PRESS RELEASE
Contacts: Mark E. Hood
	SVP, Finance & Administration (314-633-7255)
	or
	Bill Moreton
	EVP, Chief Financial and Administrative Officer (314-633-7123)

Panera Bread Fourth Quarter Earnings Per Share Increased 56% to $0.25

HIGHLIGHTS:

— FULL YEAR 2002 EARNINGS PER SHARE INCREASED 59% TO $0.73

— FULL YEAR 2002 SYSTEM-WIDE SALES INCREASED 43% to $755.4 MILLION

— 115 BAKERY-CAFES OPENED IN 2002 AVERAGED ANNUALIZED SALES OF $1,970,000

— SYSTEM-WIDE AVERAGE ANNUALIZED UNIT VOLUMES INCREASED 5.3% TO $1,840,000

— COMPANY REITERATES 2003 EARNINGS TARGET OF $0.99, A 36% INCREASE FROM 2002

St. Louis, MO, February 25, 2003 — Panera Bread Company (Nasdaq:PNRA) today reported that net income for the 12 weeks ended December 28, 2002, increased 58% to $7,500,000 compared to $4,755,000 for the 12 weeks ended December 29, 2001. Earnings per diluted share increased 56% to $0.25 from $0.16 for the 12 weeks ended December 29, 2001. For the 52 weeks ended December 28, 2002, net income increased 65% to $21,765,000 compared to $13,152,000 for the 52 weeks ended December 29,2001. Earnings per diluted share increased 59% to $0.73 for the 52 weeks ended December 28, 2002, compared to $0.46 for the 52 weeks ended December 29, 2001.

System-wide sales and total revenues for the 12 and 52 weeks ended December 28, 2002, compared to the 12 and 52 weeks ended December 29, 2001, are as follows:

	12 Weeks Ended		12 Weeks Ended		Percentage
	December 28, 2002		December 29, 2001		Increase
System-wide sales	$	201,421,000	$	146,848,000		37	%
Total revenues	$	73,002,000	$	55,675,000		31	%

	52 Weeks Ended		52 Weeks Ended		Percentage
	December 28, 2002		December 29, 2001		Increase
System-wide sales	$	755,410,000	$	529,414,000		43	%
Total revenues	$	277,752,000	$	201,117,000		38	%

System-wide comparable bakery-cafe sales increased 4.8% for the 12 weeks ended December 28, 2002 (2.5% for company-owned and 5.8% for franchised bakery-cafes). This marks the 28th consecutive quarter that Panera Bread (on a stand-alone basis) has reported positive comparable company bakery-cafe sales. For the 52 weeks ended December 28, 2002, system-wide comparable bakery-cafe sales increased 5.5% (4.1% for company-owned and 6.1% for franchised bakery-cafes). Comparable bakery-cafe sales include those bakery-cafes that have been open for at least 18 four-week periods in the reporting period and exclude the one specialty bakery-cafe.

System-wide average weekly sales (excluding the one specialty bakery-cafe and closed locations) for the 12 weeks ended December 28, 2002, were $37,162 per week. This equates to an annualized sales volume of $1,932,000, a 4.5% increase over the same period in the prior year. A summary of bakery-cafe sales and operating weeks is as follows:

	12 Weeks Ended		12 Weeks Ended		Percentage
	December 28, 2002		December 29, 2001		Increase
Average weekly bakery-cafe sales(1)	$	37,162	$	35,550		4.5	%
Operating weeks(1)		5,418.8		4,125.2		31.4	%

System-wide average weekly sales (excluding the one specialty bakery-cafe and closed locations) for the 52 weeks ended December 28, 2002, were $35,388 per week. This equates to an annualized sales volume of $1,840,000 a 5.3% increase over the same period in the prior year. A summary of bakery-cafe sales and operating weeks is as follows:

	52 Weeks Ended		52 Weeks Ended		Percentage
	December 28, 2002		December 29, 2001		Increase
Average weekly bakery-cafe sales(1)	$	35,388	$	33,608		5.3	%
Operating weeks(1)		21,333.2		15,719.2		35.7	%

(1)  Excludes the one specialty bakery-cafe and closed locations.

As of December 28, 2002, there were 478 Panera Bread bakery-cafes (including the one specialty bakery-cafe). During the 12 weeks ended December 28, 2002, 43 new Panera Bread bakery-cafes were opened and one bakery-cafe was closed, as follows:

	Company-owned		Franchised			Total System
Bakery-cafes as of October 5, 2002		125		311			436
Bakery-cafes opened		7		36			43
Bakery-cafes closed		—		(1	)		(1	)
Bakery-cafes as of December 28, 2002		132		346			478

The total backlog of additional franchise commitments in place as of December 28, 2002, was 491.

Business Outlook

Ron Shaich, chairman and chief executive officer, commented, “We are extremely pleased with our fourth quarter and full year 2002 results. Our 2002 earnings per share were up 59%, which came on top of the 77% increase achieved in 2001. Indeed, over the last four years we have generated a compounded annual growth rate in earnings per share of 80%.”

“We set a new company record by opening 43 bakery-cafes in the fourth quarter of 2002. Development, average unit volume growth and operating margin improvement continue to fuel our earnings growth. The fact that we increased the number of units in the Panera system by 32% in 2002, and that the 115 bakery-cafes opened last year attained average annualized unit volumes of almost $2.0 million while generating a 160 basis point improvement in operating margins speaks to the quality of execution by Panera associates and our franchise partners. In addition, our success in 2002 engenders the confidence of our development partners and the Company to continue the pace of growth. This will contribute significantly to the achievement of our 2003 earnings target.”

Shaich noted, “Based on targeted 2003 development activity and the strength of our volumes, we raised our 2003 earnings per share target to $0.99 in November 2002. This represents a 36% increase over the 2002 earnings per share reported today. Our target assumes earnings grow ratably each quarter in 2003 at the 36% level. This translates into quarterly earnings per share targets of $0.24, $0.18, $0.23, and $0.34, respectively. Our targeted earnings per share assumes full year comparable system-wide sales increases of 2.0-3.0%

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(consisting of flat system-wide comparable bakery-cafe sales in the first quarter, and a 3% system-wide increase for the balance of the year). It also assumes the build out of 120 new bakery-cafes (28 company owned and 92 franchised), which is only modestly greater than 2002 development activity.”

Shaich added, “First quarter system-wide comparable bakery-cafe sales to date have been negatively impacted by the more difficult winter weather in 2003 compared to 2002 in the Midwest, Northeast and Mid-Atlantic regions, as well as some cannibalization in the Company’s most deeply penetrated market, and as a result first quarter comparable system-wide sales are expected to be up 1.0% - 2.0%. Nonetheless, based on the average unit volumes being generated and the operating margin leverage being driven by the growth in the system, the Company is very comfortable it will meet its first quarter earnings target of $0.24.”

Shaich concluded, “In 2003 Panera Bread should exceed $1 billion in system-wide sales. We are excited to reach that milestone but know the potential is far greater. We believe we are in the early stages of our build out, as we are operating in only 60% of the United States, and in many of our markets we are relatively immature in our penetration. We continue to invest in the Panera concept as we seek to deliver an experience that is truly special and warrants the sales volumes we are generating across our system. We know that if we do so, the future for Panera Bread is indeed very bright.”

The company will host a conference call today, February 25, 2003, at 1:00 p.m. Central Standard Time which will include a discussion of its financial results for the fourth quarter ended December 28, 2002. You may access the call live via the internet at http://www.panerabread.com/pages/a_ir_news.php. The call will be archived there for 90 days.

Panera Bread Company owns and franchises bakery-cafes under the Panera Bread and Saint Louis Bread Co. names. The company is a leader in the emerging specialty bread/cafe category due to its unique bread combined with a quick, casual dining experience. Additional information is available on the company’s website, www.panerabread.com.

     Matters discussed in this report, including any discussion, express or implied, of the Company’s anticipated growth, operating results, and future earnings per share, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The statements, identified by the words “believe”, “positioned”, “estimate”, “project”, “target”, “continue”, “will”, “intend”, “expect”, “future”, “anticipates”, and similar expressions express management’s present belief, expectations or intentions regarding the Company’s future performance. The Company’s actual results could differ materially from those set forth in the forward-looking statements due to known and unknown risks and uncertainties and could be negatively impacted by a number of factors. These factors include but are not limited to the following: the availability of sufficient capital to the Company and the developers party to franchise development agreements within the Company; continued execution of development; obligations by franchisee groups; variations in the number and timing of bakery-cafe openings; public acceptance of new bakery-cafes; competition; national and regional weather conditions, including the impact on cost and availability of ingredients such as flour, butter, and protein products; changes in restaurant operating costs, particularly food and labor; and other factors that may affect retailers in general. These and other risks are discussed from time to time in the Company’s SEC reports, including its Form 10-K for the year ended December 29, 2001.

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Table 1

Panera Bread Company
Comparable Bakery-Cafe Sales Increases

	For the 16			For the 12			For the 12			For the 12			For the 52
	weeks ended			weeks ended			weeks ended			weeks ended			weeks ended
	April 20, 2002			July 13, 2002			October 5, 2002			December 28, 2002			December 28, 2002
Company-owned		5.3	%		4.6	%		4.0	%		2.5	%		4.1	%
Franchised		5.6	%		7.8	%		5.5	%		5.8	%		6.1	%
Total System		5.5	%		6.7	%		5.1	%		4.8	%		5.5	%

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PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)

					For the 12		For the 12			For the 52		For the 52
					weeks ended		weeks ended			weeks ended		weeks ended
					Dec. 28, 2002		Dec. 29, 2001			Dec. 28, 2002		Dec. 29, 2001
Revenues:
		Bakery-cafe sales			$	54,706	$	42,639		$	212,645	$	157,684
		Franchise royalties and fees				7,793		5,760			27,892		19,577
		Commissary sales to franchisees				10,503		7,276			37,215		23,856
				Total revenue		73,002		55,675			277,752		201,117
Costs and expenses:
		Bakery-cafe expenses:
			Cost of food and paper products			14,920		12,345			63,255		48,253
			Labor			16,213		12,439			63,172		45,768
			Occupancy			3,501		3,067			14,619		11,345
			Other operating expenses			6,859		5,149			27,971		20,729
				Total bakery-cafe expenses		41,493		33,000			169,017		126,095
	Commissary cost of sales to franchisees					9,210		6,519			33,959		21,965
	Depreciation and amortization					3,794		2,968			13,965		10,839
	General and administrative expenses					6,358		5,109			24,986		19,589
	Pre-opening expense					260		301			1,051		912
				Total costs and expenses		61,115		47,897			242,978		179,400
Operating profit						11,887		7,778			34,774		21,717
Interest (income) expense, net						7		(5	)		32		72
Other expense (income), net						20		106			287		213
Minority interest						49		8			180		8
Income before income taxes						11,811		7,669			34,275		21,424
Income taxes						4,311		2,914			12,510		8,272
Net income					$	7,500	$	4,755		$	21,765	$	13,152
Net income per common share — basic					$	.26	$	.17		$	.75	$	.47
Net income per common share — diluted					$	.25	$	.16		$	.73	$	.46
Weighted average shares of common and common equivalent shares outstanding:
		Basic				29,217		28,292			28,923		27,783
		Diluted				30,236		29,538			29,891		28,886

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PANERA BREAD COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
MARGIN ANALYSIS
(unaudited)

     The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company’s consolidated statements of operations for the period indicated. Percentages may not add due to rounding:

				For the 12			For the 12			For the 52			For the 52
				weeks ended			weeks ended			weeks ended			weeks ended
				Dec. 28, 2002			Dec. 29, 2001			Dec. 28, 2002			Dec. 29, 2001
Revenues:
	Bakery-cafe sales				74.9	%		76.6	%		76.6	%		78.4	%
	Franchise royalties and fees				10.7			10.3			10.0			9.7
	Commissary sales to franchisees				14.4			13.1			13.4			11.9
			Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
	Bakery-cafe cost of sales (1)
		Cost of food and paper products			27.3	%		29.0	%		29.7	%		30.6	%
		Labor			29.6			29.2			29.7			29.0
		Occupancy			6.4			7.2			6.9			7.2
		Other			12.5			12.1			13.2			13.1
			Total bakery-cafe expenses		75.8	%		77.4	%		79.5	%		80.0	%
Commissary cost of sales to franchisees(2)					87.7	%		89.6	%		91.3	%		92.1	%
Depreciation and amortization					5.2			5.3			5.0			5.4
General and administrative expenses					8.7			9.2			9.0			9.7
Pre-opening expense					.4			.5			.4			.5
Operating profit					16.3			14.0			12.5			10.8
Interest expenses, net					—			—			—			—
Other expense (income), net					—			.2			.1			.1
Minority interest					.1			—			.1			—
Income before income taxes					16.2			13.8			12.3			10.7
Income taxes					5.9			5.2			4.5			4.1
Net income					10.3	%		8.5	%		7.8	%		6.5	%

(1)	As a percentage of Company restaurant sales.
(2)	As a percentage of commissary sales to franchisees.

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