Panera Hopes McDonald's Smoothie Splash Can Boost Drink Sales
July 28 2010 - 11:04AM
Dow Jones News
Panera Bread Co. (PNRA) hopes McDonald's Corp.'s (MCD) foray
into fruit smoothies can help boost its own sales of frozen drinks,
which rose 21% in Panera's latest quarter.
McDonald's recently launched smoothies have thrown unprecedented
marketing weight behind the blended fruit beverage. Chains such as
Panera and Jamba Juice Inc. (JMBA) are expecting to ride the
coattails from the burger giant's media spending to higher drink
sales.
"We believe [McDonald's smoothie marketing] offers us the
opportunity to cement our position as a high-quality leader in the
category," Panera Chief Executive Bill Moreton said Wednesday on
the company's quarterly earnings call.
McDonald's earlier move into and marketing behind premium coffee
drinks like lattes prompted similar sentiment from Starbucks Corp.
(SBUX) that the burger giant's advertising helped boost other
companies' sales.
Sales of smoothies and other icy drinks like frozen strawberry
lemonade were a boon to Panera's profit in its second quarter. The
drinks deliver a higher gross profit than other drinks on the menu,
Moreton said, and have helped boost sales during the late-afternoon
period. The drinks are also being bought as a add-on to lunch
meals.
Panera shares were recently up 66 cents, or 0.8%, in recent
trading to $79.26. Late Tuesday, Panera reported a 33% increase in
second-quarter profit, as same-store sales rose 9.9%.
The chain expects same-store sales growth to slow down a bit
during the remainder of the year, but it raised its full-year
earnings view slightly due to share repurchases.
Panera said it plans to add chili to its menu in the third
quarter and plans to begin to roll out paninis in the fourth
quarter as the bakery-cafe chain plans to make hot sandwiches more
of a focal point next year. It's also implementing a loyalty card
program in the fourth quarter, which is expected to boost
same-store sale up to 2%.
-By Paul Ziobro, Dow Jones Newswires; 212-416-2194;
paul.ziobro@dowjones.com
Jamba, Inc. (delisted) (NASDAQ:JMBA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Jamba, Inc. (delisted) (NASDAQ:JMBA)
Historical Stock Chart
From Apr 2023 to Apr 2024
