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•		Second Quarter revenues up 31%.

•		Second Quarter 2004 earnings per diluted share up 11%.

•		32 new bakery-cafes opened in Q2 bringing YTD 2004 new bakery-cafes opened to 68.

•		Comparable bakery-cafe sales for the 4 weeks ended July 10, 2004 increased 3.1% for company stores, 2.6% for franchise stores, and 2.7% for the system as a whole.

•		2004 earnings per share target range adjusted to $1.24 to $1.28, a 23% to 27% increase over 2003.

•		2005 new bakery-cafe openings targeted at 150 to 160 units, a 20% increase.

St. Louis, MO, August 5, 2004 – Panera Bread Company (Nasdaq:PNRA) today reported that earnings per diluted share increased 11% to $0.21 for the 12 weeks ended July 10, 2004 compared to $0.19 per diluted share for the 12 weeks ended July 12, 2003. Net income for the 12 weeks ended July 10, 2004 increased 13% to $6,446,000 compared to $5,691,000 for the same period in the prior year.

For the 28 weeks ended July 10, 2004, earnings per diluted share increased 18% to $0.52 compared to $0.44 for the 28 weeks ended July 12, 2003. Net income for the 28 weeks ended July 10, 2004 increased 20% to $15,913,000 compared to $13,234,000 for the 28 weeks ended July 12, 2003. Prior year results are stated before the cumulative effect of a change in accounting principle relating to the adoption of SFAS 143, “Accounting for Asset Retirement Obligations.” In the 16 weeks ended April 19, 2003, the Company recorded an after tax charge of $0.2 million, or $0.01 per diluted share to record the cumulative effect of this accounting change.

Company and franchisee revenues for the 12 and 28 weeks ended July 10, 2004, compared to the 12 and 28 weeks ended July 12, 2003, were as follows:

Comparable bakery-cafe sales for the 4, 12 and 28 weeks ended July 10, 2004 were as follows (comparable bakery-cafes include those bakery-cafes that have been open for at least 18 four-week periods):

System-wide average weekly sales for the 12 weeks ended July 10, 2004, were $35,123 per week, an increase of 0.6% over average weekly sales of $34,919 for the same period in the prior year. A summary of bakery-cafe average weekly sales and operating weeks is as follows:

System-wide average weekly sales for the 28 weeks ended July 10, 2004, were $35,133 per week, an increase of 0.8% over average weekly sales of $34,866 for the same period in the prior year. A summary of bakery-cafe average weekly sales and operating weeks is as follows:

As of July 10, 2004, there were 669 Panera Bread bakery-cafes open. During the 12 weeks ended July 10, 2004, 32 new bakery-cafes were opened. The breakdown of bakery-cafes by company-owned and franchised is as follows:

The company’s earnings per diluted share target for the second quarter of 2004 was $0.21 to $0.22. This target assumed the following system-wide key performance metrics: annualized average unit volumes for new bakery-cafes of $1.85 to $1.95 million; comparable store sales increase of 1% to 3%; development for the year of 140 to 150 new bakery-cafes, including 45 to 55 new company-owned bakery-cafes, and restaurant margins 90-170 basis points below prior year.

In the second quarter of 2004, the company earned $0.21 per diluted share with the following system-wide performance on key metrics: 2004 new unit annualized average unit volumes of $1.92 million (the company has adjusted its annualized unit volume calculation for 2004 openings to exclude the first four weeks of new bakery-cafe results, effectively moderating the impact of store “grand opening” weeks and lowering the calculated AUV), comp store sales growth of 1.9%, and 32 new bakery-cafes opened in the quarter including 13 new company-owned bakery-cafes (more than triple the 4 new company-owned bakery-cafes opened in Q2 2003).

Performance on the key metrics of new bakery-cafe average unit volume, comp store sales and new bakery-cafe openings was at or above the middle of their respective target ranges. The company’s margins were at the low end of the expected range, with restaurant margin 170 basis points below the prior year. The decrease in restaurant margins resulted from expected inefficiencies resulting from opening significantly more company bakery-cafes in Q2 2004 vs. Q2 2003 and new markets operating without multi-unit leverage. Furthermore, anticipated food cost improvements from leveraging the fresh dough manufacturing and distribution system were largely offset by higher fuel costs.

As per its previously stated policy on quarterly earnings releases, the company is today updating its earnings target for the full year and providing its earnings target for the next quarter of 2004.

The company is adjusting its earnings per diluted share target range for 2004 to $1.24-$1.28. This revised target earnings per share range assumes new bakery-cafe annualized average volumes of between $1.85 million to $1.95 million, comparable store sales increases of 2% to 4% in the second half of the year, and new bakery-cafe development at the high end of the 140-150 bakery-cafe target range.

The company has adjusted downward its 2004 earnings per diluted share target despite expected performance on its key metrics at the mid- to upper point of their ranges to reflect what is now lower than anticipated improvement in inefficiencies incurred in opening a new bakery-cafe. In addition, the expectation that the company will now open 55 bakery-cafes, the upper limit of the 45 to 55 target range, will result in lower 2004 earnings than previously expected because of the added startup inefficiencies of the additional five bakery-cafes. Fuel, roast beef and ham costs are also expected to be higher than earlier projections. This will be modestly offset by butter expenses now anticipated to be lower than earlier projections.

The company expects third quarter earnings per diluted share will be in the range of $0.27 to $0.29 per share, an increase of 17% to 26% from third quarter 2003. Third quarter results will continue to be affected by commodity cost pressures previously discussed and start-up inefficiencies related to the increased number of company bakery-cafes expected to open. The company expects third quarter company bakery-cafe openings will be approximately 19 compared to 5 in the third quarter of 2003.

Ron Shaich, chairman and chief executive officer, commented: “2004 will be a year in which revenue growth will exceed 30% but earnings per diluted share are now expected to grow 23% to 27%. In past years we have become accustomed to operating leverage driving earnings growth faster than revenue growth. In 2004 very significant commodity cost increases and the inefficiencies created by almost doubling the number of company bakery-cafe openings effectively neutralized that operating leverage. Looking forward to 2005, we believe as commodity prices stabilize, and the percentage change in new company bakery-cafe openings moderates, earnings will once again expand at a faster rate than revenue.”

Shaich continued: “Our strong performance in 2004 on our key metrics of average unit volume, new store development and comparable store sales provides confidence in our business. We are today establishing a development target of 150 to 160 new bakery-cafes in 2005, representing a 20% increase over the number of bakery-cafes expected to be open at the end of this year.”

The Company will discuss these results in a conference call today, at 3:00 PM Central Daylight Time. To access the call or view a copy of this release, which will be archived for one year, go to http://www.panerabread.com/about_investor.aspx.

Panera Bread Company owns and franchises bakery-cafes under the Panera Bread and Saint Louis Bread Co. names. Additional information is available on the company’s website, www.panerabread.com.

Matters discussed in this news release, including any discussion or impact, express or implied, on 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. All forward-looking statements included in this release are made only as of the date of this release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that occur or which we hereafter become aware, after that date. 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 with the Company; variations in the number and timing of bakery-cafe openings; public acceptance of new bakery-cafes; competition; national and regional weather conditions; 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 27, 2003.

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


	For the 12 weeks ended				For the 28 weeks ended
	July 10, 2004		July 12, 2003		July 10, 2004		July 12, 2003
Revenues:
Bakery-cafe sales	$	79,311	$	58,951	$	176,413	$	132,271
Franchise royalties and fees		9,946		7,886		22,237		17,832
Fresh dough sales to franchisees		16,064		13,487		36,571		31,018

Total revenue		105,321		80,324		235,221		181,121
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products		22,661		16,650		49,800		37,547
Labor		24,532		18,297		55,067		40,507
Occupancy		5,531		4,033		12,294		9,114
Other operating expenses		12,292		8,357		26,426		18,629

Total bakery-cafe expenses		65,016		47,337		143,587		105,797
Fresh dough cost of sales to franchisees		14,686		11,941		33,396		28,006
Depreciation and amortization		6,119		4,318		13,632		9,621
General and administrative expenses		8,245		7,291		17,450		15,855
Pre-opening expenses		779		227		1,406		528

Total costs and expenses		94,845		71,114		209,471		159,807
Operating profit		10,476		9,210		25,750		21,314
Interest expense		1		10		15		29
Other expense (income), net		257		156		482		323
Minority interest		67		82		193		121

Income before income taxes and cumulative effect of accounting change		10,151		8,962		25,060		20,841
Income taxes		3,705		3,271		9,147		7,607

Income before cumulative effect of accounting change	$	6,446	$	5,691	$	15,913	$	13,234
Cumulative effect to December 28, 2002 of accounting change, net of applicable tax benefit		—		—		—		(239	)

Net income	$	6,446	$	5,691	$	15,913	$	12,995

Per share data:
Basic earnings per common share:
Before cumulative effect of accounting change	$	0.21	$	0.19	$	0.53	$	0.45
Cumulative effect of accounting change	$	—	$	—	$	—	$	(0.01	)

Net income	$	0.21	$	0.19	$	0.53	$	0.44

Diluted earnings per common share:
Before cumulative effect of accounting change	$	0.21	$	0.19	$	0.52	$	0.44
Cumulative effect of accounting change	$	—	$	—	$	—	$	(0.01	)

Net income	$	0.21	$	0.19	$	0.52	$	0.43

Weighted average shares of commom and common equivalent shares outstanding
Basic		30,174		29,711		30,135		29,567
Diluted		30,771		30,495		30,727		30,267

Certain reclassifications have been made to conform previously reported data to the current presentation.

PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS 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 weeks ended						For the 28 weeks ended
	July 10, 2004			July 12, 2003			July 10, 2004			July 12, 2003
Revenues:
Bakery-cafe sales		75.3	%		73.4	%		75.0	%		73.0	%
Franchise royalties and fees		9.4			9.8			9.5			9.8
Fresh dough sales to franchisees		15.3			16.8			15.5			17.1

Total revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Bakery-cafe expenses (1):
Cost of food and paper products		28.6	%		28.2	%		28.2	%		28.4	%
Labor		30.9			31.0			31.2			30.6
Occupancy		7.0			6.8			7.0			6.9
Other operating expenses		15.5			14.2			15.0			14.1

Total bakery-cafe expenses		82.0	%		80.3	%		81.4	%		80.0	%
Fresh dough cost of sales to franchisees (2)		91.4	%		88.5	%		91.3	%		90.3	%
Depreciation and amortization		5.8			5.4			5.8			5.3
General and administrative expenses		7.8			9.1			7.4			8.8
Pre-opening expenses		0.7			0.3			0.6			0.3

Total costs and expenses		90.1			88.5			89.1			88.2

Operating profit		9.9			11.5			10.9			11.8
Interest expense		0.0			0.0			0.0			0.0
Other expense (income), net		0.2			0.2			0.2			0.2
Minority interest		0.1			0.1			0.1			0.1

Income before income taxes and cumulative effect of accounting change		9.6			11.2			10.7			11.5
Income taxes		3.5			4.1			3.9			4.2

Income before cumulative effect of accounting change		6.1			7.1			6.8			7.3
Cumulative effect to December 28, 2002 of accounting change, net of applicable tax benefit		0.0			0.0			0.0			(0.1	)

Net income		6.1	%		7.1	%		6.8	%		7.2	%

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

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


		Contact:		Mark E. Hood
				Senior Vice President, Chief Financial Officer
		Phone:		(314) 633-7255


	12 Weeks Ended		12 Weeks Ended		Percentage
	July 10, 2004		July 12, 2003		Increase
Company revenues	$	105,321,000	$	80,324,000		31	%
Franchisee revenues	$	194,324,000	$	156,109,000		24	%


	28 Weeks Ended		28 Weeks Ended		Percentage
	July 10, 2004		July 12, 2003		Increase
Company revenues	$	235,221,000	$	181,121,000		30	%
Franchisee revenues	$	442,774,000	$	355,262,000		25	%


	12 Weeks Ended		12 Weeks Ended		Percentage
	July 10, 2004		July 12, 2003		Increase
Average weekly bakery-cafe sales	$	35,123	$	34,919		0.6	%
Operating weeks		7,792		6,159		26.5	%


	28 Weeks Ended		28 Weeks Ended		Percentage
	July 10, 2004		July 12, 2003		Increase
Average weekly bakery-cafe sales	$	35,133	$	34,866		0.8	%
Operating weeks		17,627		13,981		26.1	%


	4 Weeks Ended			12 Weeks Ended			28 Weeks Ended
	July 10, 2004			July 10, 2004			July 10, 2004
Company		3.1	%		2.3	%		2.4	%
Franchisee		2.6	%		1.8	%		1.6	%

System-wide		2.7	%		1.9	%		1.8	%


	Company-owned		Franchised		Total System
Bakery-cafes as of April 17, 2004		184		453		637
Bakery-cafes opened		13		19		32
Bakery-cafes closed		—		—		—
Bakery-cafes acquired (sold)		—		—		—

Bakery-cafes as of July 10, 2004		197		472		669


	% Change Comparable Bakery-Cafe Sales						System-Wide
For the Four Weeks Ended	Company		Franchise		System-Wide		AWS		AUV
May 15, 2004		4.1		4.2		4.1	$	35,985	$	1,858,765
June 12, 2004		-0.1		-1.3		-0.9	$	34,857	$	1,855,165
July 10, 2004		3.1		2.6		2.7	$	34,550	$	1,855,491