	1,172			1,106
Total depreciation and amortization	$	21,321		$	19,094
Capital expenditures:
Company bakery-cafe operations	$	24,921		$	21,890
Fresh dough and other product operations	1,917			217
Corporate administration	3,281			607
Total capital expenditures	$	30,119		$	22,714

	March 27, 2012		December 27, 2011
Segment assets:
Company bakery-cafe operations	$	720,096	$	682,246
Franchise operations	6,374		7,502
Fresh dough and other product operations	48,212		47,710
Total segment assets	$	774,682	$	737,458
Unallocated trade and other accounts receivable	2,362		3,359
Unallocated property and equipment	23,159		21,565
Unallocated deposits and other	4,186		4,234
Other unallocated assets	250,223		260,706
Total assets	$	1,054,612	$	1,027,322

“Unallocated trade and other accounts receivable” relates primarily to rebates and interest receivable, “unallocated property and equipment” relates primarily to corporate fixed assets, “unallocated deposits and other” relates primarily to insurance deposits, and “other unallocated assets” relates primarily to cash and cash equivalents and deferred income taxes.

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Subsequent Events

3 Months Ended

Mar. 27, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Event

On March 28, 2012, the first day of the second quarter of fiscal 2012, the Company obtained control of 16 bakery-cafes and the related area development rights from a Raleigh-Durham, North Carolina franchisee for a purchase price of approximately $48.2 million, which the Company paid in cash on March 27, 2012. The Company purchased substantially all of the assets and certain liabilities of the bakery-cafes. As of March 27, 2012, the cash paid for the acquisition was classified within prepaid expenses and other within the Consolidated Balance Sheets. The Company's operating results for the reported periods were not impacted by this acquisition as it was completed subsequent to March 27, 2012. Refer to Note 2 for information related to business combinations.

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 27, 2012	Mar. 29, 2011
Amounts used for basic and diluted per share calculations
Net income attributable to Panera Bread Company	$ 41,184	$ 32,774
Weighted average number of shares outstanding - basic (in shares)	29,183	29,845
Effect of dilutive stock-based employee compensation awards (in shares)	275	315
Weighted average number of shares outstanding - diluted (in shares)	29,458	30,160
Earnings per common share attributable to Panera Bread Company:
Basic (in dollars per share)	$ 1.41	$ 1.10
Diluted (in dollars per share)	$ 1.40	$ 1.09

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Accrued Expenses (Tables)

3 Months Ended

Mar. 27, 2012

Payables and Accruals [Abstract]

Accrued Expenses

	March 27, 2012		December 27, 2011
Compensation and related employment taxes	$	46,918	$	41,491
Unredeemed gift cards, net	45,080		58,321
Insurance	25,244		23,629
Taxes, other than income tax	18,643		18,512
Capital expenditures	14,786		19,116
Advertising	8,023		5,334
Rent	6,693		5,958
Loyalty program	6,644		5,916
Litigation settlements (Note 8)	6,500		5,000
Fresh dough and other product operations	5,264		7,101
Utilities	3,763		4,170
Deferred purchase price	2,567		2,565
Deferred revenue	2,286		2,236
Other	17,985		23,101
Total	$	210,396	$	222,450

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Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	Mar. 27, 2012	Dec. 27, 2011
Fair Value Disclosures [Abstract]
Cash equivalents	$ 18.3	$ 27.5

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Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2012	Mar. 29, 2011
Cash flows from operations:
Net income	$ 41,184	$ 32,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,321	19,094
Stock-based compensation expense	2,402	3,019
Tax benefit from exercise of stock options	(1,869)	(593)
Deferred income taxes	1,426	7,456
Other	(1,896)	870
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Trade and other accounts receivable, net	22,007	(6,044)
Inventories	983	266
Prepaid expenses	2,313	2,569
Deposits and other	22	(321)
Accounts payable	(6,603)	1,622
Accrued expenses	(5,855)	(14,877)
Deferred rent	758	1,273
Other long-term liabilities	(3,809)	(4,125)
Net cash provided by operating activities	72,384	42,983
Cash flows from investing activities:
Additions to property and equipment	(30,119)	(22,714)
PrepaidAcquisitionConsideration	(48,150)	0
Proceeds from sale of bakery-cafes	0	115
Net cash used in investing activities	(78,269)	(22,599)
Cash flows from financing activities:
Repurchase of common stock	(253)	(651)
Exercise of employee stock options	2,470	519
Tax benefit from exercise of stock options	1,869	593
Proceeds from issuance of common stock under employee benefit plans	598	516
Net cash provided by (used in) financing activities	4,684	977
Net decrease in cash and cash equivalents	(1,201)	21,361
Cash and cash equivalents at beginning of period	222,640	229,299
Cash and cash equivalents at end of period	$ 221,439	$ 250,660

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Goodwill

3 Months Ended

Mar. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The following is a reconciliation of the beginning and ending balances of the Company’s goodwill by reportable segment at March 27, 2012 (in thousands):

	Company Bakery- Cafe Operations		Franchise Operations		Fresh Dough Operations		Total
Balance as of December 27, 2011	$	104,442	$	1,934	$	1,695	$	108,071
Currency translation	48		—		—		48
Balance as of March 27, 2012	$	104,490	$	1,934	$	1,695	$	108,119

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 27, 2012	Dec. 27, 2011
Fresh dough facilities:
Raw materials	$ 2,906	$ 2,998
Finished goods	431	261
Bakery-cafes:
Raw materials	10,109	11,048
Paper goods	2,587	2,709
Total	$ 16,033	$ 17,016

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Goodwill (Tables)

3 Months Ended

Mar. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Reconciliation of goodwill by reportable segment

The following is a reconciliation of the beginning and ending balances of the Company’s goodwill by reportable segment at March 27, 2012 (in thousands):

	Company Bakery- Cafe Operations		Franchise Operations		Fresh Dough Operations		Total
Balance as of December 27, 2011	$	104,442	$	1,934	$	1,695	$	108,071
Currency translation	48		—		—		48
Balance as of March 27, 2012	$	104,490	$	1,934	$	1,695	$	108,119