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 31, 2015

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 28, 2015, the registrant had 25,320,196 shares of Class A common stock ($.0001 par value per share) and 1,381,730 shares of Class B common stock ($.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	11
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 4.	CONTROLS AND PROCEDURES	23
PART II	OTHER INFORMATION	24
ITEM 1.	LEGAL PROCEEDINGS	24
ITEM 1A.	RISK FACTORS	24
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 6.	EXHIBITS	25
	Signatures	26
	Exhibit Index	27

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PANERA BREAD COMPANY

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share information)

	March 31, 2015			December 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	201,531		$	196,493
Trade accounts receivable, net	36,085			36,584
Other accounts receivable	15,977			70,069
Inventories	19,744			22,811
Prepaid expenses and other	52,755			51,588
Deferred income taxes	32,372			28,621
Assets held for sale	53,749			—
Total current assets	412,213			406,166
Property and equipment, net	733,820			787,294
Other assets:
Goodwill	120,778			120,778
Other intangible assets, net	68,755			70,940
Deposits and other	5,564			5,724
Total other assets	195,097			197,442
Total assets	$	1,341,130		$	1,390,902
LIABILITIES
Current liabilities:
Accounts payable	$	19,238		$	19,511
Accrued expenses	305,912			333,201
Liabilities associated with assets held for sale	8,063			—
Total current liabilities	333,213			352,712
Long-term debt	100,000			100,000
Deferred rent	61,594			67,390
Deferred income taxes	47,961			76,589
Other long-term liabilities	51,635			58,027
Total liabilities	594,403			654,718
Commitments and contingencies (Note 8)
STOCKHOLDERS’ EQUITY
Common stock, $.0001 par value per share:
Class A, 112,500,000 shares authorized; 30,729,853 issued and 25,312,843 outstanding at March 31, 2015; 30,703,472 issued and 25,442,728 outstanding at December 30, 2014	3			3
Class B, 10,000,000 shares authorized; 1,381,730 issued and outstanding at March 31, 2015; 1,381,865 issued and outstanding at December 30, 2014	—			—
Treasury stock, carried at cost; 5,417,010 shares at March 31, 2015 and 5,260,744 shares at December 30, 2014	(731,212		)	(706,073		)
Preferred stock, $.0001 par value per share; 2,000,000 shares authorized and no shares issued or outstanding at March 31, 2015 and December 30, 2014	—			—
Additional paid-in capital	219,284			214,437
Accumulated other comprehensive loss	(2,385		)	(1,360		)
Retained earnings	1,261,037			1,229,177
Total stockholders’ equity	746,727			736,184
Total liabilities and stockholders’ equity	$	1,341,130		$	1,390,902

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 31, 2015			April 1, 2014
Revenues:
Bakery-cafe sales, net	$	573,676		$	535,549
Franchise royalties and fees	32,393			28,892
Fresh dough and other product sales to franchisees	42,435			40,896
Total revenues	$	648,504		$	605,337
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products	$	173,657		$	158,894
Labor	181,537			162,463
Occupancy	42,856			39,251
Other operating expenses	80,737			75,817
Total bakery-cafe expenses	478,787			436,425
Fresh dough and other product cost of sales to franchisees	36,266			35,634
Depreciation and amortization	33,947			29,442
General and administrative expenses	37,767			35,007
Pre-opening expenses	1,649			1,824
Refranchising loss	8,891			—
Total costs and expenses	597,307			538,332
Operating profit	51,197			67,005
Interest expense	486			623
Other (income) expense, net	(184		)	(1,212		)
Income before income taxes	50,895			67,594
Income taxes	19,035			25,199
Net income	$	31,860		$	42,395
Earnings per common share:
Basic	$	1.20		$	1.55
Diluted	$	1.20		$	1.55
Weighted average shares of common and common equivalent shares outstanding:
Basic	26,478			27,269
Diluted	26,569			27,405
Other comprehensive loss, net of tax:
Foreign currency translation adjustment	$	(1,025	)	$	(394	)
Other comprehensive loss	$	(1,025	)	$	(394	)
Comprehensive income	$	30,835		$	42,001

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

4

PANERA BREAD COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	For the 13 Weeks Ended
	March 31, 2015			April 1, 2014
Cash flows from operating activities:
Net income	$	31,860		$	42,395
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,947			29,442
Stock-based compensation expense	4,046			3,139
Tax benefit from stock-based compensation	(28		)	(351		)
Deferred income taxes	(32,379		)	(16,325		)
Refranchising loss	8,891			—
Other	458			297
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Trade and other accounts receivable, net	54,290			37,414
Inventories	1,676			2,688
Prepaid expenses and other	(1,167		)	3,479
Deposits and other	160			(94		)
Accounts payable	(273		)	9,632
Accrued expenses	(25,059		)	(39,096		)
Deferred rent	772			(2,496		)
Other long-term liabilities	(5,176		)	(5,679		)
Net cash provided by operating activities	72,018			64,445
Cash flows from investing activities:
Additions to property and equipment	(49,574		)	(42,301		)
Proceeds from refranchising	3,218			—
Proceeds from sale-leaseback transactions	2,161			2,709
Proceeds from sale of property and equipment	1,553			—
Net cash used in investing activities	(42,642		)	(39,592		)
Cash flows from financing activities:
Repurchase of common stock	(25,139		)	(50,300		)
Exercise of employee stock options	—			190
Tax benefit from stock-based compensation	28			351
Proceeds from issuance of common stock under employee benefit plans	773			748
Net cash used in financing activities	(24,338		)	(49,011		)
Net increase (decrease) in cash and cash equivalents	5,038			(24,158		)
Cash and cash equivalents at beginning of period	196,493			125,245
Cash and cash equivalents at end of period	$	201,531		$	101,087

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

5

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 of America (“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 30, 2014 (“fiscal 2014”). 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 30, 2014, as filed with the SEC on February 20, 2015. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 30, 2014 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 the Company's 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 April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This update was issued to clarify the reporting for discontinued operations and disclosures for disposals of components of an entity. This update is effective for annual and interim periods beginning after December 15, 2014. The adoption of this update did not have a material effect on the Company’s consolidated financial statements or related disclosures; however, it may impact the reporting of future discontinued operations if and when they occur.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual and interim periods beginning after December 15, 2016, which will require the Company to adopt these provisions in the first quarter of fiscal 2017. Early application is not permitted. This update permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect this guidance will have on the Company's consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect of the standard but its adoption is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements.

6

Note 2. Divestitures

Refranchising Initiative

In February 2015, the Company announced a plan to refranchise approximately 50 to 150 Company-owned bakery-cafes by December 29, 2015, the end of fiscal 2015. As of March 31, 2015, the Company classified as held for sale the assets and certain liabilities of 73 Company-owned bakery-cafes the Company expects to sell during the next 12 months. During the thirteen weeks ended March 31, 2015, the Company recorded a loss on assets held for sale of $7.6 million.  The Company classifies assets as held for sale and ceases depreciation of the assets when those assets meet the held for sale criteria, as defined in GAAP. The Company also recognized impairment losses of $3.8 million during the thirteen weeks ended March 31, 2015 related to certain under-performing bakery-cafes in one of the markets for which the Company has signed letters of intent, which have been excluded from the proposed sale. The following summarizes the financial statement carrying amounts of assets and liabilities associated with the bakery-cafes classified as held for sale as of March 31, 2015 (in thousands):

	March 31, 2015
Inventories	$	1,391
Property and equipment, net	52,358
Assets held for sale	$	53,749
Deferred rent	$	6,756
Asset retirement obligation	1,307
Liabilities associated with assets held for sale	$	8,063

Assets held for sale were valued using Level 3 inputs, representing information obtained from signed letters of intent.  Costs to sell are considered in the estimates of fair value for those assets included in Assets held for sale on our Consolidated Balance Sheets.

On March 3, 2015, the Company sold substantially all of the assets of one bakery-cafe to an existing franchisee for cash proceeds of approximately $3.2 million, which resulted in a gain on sale of approximately $2.5 million.

The aforementioned loss on assets held for sale, impairment charges and gain on sale have been aggregated in a single caption entitled “Refranchising loss” in the Consolidated Statements of Comprehensive Income for the thirteen weeks ended March 31, 2015.

Note 3. Fair Value Measurements

The Company’s cash equivalents of $94.5 million and $92.3 million at March 31, 2015 and December 30, 2014, 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 31, 2015		December 30, 2014
Food:
Fresh dough facilities:
Raw materials	$	3,127	$	3,413
Finished goods	543		460
Bakery-cafes:
Raw materials	12,956		15,152
Paper goods	3,118		3,786
Total	$	19,744	$	22,811

7

Note 5. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	March 31, 2015		December 30, 2014
Unredeemed gift cards, net	$	84,629	$	105,576
Capital expenditures	54,757		56,808
Insurance	34,905		32,559
Compensation and related employment taxes	33,608		59,442
Advertising	21,530		10,147
Taxes, other than income taxes	20,641		21,068
Income taxes payable	9,768		—
Fresh dough and other product operations	9,365		6,812
Occupancy costs	6,873		7,263
Utilities	5,766		5,527
Deferred revenue	4,984		5,291
Loyalty program	2,644		2,525
Other	16,442		20,183
Total	$	305,912	$	333,201

Note 6. Debt

On June 11, 2014, the Company entered into a term loan agreement (the “Term Loan Agreement”), by and among the Company, as borrower, Bank of America, N.A., as administrative agent, and other lenders party thereto. The Term Loan Agreement provides for an unsecured term loan (the "Term Loan") in the amount of $100 million that is scheduled to mature on June 11, 2019, 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 the Company, as defined in the Term Loan Agreement. The Term Loan bears interest at a rate equal to, at the Company's option, (1) LIBOR plus a margin ranging from 1.00 percent to 1.50 percent depending on the Company’s consolidated leverage ratio or (2) the highest of (a) the Bank of America prime rate, (b) the Federal funds rate plus 0.50 percent or (c) LIBOR plus 1.00 percent, plus a margin ranging from 0.00 percent to 0.50 percent depending on the Company’s consolidated leverage ratio. The Company incurred debt issuance costs of $0.2 million in connection with the issuance of the Term Loan. The debt issuance costs are being amortized to expense over the term of the Term Loan. The weighted-average interest rate of the Term Loan, excluding the amortization of debt issuance costs, was 1.17 percent for the thirteen weeks ended March 31, 2015. As of March 31, 2015, the carrying amount of the Term Loan approximates fair value as the interest rate on the Term Loan approximates current market rates (Level 2 inputs).

On November 30, 2012, the Company entered into a credit agreement (the "Credit Agreement") with Bank of America, N.A. and other lenders party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $250 million that will become due on November 30, 2017. As of March 31, 2015 and December 30, 2014, the Company had no loans outstanding under the Credit Agreement.

Both the Term Loan Agreement and the Credit Agreement contain customary affirmative and negative covenants, including covenants limiting liens, dispositions, fundamental changes, investments, indebtedness, and certain transactions and payments. In addition, the Term Loan Agreement and the Credit Agreement contain various financial covenants that, among other things, require the Company to satisfy two financial covenants at the end of each fiscal quarter: (1) a consolidated leverage ratio less than or equal to 3.00 to 1.00, and (2) a consolidated fixed charge coverage ratio of greater than or equal to 2.00 to 1.00. As of March 31, 2015, the Company was in compliance with all covenant requirements in the Term Loan Agreement and the Credit Agreement.

Note 7. Share Repurchase Authorization

On June 5, 2014, the Company's Board of Directors approved a three year share repurchase authorization of up to $600 million of the Company's Class A common stock (the "2014 repurchase authorization"), pursuant to which the Company may repurchase shares 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 resume the status of authorized but unissued shares or may be held by the Company as treasury stock. The 2014 repurchase authorization may be modified, suspended, or discontinued by the Company's Board of Directors at any time. During the thirteen weeks ended March 31, 2015, we repurchased 155,401 shares under the 2014 repurchase authorization, at an average price of $160.84 per share, for an aggregate purchase price of approximately $25.0 million.

8

As of March 31, 2015, the Company has repurchased a total of 582,922 shares of our Class A common stock under this repurchase program, at a weighted-average price of $157.13 per share, for an aggregate purchase price of approximately $91.6 million. There was approximately $508.4 million available under the 2014 repurchase authorization as of March 31, 2015. On April 15, 2015, the Company's Board of Directors approved an increase of the 2014 repurchase authorization to $750 million.

Note 8. Commitments and Contingencies

Lease Obligations

As of March 31, 2015, the Company has guaranteed the operating leases of 18 franchisee or affiliate locations, which the Company accounted for in accordance with the accounting requirements for guarantees. These guarantees are primarily a result of the Company's sales of Company-owned bakery-cafes to franchisees and affiliates, pursuant to which the Company exercised its right to assign the lease or sublease for the bakery-cafe but remain liable to the landlord for the remaining lease term in the event of a default by the assignee. These leases have terms expiring on various dates from April 30, 2015 to September 30, 2027 and potential future rental payments of approximately $15.9 million as of March 31, 2015. The obligations from these leases will 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 requirements 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 the accounting requirements because the fair value of these lease guarantees was determined by the Company to be insignificant individually, and in the aggregate, based on an analysis of the facts and circumstances of each such lease and each such assignee's performance, and the Company did not believe it was probable that 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. Applicable assignees continue to have primary liability for these operating leases.

Legal Proceedings

On July 2, 2014, a purported class action lawsuit was filed against one of the Company's subsidiaries by Jason Lofstedt, a former employee of one of the Company's subsidiaries. The lawsuit was filed in the California Superior Court, County of Riverside. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods, and violations of California's Unfair Competition Law. 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. The Company believes its subsidiary has meritorious defenses to each of the claims in the lawsuit and is prepared to vigorously defend the lawsuit. There can be no assurance, however, that the Company's subsidiary will be successful, and an adverse resolution of the lawsuit could have a material adverse effect on the Company's consolidated financial position and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

In addition to the legal matter described above, the Company is subject to various legal proceedings, claims, and litigation that arise in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matter described above, is inherently uncertain. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on the Company's consolidated financial position and results of operations. However, a significant increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect its consolidated financial statements.

Other

The Company is subject to ongoing federal and state income tax audits and sales and use tax audits. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on its consolidated financial statements. However, a significant increase in the number of these audits, or one or more audits under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect the Company's consolidated financial position and results of operations. The Company believes reserves for these matters are adequately provided for in its consolidated financial statements.

9

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, pasta dishes, 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 & Cafe 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 & Cafe names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, and 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 both 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 sales, costs, and operating profit related to the sales to Company-owned bakery-cafes are eliminated in consolidation in the Consolidated Statements of Comprehensive Income.

Segment information related to the Company’s three business segments is as follows (in thousands):

	For the 13 Weeks Ended
	March 31, 2015			April 1, 2014
Revenues:
Company bakery-cafe operations	$	573,676		$	535,549
Franchise operations	32,393			28,892
Fresh dough and other product operations	90,124			86,525
Intercompany sales eliminations	(47,689		)	(45,629		)
Total revenues	$	648,504		$	605,337
Segment profit:
Company bakery-cafe operations	$	85,998		$	99,124
Franchise operations	31,079			27,457
Fresh dough and other product operations	6,169			5,262
Total segment profit	$	123,246		$	131,843
Depreciation and amortization	$	33,947		$	29,442
Unallocated general and administrative expenses	36,453			33,572
Pre-opening expenses	1,649			1,824
Interest expense	486			623
Other (income) expense, net	(184		)	(1,212		)
Income before income taxes	$	50,895		$	67,594
Depreciation and amortization:
Company bakery-cafe operations	$	27,335		$	24,783
Fresh dough and other product operations	2,309			2,057
Corporate administration	4,303			2,602
Total depreciation and amortization	$	33,947		$	29,442
Capital expenditures:
Company bakery-cafe operations	$	35,518		$	30,284
Fresh dough and other product operations	994			2,830
Corporate administration	13,062			9,187
Total capital expenditures	$	49,574		$	42,301

10

	March 31, 2015		December 30, 2014
Segment assets:
Company bakery-cafe operations	$	925,244	$	953,896
Franchise operations	9,966		13,145
Fresh dough and other product operations	67,029		65,219
Total segment assets	$	1,002,239	$	1,032,260
Unallocated cash and cash equivalents	$	201,531	$	196,493
Unallocated trade and other accounts receivable	2,129		3,104
Unallocated property and equipment	90,431		84,224
Unallocated deposits and other	3,657		3,791
Other unallocated assets	41,143		71,030
Total assets	$	1,341,130	$	1,390,902

“Unallocated cash and cash equivalents” relates primarily to corporate cash and cash equivalents, “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 current and deferred income taxes.

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 31, 2015		April 1, 2014
Amounts used for basic and diluted per share calculations:
Net income	$	31,860	$	42,395
Weighted average number of shares outstanding — basic	26,478		27,269
Effect of dilutive stock-based employee compensation awards	91		136
Weighted average number of shares outstanding — diluted	26,569		27,405
Earnings per common share:
Basic	$	1.20	$	1.55
Diluted	$	1.20	$	1.55

For the thirteen weeks ended March 31, 2015 and April 1, 2014, weighted-average outstanding stock options, restricted stock, and stock-settled appreciation rights of less than 0.1 million shares, respectively, 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.

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

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, regarding our intention to repurchase shares from time to time under the share repurchase program and the source of funding of such repurchases, our refranchising activities, our anticipated growth, operating results, future earnings per share, plans, objectives, and the impact of our investments in sales-building initiatives and operational capabilities on future sales and earnings, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the words “believe”, “positioned”, “estimate”, “project”, “plan”, “goal”, “target”, “assumption”, “continue”, “intend”, “expect”, “future”, “anticipate”, and other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict, and you should not place undue

11

reliance on our forward-looking statements. 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 United States Securities and Exchange Commission, or SEC, including our Form 10-K for the year ended December 30, 2014 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. While we may elect to update forward-looking statements at some point in the future, 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.

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 comprised of sales of fresh dough, produce, tuna, and cream cheese to certain of our franchisees. Franchise royalties and fees include royalty income and franchise fees, which includes fees for development and real estate services and information technology services. 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.

We include in this report information on Company-owned, franchise-operated, and system-wide comparable net bakery-cafe sales percentages. Bakery-cafes in our comparable net bakery-cafe sales percentages include those bakery-cafes with an open date prior to the first day of our prior fiscal year, which we refer to as our base store bakery-cafes. Company-owned comparable net bakery-cafe sales percentages are based on net sales from Company-owned base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchise-operated base store bakery-cafes, as reported by franchisees. System-wide comparable net bakery-cafe sales percentages are based on net sales at Company-owned and franchise-operated base store bakery-cafes. Acquired Company-owned and franchise-operated bakery-cafes and other restaurant or bakery-cafe concepts are included in our 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 our prior fiscal year.  Comparable net bakery-cafe sales exclude closed locations.

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 sales information internally in connection with store development decisions, planning, and budgeting analyses. We believe franchise-operated and system-wide 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 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 sales for all locations, whereas comparable net bakery-cafe sales exclude closed locations and are based on sales only from 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 after opening, after which customers “settle-in” to normal usage patterns. On average, average weekly net sales during the “settle-in” period are 5 percent to 10 percent less than 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” period, the number of bakery-cafes in the “settle-in” period, and the number of bakery-cafes in the comparable bakery-cafe base.

Executive Summary of Results

For the thirteen weeks ended March 31, 2015, we earned $1.20 per diluted share with the following performance on key metrics: system-wide comparable net bakery-cafe sales increased 0.7 percent (growth of 1.5 percent for Company-owned bakery-cafes and decline of 0.1 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased0.2 percent to $47,039 ($47,478 for Company-owned bakery-cafes and $46,614 for franchise-operated bakery-cafes); 25 new bakery-cafes opened system-wide (11 Company-owned bakery-cafes and 14 franchise-operated bakery-cafes); and four bakery-cafes closed

12

system-wide (two Company-owned bakery-cafes and two franchise-operated bakery-cafes). Included in diluted earnings per share for the thirteen weeks ended March 31, 2015 were charges related to our refranchising initiative of $8.9 million, or $0.21 per diluted share, as described further in Note 2 in the accompanying consolidated financial statements.

For the thirteen weeks ended April 1, 2014, we earned $1.55 per diluted share with the following performance on key metrics: system-wide comparable net bakery-cafe sales on a calendar basis increased 0.1 percent (growth of 0.1 percent for both Company-owned and franchise-operated bakery-cafes); system-wide average weekly net sales decreased0.1 percent to $46,925 ($47,142 for Company-owned bakery-cafes and $46,717 for franchise-operated bakery-cafes); 27 new bakery-cafes opened system-wide (16 Company-owned bakery-cafes and 11 franchise-operated bakery-cafes); and four bakery-cafes closed system-wide (two Company-owned bakery-cafes and two franchise-operated bakery-cafes).

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 31, 2015		April 1, 2014
Revenues:
Bakery-cafe sales, net	88.5	%	88.5	%
Franchise royalties and fees	5.0		4.8
Fresh dough and other product sales to franchisees	6.5		6.8
Total revenues	100.0	%	100.0	%
Costs and expenses:
Bakery-cafe expenses (1):
Cost of food and paper products	30.3	%	29.7	%
Labor	31.6		30.3
Occupancy	7.5		7.3
Other operating expenses	14.1		14.2
Total bakery-cafe expenses	83.5		81.5
Fresh dough and other product cost of sales to franchisees (2)	85.5		87.1
Depreciation and amortization	5.2		4.9
General and administrative expenses	5.8		5.8
Pre-opening expenses	0.3		0.3
Refranchising loss	1.4		—
Total costs and expenses	92.1		88.9
Operating profit	7.9		11.1
Interest expense	0.1		0.1
Other (income) expense, net	—		(0.2	)
Income before income taxes	7.8		11.2
Income taxes	2.9		4.2
Net income	4.9	%	7.0	%
Other comprehensive loss	(0.2	)	(0.1	)
Comprehensive income	4.8	%	6.9	%

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

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

13

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 31, 2015		April 1, 2014
Number of bakery-cafes:
Company-owned:
Beginning of period	925		867
Bakery-cafes opened	11		16
Bakery-cafes closed	(2	)	(2	)
Bakery-cafes refranchised (1)	(1	)	—
End of period	933		881
Franchise-operated:
Beginning of period	955		910
Bakery-cafes opened	14		11
Bakery-cafes closed	(2	)	(2	)
Bakery-cafes refranchised (1)	1		—
End of period	968		919
System-wide:
Beginning of period	1,880		1,777
Bakery-cafes opened	25		27
Bakery-cafes closed	(4	)	(4	)
End of period (2)	1,901		1,800

(1) In March 2015, we refranchised one bakery-cafe to an existing franchisee.

(2) Excluded from the number of total bakery-cafes were 29 and seven catering-only units, referred to as delivery hubs, as of the thirteen weeks ended March 31, 2015 and April 1, 2014, respectively.

Comparable Net Bakery-cafe Sales

The following table sets forth certain information relating to comparable net bakery-cafe sales growth for the periods indicated:

	For the 13 Weeks Ended
	March 31, 2015		April 1, 2014 (1)
Company-owned	1.5	%	0.1	%
Franchise-operated	(0.1	)%	0.1	%
System-wide	0.7	%	0.1	%

(1) Comparable net bakery-cafe sales for the thirteen weeks ended April 1, 2014 reflects a calendar basis comparison. We believe that calendar basis comparable net bakery-cafe sales percentages better reflects the performance of the business as it eliminates the impact of the extra week in fiscal 2013 and compares consistent calendar weeks.

14

The following table summarizes the composition of Company-owned comparable net bakery-cafe sales growth for the periods indicated:

	For the 13 Weeks Ended
	March 31, 2015		April 1, 2014
Price	1.3	%	1.7	%
Mix	0.1	%	1.2	%
Average check	1.4	%	2.9	%
Transactions	0.1	%	(2.8	)%
Company-owned comparable net bakery-cafe sales growth	1.5	%	0.1	%

Price growth year-over-year during the thirteen weeks ended March 31, 2015 was modest, generally due to our decision to take minimal price increases. Mix increased slightly during the thirteen weeks ended March 31, 2015 due to modest mix growth, partially offset by slower catering sales growth. Transaction growth was modest during the thirteen weeks ended March 31, 2015 as momentum from our strategic initiatives was partially muted by severe weather.

Results of Operations

Revenues

The following table summarizes revenues for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended				Percentage
	March 31, 2015		April 1, 2014		Change
Bakery-cafe sales, net	$	573,676	$	535,549	7.1	%
Franchise royalties and fees	32,393		28,892		12.1	%
Fresh dough and other product sales to franchisees	42,435		40,896		3.8	%
Total revenues	$	648,504	$	605,337	7.1	%
System-wide average weekly net sales	$	47,039	$	46,925	0.2	%

The growth in total revenues for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily due to the opening of 112 new bakery-cafes system-wide since April 1, 2014, partially offset by the closure of 11 bakery-cafes system-wide since April 1, 2014.

Bakery-cafe sales, net

The following table summarizes net bakery-cafe sales for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Bakery-cafe sales, net	$	573,676		$	535,549		7.1	%
As a percentage of total revenues	88.5		%	88.5		%
Company-owned average weekly net sales	$	47,478		$	47,142		0.7	%
Company-owned number of operating weeks	12,083			11,360			6.4	%

15

The increase in net bakery-cafe sales for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily due to the opening of 60 new Company-owned bakery-cafes since April 1, 2014, partially offset by the closure of seven Company-owned bakery-cafes since April 1, 2014.

Franchise royalties and fees

The following table summarizes franchise royalties and fees for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Franchise royalties	$	30,894		$	28,479		8.5	%
Franchise fees	1,499			413			263.0	%
Total	$	32,393		$	28,892		12.1	%
As a percentage of total revenues	5.0		%	4.8		%
Franchise-operated average weekly net sales	$	46,614		$	46,717		(0.2	)%
Franchise-operated number of operating weeks	12,486			11,862			5.3	%

The increase in franchise royalty and fee revenues for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily due to the opening of 52 franchise-operated bakery-cafes since April 1, 2014 and increased information technology fees, partially offset by the closure of four franchise-operated bakery-cafes since April 1, 2014.

As of March 31, 2015, there were 968 franchise-operated bakery-cafes open and we had received commitments to open 97 additional franchise-operated bakery-cafes. The timetables for opening these bakery-cafes are established in the respective Area Development Agreements, or ADAs, with franchisees, which provide for the majority of such bakery-cafes to open in the next four to five years. An ADA requires a franchisee to develop a specified number of bakery-cafes by specified 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 bakery-cafes or develop locations through new franchisees in that market. We may exercise one or more alternative remedies to address defaults by franchisees, including not only development defaults, but also defaults in complying 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

The following table summarizes fresh dough and other product sales to franchisees for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Fresh dough and other product sales to franchisees	$	42,435		$	40,896		3.8	%
As a percentage of total revenues	6.5		%	6.8		%

The increase in fresh dough and other product sales to franchisees for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily due to the opening of 52 franchise-operated bakery-cafes since April 1, 2014, partially offset by the closure of four franchise-operated bakery-cafes since April 1, 2014.

Costs and Expenses

Cost of food and paper products

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

16

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 following table summarizes cost of food and paper products for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Cost of food and paper products	$	173,657		$	158,894		9.3	%
As a percentage of bakery-cafe sales, net	30.3		%	29.7		%

The increase in cost of food and paper products as a percentage of net bakery-cafe sales for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily due to food cost inflation, partially offset by improved leverage of our fresh dough manufacturing costs due to additional bakery-cafe openings. For the thirteen weeks ended March 31, 2015, there was an average of 82 bakery-cafes per fresh dough facility, compared to an average of 78 for the thirteen weeks ended April 1, 2014.

Labor

The following table summarizes labor expense for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Labor expense	$	181,537		$	162,463		11.7	%
As a percentage of bakery-cafe sales, net	31.6		%	30.3		%

The increase in labor expense as a percentage of net bakery-cafe sales for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily a result of increased labor supporting ongoing operational initiatives and wage inflation.

Occupancy

The following table summarizes occupancy cost for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Occupancy	$	42,856		$	39,251		9.2	%
As a percentage of bakery-cafe sales, net	7.5		%	7.3		%

The increase in occupancy costs as a percentage of net bakery-cafe sales for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily a result of modestly higher common area maintenance costs.

17

Other operating expenses

The following table summarizes other operating expenses for the periods presented (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Other operating expenses	$	80,737		$	75,817		6.5	%
As a percentage of bakery-cafe sales, net	14.1		%	14.2		%

The decrease in other operating expenses as a percentage of net bakery-cafe sales for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily a result of lower marketing expense, partially offset by higher controllable expenses.

Fresh dough and other product cost of sales to franchisees

The following table summarizes fresh dough and other product cost of sales to franchisees for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Fresh dough and other product cost of sales to franchisees	$	36,266		$	35,634		1.8	%
As a percentage of fresh dough and other product sales to franchisees	85.5		%	87.1		%

The decrease 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 31, 2015 compared to the same period in fiscal 2014 was primarily the result of lower wheat and distribution costs.

Depreciation and amortization

The following table summarizes depreciation and amortization for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
Depreciation and amortization	$	33,947		$	29,442		15.3	%
As a percentage of total revenues	5.2		%	4.9		%

The increase in depreciation and amortization as a percentage of total revenues for the thirteen weeks ended March 31, 2015 compared to the same period in fiscal 2014 was primarily the result of increased depreciation on investments in bakery-cafes and support centers to support ongoing operational initiatives.

General and administrative expenses

The following table summarizes general and administrative expenses for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	March 31, 2015			April 1, 2014			Change
General and administrative expenses	$	37,767		$	35,007		7.9	%
As a percentage of total revenues	5.8		%	5.8		%

18

General and administrative expenses as a percentage of total revenues for the thirteen weeks ended March 31, 2015 remained consistent compared to the same period in fiscal 2014 as lower compensation expense offset continued investments in strategic initiatives.

Refranchising loss

In February 2015, we announced a plan to refranchise approximately 50 to 150 bakery-cafes by December 29, 2015, the end of fiscal 2015. As of March 31, 2015, we classified as held for sale the assets and certain liabilities of 73 bakery-cafes we expect to sell during the next 12 months. During the thirteen weeks ended March 31, 2015, we recorded a loss on assets held for sale of $7.6 million. We also recognized impairment losses of $3.8 million during the thirteen weeks ended March 31, 2015 related to certain under-performing bakery-cafes in one of the markets for which we have signed letters of intent, which have been excluded from the proposed sale. On March 3, 2015, we sold substantially all of the assets of one bakery-cafe to an existing franchisee for cash proceeds of approximately $3.2 million, which resulted in a gain on sale of approximately $2.5 million.

Other (income) expense, net

Other (income) expense, net was $0.2 million of income for the thirteen weeks ended March 31, 2015 compared to $1.2 million of income for the thirteen weeks ended April 1, 2014. Other (income) expense, net for both the thirteen weeks ended March 31, 2015 and April 1, 2014 was comprised of immaterial items.

Liquidity and Capital Resources

Cash and cash equivalents were $201.5 million as of March 31, 2015 compared to $196.5 million as of December 30, 2014. This $5.0 millionincrease was primarily a result of cash generated from operations during the thirteen weeks ended March 31, 2015 of $72.0 million and proceeds from refranchising, sale-leaseback transactions, and the sale of property and equipment totaling $7.0 million, partially offset by capital expenditures of $49.6 million and the use of $25.1 million to repurchase shares of our Class A common stock. We finance our activities through cash flow generated through operations and term loan borrowings. We also have the ability to further borrow up to $250 million under a credit facility, as described below. Historically, our principal requirements for cash have primarily resulted from the cost of food and paper products, employee labor, the repurchase of shares of our Class A common stock, 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 to support ongoing operational initiatives.

Excluding assets held for sale and liabilities associated with assets held for sale, we had positive working capital of $33.3 million as of March 31, 2015 compared to positive working capital of $53.5 million as of December 30, 2014. The decrease in working capital resulted primarily from a decrease in trade and other accounts receivable of $54.6 million, partially offset by a decrease in accrued expenses of $27.3 million and the previously described increase in cash and cash equivalents of $5.0 million. We believe that cash provided by our operations, our term loan borrowings, and available borrowings under our existing credit facility will be sufficient to fund our cash requirements for the foreseeable future. We also expect to incur up to $500 million of new debt in fiscal 2015 to finance increased share repurchase activity. We have not required significant working capital because customers generally pay using cash or credit and debit cards and because our operations do not require significant receivables, nor do they require significant inventories due, in part, to our use of various fresh ingredients.

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

	For the 13 Weeks Ended
	March 31, 2015			April 1, 2014
Cash provided by (used in):
Operating activities	$	72,018		$	64,445
Investing activities	(42,642		)	(39,592		)
Financing activities	(24,338		)	(49,011		)
Net increase (decrease) in cash and cash equivalents	$	5,038		$	(24,158	)

19

Operating Activities

Cash provided by operating activities was $72.0 million and $64.4 million for the thirteen weeks ended March 31, 2015 and April 1, 2014, respectively. Cash provided by operating activities consists primarily of net income, adjusted for non-cash expenses such as depreciation and amortization, and the net change in operating assets and liabilities.

Cash provided by operating activities for the thirteen weeks ended March 31, 2015 consisted primarily of net income adjusted for non-cash expenses, including charges related to our refranchising initiative, and a decrease in trade and other accounts receivable, partially offset by a decrease in the net deferred income tax liability and accrued expenses. The decrease in trade and other accounts receivable was primarily due to a decrease in other receivables due to the timing of the holidays near our fiscal year end and a decrease in refundable income taxes due to the timing of payments and the absence of bonus depreciation in fiscal 2015. The decrease in accrued expenses was primarily due to a decrease in the balance of outstanding gift cards and the timing of employee compensation payments. The decrease in the net deferred income tax liability relates primarily to the absence of bonus depreciation in fiscal 2015.

Cash provided by operating activities for the thirteen weeks ended April 1, 2014 consisted primarily of net income adjusted for non-cash expenses and a decrease in trade and other accounts receivable, partially offset by a decrease in accrued expenses. The decrease in trade and other accounts receivable was primarily due to a decrease in other receivables due to the timing of the holidays near our fiscal year end and a decrease in refundable income taxes due to the timing of payments. The decrease in accrued expenses was primarily due to the timing of employee compensation payments and a decrease in the balance of outstanding gift cards.

Investing Activities

Cash used in investing activities was $42.6 million and $39.6 million for the thirteen weeks ended March 31, 2015 and April 1, 2014, respectively. Investing activities consists primarily of capital expenditures, proceeds from the refranchising of Company-owned bakery-cafes, the sale of property and equipment, and the sale and leaseback of bakery-cafes.

Capital Expenditures

Capital expenditures are the largest ongoing component of our investing activities. New and existing bakery-cafe expenditures include costs related to the opening of bakery-cafes and delivery hubs, to remodel and maintain bakery-cafes, and to upgrade systems and equipment in bakery-cafes. Fresh dough facility expenditures include costs related to the opening of new fresh dough facilities and costs to expand, remodel and maintain existing facilities. Support center expenditures primarily include investments in technology infrastructure to create the capabilities needed to support ongoing operational initiatives and costs related to enterprise systems and other capital needs. Capital expenditures, for the periods indicated, were as follows (in thousands):

	For the 13 Weeks Ended
	March 31, 2015		April 1, 2014
New bakery-cafes	$	27,881	$	16,806
Existing bakery-cafes	7,637		13,478
Fresh dough facilities	994		2,830
Support centers	13,062		9,187
Total	$	49,574	$	42,301

Our capital requirements 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, the nature of the arrangements negotiated with landlords, and the extent of operational initiatives. We believe that cash provided by our operations, our term loan borrowings, and available borrowings under our credit facility will be sufficient to fund our capital requirements in both our short- and long-term future. We continue to anticipate $225 million to $250 million of capital expenditures in fiscal 2015, including the opening of approximately 10 Company-owned delivery hubs, approximately 55 to 65 Company-owned bakery-cafes, and the conversion of approximately 300 Company-owned bakery-cafes to Panera 2.0, which is intended to enhance the experience for both our dine-in and to-go guests. We also expect to refranchise 50 to 150 bakery-cafes by the end of fiscal 2015.

20

Financing Activities

Cash used in financing activities was $24.3 million and $49.0 million for the thirteen weeks ended March 31, 2015 and April 1, 2014, respectively. Financing activities for the thirteen weeks ended March 31, 2015 and April 1, 2014 consisted primarily of $25.1 million and $50.3 million, respectively, used to repurchase shares of our Class A common stock.

Share Repurchases

On August 23, 2012, our Board of Directors approved a three year share repurchase authorization of up to $600 million of our Class A common stock, which we refer to as the 2012 repurchase authorization, pursuant to which we repurchased shares on the open market under a Rule 10b5-1 plan. During the thirteen weeks ended April 1, 2014, we repurchased 271,412 shares under the 2012 repurchase authorization, at an average price of $184.22 per share, for an aggregate purchase price of approximately $50.0 million. On June 5, 2014, our Board of Directors terminated this repurchase authorization.

On June 5, 2014, our Board approved a three year share repurchase authorization of up to $600 million of our Class A common stock, which we refer to as the 2014 repurchase authorization, pursuant to which we may repurchase shares 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 resume the status of authorized but unissued shares or may be held by us as treasury stock. The 2014 repurchase authorization may be modified, suspended, or discontinued by our Board at any time. During the thirteen weeks ended March 31, 2015, we repurchased 155,401 shares under the 2014 repurchase authorization, at an average price of $160.84 per share, for an aggregate purchase price of approximately $25.0 million. As of March 31, 2015, we had repurchased a total of 582,922 shares of our Class A common stock under this repurchase program, at a weighted-average price of $157.13 per share, for an aggregate purchase price of approximately $91.6 million. There was approximately $508.4 million available under the 2014 repurchase authorization as of March 31, 2015. On April 15, 2015, our Board of Directors approved an increase of the 2014 repurchase authorization to $750 million. We expect to repurchase $500 million of shares within the next twelve months and to finance these repurchases through a combination of cash on hand, cash provided by operating activities, and up to $500 million of new debt. The Company also expects to use the proceeds from the refranchising initiative to repurchase shares. These repurchases would be incremental to the $500 million of planned repurchases.

Term Loan

On June 11, 2014, we entered into a term loan agreement, or the Term Loan Agreement, with Bank of America, N.A., as administrative agent, and other lenders party thereto. The Term Loan Agreement provides for an unsecured term loan, or the Term Loan, in the amount of $100 million that bears interest at a rate equal to, at our option, (1) LIBOR plus a margin ranging from 1.00 percent to 1.50 percent depending on our consolidated leverage ratio or (2) the highest of (a) the Bank of America prime rate, (b) the Federal funds rate plus 0.50 percent or (c) LIBOR plus 1.00 percent, plus a margin ranging from 0.00 percent to 0.50 percent depending on our consolidated leverage ratio. Our obligations under the Term Loan Agreement are guaranteed by certain of our direct and indirect subsidiaries. The Term Loan Agreement also allows us from time to time to request that the Term Loan be further increased by an amount not to exceed, in the aggregate, $150 million, subject to the arrangement of additional commitments with financial institutions acceptable to us and Bank of America and other customary terms and conditions. The Term Loan Agreement contains various financial covenants that, among other things, require us to maintain certain leverage and fixed charge coverage ratios. The Term Loan is scheduled to mature on June 11, 2019, 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, as defined in the Term Loan Agreement. As of March 31, 2015, we were, and expect to remain, in compliance with all covenant requirements under the Term Loan Agreement.

Credit Facility

On November 30, 2012, we entered into a credit agreement, or the Credit Agreement, with Bank of America, N.A. and other lenders party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $250 million and provides that we may select interest rates under the credit facility equal to (1) LIBOR plus the Applicable Rate for LIBOR loans (which is an amount ranging from 1.00 percent to 2.00 percent depending on our consolidated leverage ratio) or (2) the Base Rate (which is defined as the higher of Bank of America prime rate, the Federal funds rate plus 0.50 percent, or LIBOR plus 1.00 percent) plus the Applicable Rate for Base Rate loans (which is an amount ranging from 0.00 percent to 1.00 percent depending on our consolidated leverage ratio). Our obligations under the credit facility are guaranteed by certain of our direct and indirect subsidiaries. The 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 million, subject to the arrangement of additional commitments with financial institutions acceptable to us and Bank of America. The Credit Agreement contains various financial covenants that, among other things, require us to maintain certain leverage and fixed charge coverage ratios. The credit facility will become due on November 30, 2017, subject to acceleration

21

upon certain specified events of defaults, including breaches of representations or covenants, failure to pay other material indebtedness or a change of control, as defined in the Credit Agreement. We expect to use the proceeds from the credit facility for general corporate purposes. As of March 31, 2015, we had no balance outstanding under the Credit Agreement and we were, and expect to remain, in compliance with all covenant requirements under the Credit Agreement.

Critical Accounting Policies and Estimates

Our discussion and analysis of our consolidated 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 to actual experience 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 consolidated 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 30, 2014, we consider our policies on accounting for revenue recognition, valuation of goodwill, self-insurance, income taxes, lease obligations, and the impairment of long-lived assets 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 30, 2014.

Contractual Obligations and Other Commitments

In addition to our planned capital expenditure requirements, we have certain other contractual and committed cash obligations. Our contractual cash obligations consist of non-cancelable operating leases for our bakery-cafes, fresh dough facilities and trucks, and support centers; capital leases; purchase obligations primarily for certain commodities; and uncertain tax positions. Lease terms for our trucks are generally for five to seven years. The reasonably assured lease term for most bakery-cafe and support center leases is the initial non-cancelable lease term plus one renewal option period, which generally equates to an aggregate of 15 years. The reasonably assured lease term for most fresh dough facilities is the initial non-cancelable lease term plus one to two renewal option periods, which generally equates to an aggregate of 20 years. Lease terms generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs. Certain bakery-cafe leases provide for contingent rental (i.e. percentage rent) payments based on sales in excess of specified amounts, scheduled rent increases during the lease terms, and / or rental payments commencing on a date other than the date of initial occupancy.

Off-Balance Sheet Arrangements

As of March 31, 2015, we have guaranteed the operating leases of 18 franchisee or affiliate locations, which we account for in accordance with the accounting requirements for guarantees. These guarantees are primarily a result of the sales of Company-owned bakery-cafes to franchisees and affiliates, pursuant to which we exercised our right to assign the lease or sublease for the bakery-cafe but remain liable to the landlord for the remaining lease term in the event of a default by the assignee. These leases have terms expiring on various dates from April 30, 2015 to September 30, 2027 and potential future rental payments of approximately $15.9 million as of March 31, 2015. Our obligation from these leases will 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 requirements 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 these lease guarantees was determined by us to be insignificant individually, and in the aggregate, based on analysis of the facts and circumstances of each such lease and each such assignee's performance, and we did not believe it was probable that 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. Applicable assignees continue to have primary liability for these operating leases.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This update was issued to clarify the reporting for discontinued operations and disclosures for disposals of components of an entity. This update is effective for annual

22

and interim periods beginning after December 15, 2014. The adoption of this update did not have a material effect on our consolidated financial statements or related disclosures; however, it may impact the reporting of future discontinued operations if and when they occur.

In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2017. Early application is not permitted. This update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

In August 2014, the FASB issued Accounting Standards Update 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update requires management to evaluate whether there is substantial doubt about our ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We are currently evaluating the effect of the standard but its adoption is not expected to have an impact on our consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on our consolidated financial statements.

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 30, 2014.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2015. 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 31, 2015, our Chief Executive Officer and 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 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

23

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On July 2, 2014, a purported class action lawsuit was filed against one of our subsidiaries by Jason Lofstedt, a former employee of one our subsidiaries. The lawsuit was filed in the California Superior Court, County of Riverside. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods, and violations of California's Unfair Competition Law. 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. We believe our subsidiary has meritorious defenses to each of the claims in the lawsuit and we are prepared to vigorously defend the lawsuit. There can be no assurance, however, that our subsidiary will be successful, and an adverse resolution of the lawsuit could have a material adverse effect on our consolidated financial position and results of operations in the period in which the lawsuit is resolved. We are not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

In addition to the legal matter described above, 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 believe the ultimate resolution of these actions will have a material adverse effect on our consolidated financial position and results of operations. However, a significant increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than is currently anticipated, could materially and adversely affect 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 30, 2014, as filed with the SEC on February 20, 2015, 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 31, 2015, 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.

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

During the thirteen weeks ended March 31, 2015, we repurchased Class A common stock as follows:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2)
December 31, 2014 - January 27, 2015	—	$	—	—	$	533,402,343
January 28, 2015 - March 3, 2015	38,483	$	161.10	38,400	$	527,216,152
March 4, 2015 - March 31, 2015	117,783	$	160.76	117,001	$	508,407,090
Total	156,266	$	160.84	155,401

(1) Includes 865 shares of 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.

(2) Share repurchase authorization of up to $600 million of our Class A common stock approved by the Board of Directors and announced on June 5, 2014, pursuant to which we may repurchase shares 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 resume the status of authorized but unissued shares or may be held by us as treasury stock. The share repurchase authorization may be modified, suspended or discontinued by our Board of Directors at any time. On April 15, 2015, our Board of Directors approved an increase of the share repurchase authorization to $750 million.

24

Item 6. Exhibits

See the Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

25

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
Dated:	April 29, 2015	By:	/s/ RONALD M. SHAICH
			Ronald M. Shaich
			Chairman and Chief Executive Officer
			(principal executive officer)
Dated:	April 29, 2015	By:	/s/ MICHAEL J. BUFANO
			Michael J. Bufano
			Senior Vice President, Chief Financial Officer
			(principal financial officer)
Dated:	April 29, 2015	By:	/s/ MARK D. WOOLDRIDGE
			Mark D. Wooldridge
			VP, Controller, Chief Accounting Officer
			(principal accounting officer)

26

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 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

27

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Ronald M. Shaich, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 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 officer 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 officer 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 29, 2015	/s/ RONALD M. SHAICH
		Ronald M. Shaich
		Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael J. Bufano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 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 officer 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 officer 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 29, 2015	/s/ MICHAEL J. BUFANO
		Michael J. Bufano
		Senior Vice President, 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 31, 2015 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, we, Ronald M. Shaich, Chairman and Chief Executive Officer, and Michael J. Bufano, Senior Vice President, 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 the Report fairly presents, in all material respects, the financial condition and results of operations of Panera Bread Company.

Dated:	April 29, 2015	/s/ RONALD M. SHAICH
		Ronald M. Shaich
		Chairman and Chief Executive Officer

Dated:	April 29, 2015	/s/ MICHAEL J. BUFANO
		Michael J. Bufano
		Senior Vice President, Chief Financial Officer

XML

Accrued Expenses (Details) (USD $)	Mar. 31, 2015	Dec. 30, 2014
Payables and Accruals [Abstract]
Unredeemed gift cards, net	$ 84,629,000	$ 105,576,000
Compensation and related employment taxes	33,608,000	59,442,000
Capital Expenditures	54,757,000	56,808,000
Insurance	34,905,000	32,559,000
Taxes, other than income taxes	20,641,000	21,068,000
Taxes Payable	9,768,000	0
Fresh dough and other product operations	9,365,000	6,812,000
Utilities	5,766,000	5,527,000
Occupancy costs	6,873,000	7,263,000
Deferred Revenue	4,984,000	5,291,000
Customer Loyalty Program Liability, Current	2,644,000	2,525,000
Advertising	21,530,000	10,147,000
Other	16,442,000	20,183,000
Total	$ 305,912,000	$ 333,201,000

XML

Inventories

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	March 31, 2015		December 30, 2014
Food:
Fresh dough facilities:
Raw materials	$	3,127	$	3,413
Finished goods	543		460
Bakery-cafes:
Raw materials	12,956		15,152
Paper goods	3,118		3,786
Total	$	19,744	$	22,811

XML

Business Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2014	Dec. 30, 2014	Dec. 31, 2013
Revenues:
Total revenues	$ 648,504	$ 605,337
Segment profit:
Total segment profit	123,246	131,843
Depreciation and amortization	33,947	29,442
Unallocated General and Administrative Expenses	37,767	35,007
Pre-opening expenses	1,649	1,824
Interest expense	486	623
Other (income) expense, net	(184)	(1,212)
Income before income taxes	50,895	67,594
Capital expenditures:
Capital Expenditures	49,574	42,301
Segment Assets
Unallocated cash and cash equivalents	201,531	101,087	196,493	125,245
Unallocated trade and other accounts receivable	36,085		36,584
Unallocated property and equipment	733,820		787,294
Total assets	1,341,130		1,390,902
Company bakery cafe operations [Member]
Revenues:
Total revenues	573,676	535,549
Franchise operations [Member]
Revenues:
Total revenues	32,393	28,892
Operating Segments [Member]
Segment profit:
Depreciation and amortization	33,947
Unallocated Amount to Segment [Member]
Segment profit:
Unallocated General and Administrative Expenses	36,453	33,572
Segment Assets
Unallocated cash and cash equivalents	201,531		196,493
Unallocated trade and other accounts receivable	2,129		3,104
Unallocated property and equipment	90,431		84,224
Unallocated deposits and other	3,657		3,791
Other unallocated assets	41,143		71,030
Operating Segments [Member]
Segment Assets
Total assets	1,002,239		1,032,260
Operating Segments [Member] | Company bakery cafe operations [Member]
Revenues:
Total revenues	573,676	535,549
Segment profit:
Total segment profit	85,998	99,124
Depreciation and amortization	27,335	24,783
Capital expenditures:
Capital Expenditures	35,518	30,284
Segment Assets
Total assets	925,244		953,896
Operating Segments [Member] | Franchise operations [Member]
Revenues:
Total revenues	32,393	28,892
Segment profit:
Total segment profit	31,079	27,457
Segment Assets
Total assets	9,966		13,145
Operating Segments [Member] | Fresh dough and other product operations [Member]
Revenues:
Total revenues	90,124	86,525
Segment profit:
Total segment profit	6,169	5,262
Depreciation and amortization	2,309	2,057
Capital expenditures:
Capital Expenditures	994	2,830
Segment Assets
Total assets	67,029		65,219
Operating Segments [Member] | Corporate Administration [Member]
Segment profit:
Depreciation and amortization	4,303	2,602
Capital expenditures:
Capital Expenditures	13,062	9,187
Intersegment Eliminations [Member] | Intersegment Eliminations [Member]
Revenues:
Total revenues	$ (47,689)	$ (45,629)

XML

Commitments and Contingencies (Detail Textuals) (Guarantee of Indebtedness of Others [Member], USD $) In Millions, unless otherwise specified	Mar. 31, 2015 franchisee
Guarantee of Indebtedness of Others [Member]
Loss Contingencies [Line Items]
Franchisees guaranteed under operating leases (in franchisees)	18
Potential amount of future rental payments	$ 15.9

XML

Business Segment Information Business Segment Information (Detail Textuals)	3 Months Ended
	Mar. 31, 2015 segments
Segment Reporting [Abstract]
Maximum Delivered Cost On Fresh Dough Based On Retail Value Of End Product (as a percent)	27.00%
Segment Reporting Information Number Of Business Segments (in segments)	3

XML

Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2014
Amounts used for basic and diluted per share calculations
Net Income	$ 31,860	$ 42,395
Weighted average number of shares outstanding - basic (in shares)	26,478	27,269
Effect of dilutive stock-based employee compensation awards (in shares)	91	136
Weighted average number of shares outstanding - diluted (in shares)	26,569	27,405
Earnings per common share:
Basic (in dollars per share)	$ 1.20	$ 1.55
Diluted (in dollars per share)	$ 1.20	$ 1.55

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company’s cash equivalents of $94.5 million and $92.3 million at March 31, 2015 and December 30, 2014, respectively, were carried at fair value in the Consolidated Balance Sheets based on quoted market prices for identical securities (Level 1 inputs).

XML

Earnings Per Share (Details Textuals) (Stock Compensation Plan [Member]) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2014
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	0.1

XML

Consolidated Balance Sheets (unaudited) (USD $)	Mar. 31, 2015	Dec. 30, 2014
Current assets:
Cash and cash equivalents	$ 201,531,000	$ 196,493,000
Trade accounts receivable, net	36,085,000	36,584,000
Other accounts receivable	15,977,000	70,069,000
Inventories	19,744,000	22,811,000
Prepaid expenses and other	52,755,000	51,588,000
Deferred income taxes	32,372,000	28,621,000
Assets held for sale	53,749,000	0
Total current assets	412,213,000	406,166,000
Property and equipment, net	733,820,000	787,294,000
Other assets:
Goodwill	120,778,000	120,778,000
Other intangible assets, net	68,755,000	70,940,000
Deposits and other	5,564,000	5,724,000
Total other assets	195,097,000	197,442,000
Total assets	1,341,130,000	1,390,902,000
Current liabilities:
Accounts payable	19,238,000	19,511,000
Accrued expenses	305,912,000	333,201,000
Liabilities associated with assets held for sale	8,063,000	0
Total current liabilities	333,213,000	352,712,000
Unsecured Long-term Debt, Noncurrent	100,000,000	100,000,000
Deferred rent	61,594,000	67,390,000
Deferred income taxes	47,961,000	76,589,000
Other long-term liabilities	51,635,000	58,027,000
Total liabilities	594,403,000	654,718,000
Commitments and Contingencies (Note 8)
Common stock, $.0001 par value per share:
Treasury stock, carried at cost	(731,212,000)	(706,073,000)
Preferred Stock, $.0001 par value per share	0	0
Additional paid-in capital	219,284,000	214,437,000
Accumulated other comprehensive loss	(2,385,000)	(1,360,000)
Retained earnings	1,261,037,000	1,229,177,000
Total stockholders' equity	746,727,000	736,184,000
Total liabilities and stockholders' equity	1,341,130,000	1,390,902,000
Common Stock Class A [Member]
Common stock, $.0001 par value per share:
Common stock	3,000	3,000
Common Stock Class B [Member]
Common stock, $.0001 par value per share:
Common stock	$ 0	$ 0

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

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 of America (“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 30, 2014 (“fiscal 2014”). 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 30, 2014, as filed with the SEC on February 20, 2015. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 30, 2014 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 the Company's 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 April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This update was issued to clarify the reporting for discontinued operations and disclosures for disposals of components of an entity. This update is effective for annual and interim periods beginning after December 15, 2014. The adoption of this update did not have a material effect on the Company’s consolidated financial statements or related disclosures; however, it may impact the reporting of future discontinued operations if and when they occur.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual and interim periods beginning after December 15, 2016, which will require the Company to adopt these provisions in the first quarter of fiscal 2017. Early application is not permitted. This update permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect this guidance will have on the Company's consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect of the standard but its adoption is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements.

XML

Business Combinations and Divestitures (Details Textuals) (USD $)	2 Months Ended	3 Months Ended
	Mar. 03, 2015	Mar. 31, 2015	Apr. 01, 2014	Dec. 30, 2014
Business Acquisitions And Divestitures [Line Items]
Disposal Group, Including Discontinued Operation, Inventory, Current		$ 1,391,000
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current		52,358,000
Assets held for sale		53,749,000		0
Disposal Group, Including Discontinued Operation, Deferred Rent		6,756,000
Disposal Group, Including Discontinued Operation, Asset Retirement Obligation		1,307,000
Liabilities associated with assets held for sale		8,063,000		0
Disposal Group, Not Discontinued Operation, Loss (Gain) on Write-down		7,600,000
Impairment of Long-Lived Assets Held-for-use		3,800,000
Proceeds from refranchising	3,200,000	3,218,000	0
Gain (Loss) on Disposition of Business	$ 2,500,000
Refranchised Cafe [Domain]
Business Acquisitions And Divestitures [Line Items]
Number of bakery cafe		73
Minimum [Member] | Refranchised Cafe [Domain]
Business Acquisitions And Divestitures [Line Items]
Number of bakery cafe		50
Maximum [Member] | Refranchised Cafe [Domain]
Business Acquisitions And Divestitures [Line Items]
Number of bakery cafe		150

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 30, 2014
Bakery cafes [Abstract]
Paper goods	$ 3,118	$ 3,786
Total	19,744	22,811
Fresh dough and other product operations [Member]
Fresh dough facilities [Abstract]
Raw materials	3,127	3,413
Finished goods	543	460
Company Bakery Cafe Operations [Member]
Fresh dough facilities [Abstract]
Raw materials	$ 12,956	$ 15,152

XML

Business Combinations and Divestitures

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combinations and Divestitures

Divestitures

Refranchising Initiative

In February 2015, the Company announced a plan to refranchise approximately 50 to 150 Company-owned bakery-cafes by December 29, 2015, the end of fiscal 2015. As of March 31, 2015, the Company classified as held for sale the assets and certain liabilities of 73 Company-owned bakery-cafes the Company expects to sell during the next 12 months. During the thirteen weeks ended March 31, 2015, the Company recorded a loss on assets held for sale of $7.6 million.  The Company classifies assets as held for sale and ceases depreciation of the assets when those assets meet the held for sale criteria, as defined in GAAP. The Company also recognized impairment losses of $3.8 million during the thirteen weeks ended March 31, 2015 related to certain under-performing bakery-cafes in one of the markets for which the Company has signed letters of intent, which have been excluded from the proposed sale. The following summarizes the financial statement carrying amounts of assets and liabilities associated with the bakery-cafes classified as held for sale as of March 31, 2015 (in thousands):

	March 31, 2015
Inventories	$	1,391
Property and equipment, net	52,358
Assets held for sale	$	53,749
Deferred rent	$	6,756
Asset retirement obligation	1,307
Liabilities associated with assets held for sale	$	8,063

Assets held for sale were valued using Level 3 inputs, representing information obtained from signed letters of intent.  Costs to sell are considered in the estimates of fair value for those assets included in Assets held for sale on our Consolidated Balance Sheets.

On March 3, 2015, the Company sold substantially all of the assets of one bakery-cafe to an existing franchisee for cash proceeds of approximately $3.2 million, which resulted in a gain on sale of approximately $2.5 million.

The aforementioned loss on assets held for sale, impairment charges and gain on sale have been aggregated in a single caption entitled “Refranchising loss” in the Consolidated Statements of Comprehensive Income for the thirteen weeks ended March 31, 2015.

XML

Consolidated Balance Sheets Balance Sheet Parenthetical (USD $)	Mar. 31, 2015	Dec. 30, 2014
Capital Unit [Line Items]
Treasury Stock, Shares	5,417,010	5,260,744
Common Class A [Member]
Capital Unit [Line Items]
Common Stock, Shares Authorized	112,500,000	112,500,000
Common Stock, Shares, Issued	30,729,853	30,703,472
Common Stock, Par or Stated Value Per Share	0.0001	0.0001
Common Stock, Shares, Outstanding	25,312,843	25,442,728
Common Class B [Member]
Capital Unit [Line Items]
Common Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Shares, Issued	1,381,730	1,381,865
Common Stock, Par or Stated Value Per Share	0.0001	0.0001
Common Stock, Shares, Outstanding	1,381,730	1,381,865
Preferred Stock [Member]
Capital Unit [Line Items]
Preferred Stock, Par or Stated Value Per Share	0.0001	0.0001
Preferred Stock, Shares Authorized	2,000,000	2,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0

XML

Business Combination Business Combinations and Divestitures (Tables)

3 Months Ended

Mar. 31, 2015

Assets and Liabilities Associated with Assets Held for Sale [Abstract]

Assets and Liabilities associated with Assets Held for Sale [Table Text Block]

	March 31, 2015
Inventories	$	1,391
Property and equipment, net	52,358
Assets held for sale	$	53,749
Deferred rent	$	6,756
Asset retirement obligation	1,307
Liabilities associated with assets held for sale	$	8,063

XML

Document and Entity Information Document	3 Months Ended
	Mar. 31, 2015	Apr. 28, 2015
Document Information [Line Items]
Entity Registrant Name	Panera Bread Company
Entity Central Index Key	0000724606
Current Fiscal Year End Date	--12-29
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		25,320,196
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,381,730

XML

Inventories (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Inventories

	March 31, 2015		December 30, 2014
Food:
Fresh dough facilities:
Raw materials	$	3,127	$	3,413
Finished goods	543		460
Bakery-cafes:
Raw materials	12,956		15,152
Paper goods	3,118		3,786
Total	$	19,744	$	22,811

XML

Consolidated Statements of Operations (unaudited) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2014
Revenues:
Total revenues	$ 648,504,000	$ 605,337,000
Bakery-cafe expenses:
Cost of food and paper products	173,657,000	158,894,000
Labor	181,537,000	162,463,000
Occupancy	42,856,000	39,251,000
Other operating expenses	80,737,000	75,817,000
Total bakery-cafe expenses	478,787,000	436,425,000
Fresh dough and other product cost of sales to franchisees	36,266,000	35,634,000
Depreciation and amortization	33,947,000	29,442,000
General and administrative expenses	37,767,000	35,007,000
Pre-opening expenses	1,649,000	1,824,000
Refranchising loss	8,891,000	0
Total costs and expenses	597,307,000	538,332,000
Operating profit	51,197,000	67,005,000
Interest expense	486,000	623,000
Other (income) expense, net	(184,000)	(1,212,000)
Income before income taxes	50,895,000	67,594,000
Income taxes	19,035,000	25,199,000
Net income	31,860,000	42,395,000
Earnings Per Common Share
Basic (in dollars per share)	$ 1.20	$ 1.55
Diluted (in dollars per share)	$ 1.20	$ 1.55
Weighted average shares of common and common equivalent shares outstanding:
Weighted average number of shares outstanding - basic (in shares)	26,478	27,269
Weighted average number of shares outstanding - diluted (in shares)	26,569	27,405
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment	(1,025,000)	(394,000)
Other comprehensive loss	(1,025,000)	(394,000)
Comprehensive Income	30,835,000	42,001,000
Operating Segments [Member]
Bakery-cafe expenses:
Depreciation and amortization	33,947,000
Company Bakery Cafe Operations [Member]
Revenues:
Total revenues	573,676,000	535,549,000
Franchise Operations [Member]
Revenues:
Total revenues	32,393,000	28,892,000
Fresh dough and other product sales to franchisees [Member]
Revenues:
Total revenues	$ 42,435,000	$ 40,896,000

XML

Share Repurchase Authorization Share Repurchase Authorization (Notes)

3 Months Ended

Mar. 31, 2015

Repurchase of Equity [Abstract]

Treasury Stock [Text Block]

Share Repurchase Authorization

On June 5, 2014, the Company's Board of Directors approved a three year share repurchase authorization of up to $600 million of the Company's Class A common stock (the "2014 repurchase authorization"), pursuant to which the Company may repurchase shares 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 resume the status of authorized but unissued shares or may be held by the Company as treasury stock. The 2014 repurchase authorization may be modified, suspended, or discontinued by the Company's Board of Directors at any time. During the thirteen weeks ended March 31, 2015, we repurchased 155,401 shares under the 2014 repurchase authorization, at an average price of $160.84 per share, for an aggregate purchase price of approximately $25.0 million. As of March 31, 2015, the Company has repurchased a total of 582,922 shares of our Class A common stock under this repurchase program, at a weighted-average price of $157.13 per share, for an aggregate purchase price of approximately $91.6 million. There was approximately $508.4 million available under the 2014 repurchase authorization as of March 31, 2015. On April 15, 2015, the Company's Board of Directors approved an increase of the 2014 repurchase authorization to $750 million.

XML

Term Loan

3 Months Ended

Mar. 31, 2015

Debt Instruments [Abstract]

Debt Disclosure [Text Block]

Debt

On June 11, 2014, the Company entered into a term loan agreement (the “Term Loan Agreement”), by and among the Company, as borrower, Bank of America, N.A., as administrative agent, and other lenders party thereto. The Term Loan Agreement provides for an unsecured term loan (the "Term Loan") in the amount of $100 million that is scheduled to mature on June 11, 2019, 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 the Company, as defined in the Term Loan Agreement. The Term Loan bears interest at a rate equal to, at the Company's option, (1) LIBOR plus a margin ranging from 1.00 percent to 1.50 percent depending on the Company’s consolidated leverage ratio or (2) the highest of (a) the Bank of America prime rate, (b) the Federal funds rate plus 0.50 percent or (c) LIBOR plus 1.00 percent, plus a margin ranging from 0.00 percent to 0.50 percent depending on the Company’s consolidated leverage ratio. The Company incurred debt issuance costs of $0.2 million in connection with the issuance of the Term Loan. The debt issuance costs are being amortized to expense over the term of the Term Loan. The weighted-average interest rate of the Term Loan, excluding the amortization of debt issuance costs, was 1.17 percent for the thirteen weeks ended March 31, 2015. As of March 31, 2015, the carrying amount of the Term Loan approximates fair value as the interest rate on the Term Loan approximates current market rates (Level 2 inputs).

On November 30, 2012, the Company entered into a credit agreement (the "Credit Agreement") with Bank of America, N.A. and other lenders party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $250 million that will become due on November 30, 2017. As of March 31, 2015 and December 30, 2014, the Company had no loans outstanding under the Credit Agreement.

Both the Term Loan Agreement and the Credit Agreement contain customary affirmative and negative covenants, including covenants limiting liens, dispositions, fundamental changes, investments, indebtedness, and certain transactions and payments. In addition, the Term Loan Agreement and the Credit Agreement contain various financial covenants that, among other things, require the Company to satisfy two financial covenants at the end of each fiscal quarter: (1) a consolidated leverage ratio less than or equal to 3.00 to 1.00, and (2) a consolidated fixed charge coverage ratio of greater than or equal to 2.00 to 1.00. As of March 31, 2015, the Company was in compliance with all covenant requirements in the Term Loan Agreement and the Credit Agreement.

XML

Fair Value Measurements (Details) (Fair Value, Inputs, Level 1 [Member], USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 30, 2014
Fair Value, Inputs, Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	$ 94.5	$ 92.3

XML

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Accrued Expenses

	March 31, 2015		December 30, 2014
Unredeemed gift cards, net	$	84,629	$	105,576
Capital expenditures	54,757		56,808
Insurance	34,905		32,559
Compensation and related employment taxes	33,608		59,442
Advertising	21,530		10,147
Taxes, other than income taxes	20,641		21,068
Income taxes payable	9,768		—
Fresh dough and other product operations	9,365		6,812
Occupancy costs	6,873		7,263
Utilities	5,766		5,527
Deferred revenue	4,984		5,291
Loyalty program	2,644		2,525
Other	16,442		20,183
Total	$	305,912	$	333,201

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2015

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 31, 2015		April 1, 2014
Amounts used for basic and diluted per share calculations:
Net income	$	31,860	$	42,395
Weighted average number of shares outstanding — basic	26,478		27,269
Effect of dilutive stock-based employee compensation awards	91		136
Weighted average number of shares outstanding — diluted	26,569		27,405
Earnings per common share:
Basic	$	1.20	$	1.55
Diluted	$	1.20	$	1.55

For the thirteen weeks ended March 31, 2015 and April 1, 2014, weighted-average outstanding stock options, restricted stock, and stock-settled appreciation rights of less than 0.1 million shares, respectively, 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.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Obligations

As of March 31, 2015, the Company has guaranteed the operating leases of 18 franchisee or affiliate locations, which the Company accounted for in accordance with the accounting requirements for guarantees. These guarantees are primarily a result of the Company's sales of Company-owned bakery-cafes to franchisees and affiliates, pursuant to which the Company exercised its right to assign the lease or sublease for the bakery-cafe but remain liable to the landlord for the remaining lease term in the event of a default by the assignee. These leases have terms expiring on various dates from April 30, 2015 to September 30, 2027 and potential future rental payments of approximately $15.9 million as of March 31, 2015. The obligations from these leases will 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 requirements 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 the accounting requirements because the fair value of these lease guarantees was determined by the Company to be insignificant individually, and in the aggregate, based on an analysis of the facts and circumstances of each such lease and each such assignee's performance, and the Company did not believe it was probable that 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. Applicable assignees continue to have primary liability for these operating leases.

Legal Proceedings

On July 2, 2014, a purported class action lawsuit was filed against one of the Company's subsidiaries by Jason Lofstedt, a former employee of one of the Company's subsidiaries. The lawsuit was filed in the California Superior Court, County of Riverside. The complaint alleges, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods, and violations of California's Unfair Competition Law. 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. The Company believes its subsidiary has meritorious defenses to each of the claims in the lawsuit and is prepared to vigorously defend the lawsuit. There can be no assurance, however, that the Company's subsidiary will be successful, and an adverse resolution of the lawsuit could have a material adverse effect on the Company's consolidated financial position and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit.

In addition to the legal matter described above, the Company is subject to various legal proceedings, claims, and litigation that arise in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matter described above, is inherently uncertain. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on the Company's consolidated financial position and results of operations. However, a significant increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect its consolidated financial statements.

Other

The Company is subject to ongoing federal and state income tax audits and sales and use tax audits. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on its consolidated financial statements. However, a significant increase in the number of these audits, or one or more audits under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect the Company's consolidated financial position and results of operations. The Company believes reserves for these matters are adequately provided for in its consolidated financial statements.

XML

Business Segment Information

3 Months Ended

Mar. 31, 2015

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, pasta dishes, 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 & Cafe 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 & Cafe names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, and 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 both 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 sales, costs, and operating profit related to the sales to Company-owned bakery-cafes are eliminated in consolidation in the Consolidated Statements of Comprehensive Income.

Segment information related to the Company’s three business segments is as follows (in thousands):

	For the 13 Weeks Ended
	March 31, 2015			April 1, 2014
Revenues:
Company bakery-cafe operations	$	573,676		$	535,549
Franchise operations	32,393			28,892
Fresh dough and other product operations	90,124			86,525
Intercompany sales eliminations	(47,689		)	(45,629		)
Total revenues	$	648,504		$	605,337
Segment profit:
Company bakery-cafe operations	$	85,998		$	99,124
Franchise operations	31,079			27,457
Fresh dough and other product operations	6,169			5,262
Total segment profit	$	123,246		$	131,843
Depreciation and amortization	$	33,947		$	29,442
Unallocated general and administrative expenses	36,453			33,572
Pre-opening expenses	1,649			1,824
Interest expense	486			623
Other (income) expense, net	(184		)	(1,212		)
Income before income taxes	$	50,895		$	67,594
Depreciation and amortization:
Company bakery-cafe operations	$	27,335		$	24,783
Fresh dough and other product operations	2,309			2,057
Corporate administration	4,303			2,602
Total depreciation and amortization	$	33,947		$	29,442
Capital expenditures:
Company bakery-cafe operations	$	35,518		$	30,284
Fresh dough and other product operations	994			2,830
Corporate administration	13,062			9,187
Total capital expenditures	$	49,574		$	42,301

	March 31, 2015		December 30, 2014
Segment assets:
Company bakery-cafe operations	$	925,244	$	953,896
Franchise operations	9,966		13,145
Fresh dough and other product operations	67,029		65,219
Total segment assets	$	1,002,239	$	1,032,260
Unallocated cash and cash equivalents	$	201,531	$	196,493
Unallocated trade and other accounts receivable	2,129		3,104
Unallocated property and equipment	90,431		84,224
Unallocated deposits and other	3,657		3,791
Other unallocated assets	41,143		71,030
Total assets	$	1,341,130	$	1,390,902

“Unallocated cash and cash equivalents” relates primarily to corporate cash and cash equivalents, “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 current and deferred income taxes.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)”. This update was issued to clarify the reporting for discontinued operations and disclosures for disposals of components of an entity. This update is effective for annual and interim periods beginning after December 15, 2014. The adoption of this update did not have a material effect on the Company’s consolidated financial statements or related disclosures; however, it may impact the reporting of future discontinued operations if and when they occur.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual and interim periods beginning after December 15, 2016, which will require the Company to adopt these provisions in the first quarter of fiscal 2017. Early application is not permitted. This update permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect this guidance will have on the Company's consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect of the standard but its adoption is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying value of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The update is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material effect on the Company's consolidated financial statements.

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2015

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 31, 2015		April 1, 2014
Amounts used for basic and diluted per share calculations:
Net income	$	31,860	$	42,395
Weighted average number of shares outstanding — basic	26,478		27,269
Effect of dilutive stock-based employee compensation awards	91		136
Weighted average number of shares outstanding — diluted	26,569		27,405
Earnings per common share:
Basic	$	1.20	$	1.55
Diluted	$	1.20	$	1.55

XML

Term Loan (Details Textuals) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2015	Jun. 11, 2014	Dec. 30, 2014
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	$ 100,000,000		$ 100,000,000
Line of Credit Facility, Amount Outstanding			0
Consolidated Leverage Ratio	3.00
Consolidated Leverage Ratio Denominator	1.00
Consolidated Fixed Charge Coverage Ratio	2.00
Consolidated Fixed Charge Coverage Ratio Denominator	1.00
Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date	Jun. 11, 2019
Debt Issuance Cost		200,000
Debt Instrument, Interest Rate at Period End	1.17%
Term Loan [Member] | Fair Value, Inputs, Level 2 [Member]
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	100,000,000
Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	250,000,000
Line of Credit Facility, Expiration Date	Nov. 30, 2017
Line of Credit Facility, Amount Outstanding	$ 0
LIBOR Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
LIBOR Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
LIBOR Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Base Rate Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.00%
Base Rate Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Federal Funds Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%

XML

Consolidated Statements of Cash Flows (unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Apr. 01, 2014
Cash flows from operations:
Net income	$ 31,860,000	$ 42,395,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,947,000	29,442,000
Stock-based compensation expense	4,046,000	3,139,000
Tax benefit from stock-based compensation	(28,000)	(351,000)
Deferred income taxes	(32,379,000)	(16,325,000)
Refranchising loss	8,891,000	0
Other	458,000	297,000
Changes in operating assets and liabilities, excluding the effect of acquisitions and dispositions:
Trade and other accounts receivable, net	54,290,000	37,414,000
Inventories	1,676,000	2,688,000
Prepaid expenses and other	(1,167,000)	3,479,000
Deposits and other	160,000	(94,000)
Accounts payable	(273,000)	9,632,000
Accrued expenses	(25,059,000)	(39,096,000)
Deferred rent	772,000	(2,496,000)
Other long-term liabilities	(5,176,000)	(5,679,000)
Net cash provided by operating activities	72,018,000	64,445,000
Cash flows from investing activities:
Additions to property and equipment	(49,574,000)	(42,301,000)
Proceeds from refranchising	3,218,000	0
Proceeds from sale-leaseback transactions	2,161,000	2,709,000
Proceeds from sale of property and equipment	1,553,000	0
Net cash used in investing activities	(42,642,000)	(39,592,000)
Cash flows from financing activities:
Repurchase of common stock	(25,139,000)	(50,300,000)
Exercise of employee stock options	0	190,000
Tax benefit from stock-based compensation	28,000	351,000
Proceeds from issuance of common stock under employee benefit plans	773,000	748,000
Net cash used in financing activities	(24,338,000)	(49,011,000)
Net increase (decrease) in cash and cash equivalents	5,038,000	(24,158,000)
Cash and cash equivalents at beginning of period	196,493,000	125,245,000
Cash and cash equivalents at end of period	$ 201,531,000	$ 101,087,000

XML

Accrued Expenses

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Accrued expenses

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	March 31, 2015		December 30, 2014
Unredeemed gift cards, net	$	84,629	$	105,576
Capital expenditures	54,757		56,808
Insurance	34,905		32,559
Compensation and related employment taxes	33,608		59,442
Advertising	21,530		10,147
Taxes, other than income taxes	20,641		21,068
Income taxes payable	9,768		—
Fresh dough and other product operations	9,365		6,812
Occupancy costs	6,873		7,263
Utilities	5,766		5,527
Deferred revenue	4,984		5,291
Loyalty program	2,644		2,525
Other	16,442		20,183
Total	$	305,912	$	333,201

XML

Share Repurchase Authorization Share Repurchase Authorization (Details) (USD $)	3 Months Ended	10 Months Ended
	Mar. 31, 2015	Mar. 31, 2015	Jun. 05, 2014	Apr. 15, 2015
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 508,400,000	$ 508,400,000
2014 Repurchase Authorization [Member]
Equity, Class of Treasury Stock [Line Items]
Stock Repurchased and Retired During Period, Value	25,000,000	91,600,000
Treasury Stock Acquired, Average Cost Per Share	$ 160.84	$ 157.13
Stock Repurchased and Retired During Period, Shares	155,401	582,922
Stock Repurchase Program, Authorized Amount			600,000,000
Subsequent Event [Member] | 2014 Repurchase Authorization [Member]
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Authorized Amount				$ 750,000,000

XML

Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Business Segment Information

nformation related to the Company’s three business segments is as follows (in thousands):

	For the 13 Weeks Ended
	March 31, 2015			April 1, 2014
Revenues:
Company bakery-cafe operations	$	573,676		$	535,549
Franchise operations	32,393			28,892
Fresh dough and other product operations	90,124			86,525
Intercompany sales eliminations	(47,689		)	(45,629		)
Total revenues	$	648,504		$	605,337
Segment profit:
Company bakery-cafe operations	$	85,998		$	99,124
Franchise operations	31,079			27,457
Fresh dough and other product operations	6,169			5,262
Total segment profit	$	123,246		$	131,843
Depreciation and amortization	$	33,947		$	29,442
Unallocated general and administrative expenses	36,453			33,572
Pre-opening expenses	1,649			1,824
Interest expense	486			623
Other (income) expense, net	(184		)	(1,212		)
Income before income taxes	$	50,895		$	67,594
Depreciation and amortization:
Company bakery-cafe operations	$	27,335		$	24,783
Fresh dough and other product operations	2,309			2,057
Corporate administration	4,303			2,602
Total depreciation and amortization	$	33,947		$	29,442
Capital expenditures:
Company bakery-cafe operations	$	35,518		$	30,284
Fresh dough and other product operations	994			2,830
Corporate administration	13,062			9,187
Total capital expenditures	$	49,574		$	42,301

	March 31, 2015		December 30, 2014
Segment assets:
Company bakery-cafe operations	$	925,244	$	953,896
Franchise operations	9,966		13,145
Fresh dough and other product operations	67,029		65,219
Total segment assets	$	1,002,239	$	1,032,260
Unallocated cash and cash equivalents	$	201,531	$	196,493
Unallocated trade and other accounts receivable	2,129		3,104
Unallocated property and equipment	90,431		84,224
Unallocated deposits and other	3,657		3,791
Other unallocated assets	41,143		71,030
Total assets	$	1,341,130	$	1,390,902