Panera Bread profit up despite wheat cost increases

NEW YORK (Reuters) - Sandwich shop Panera Bread Co (PNRA.O) posted higher quarterly profit on Tuesday, citing cost cuts that compensated for wheat cost increases.

The St. Louis-based company reported second-quarter net income of $16 million, or 52 cents per share, compared with its year-earlier net income of $13 million, or 39 cents per share, topping analysts' average target of 49 cents, according to Reuters Estimates.

"To deliver 33 percent earnings growth in the second quarter, despite the weak consumer environment and the hyperinflation we are experiencing in wheat and gasoline, is quite gratifying," said Chief Executive Ron Shaich.

The company absorbed about $6.25 million in wheat cost increases, net of pricing, compared with the prior year.

Total revenue rose 27 percent to $320.9 million from $253 million, compared with analysts' call for revenue of $317.9 million.

Comparable company-owned bakery-cafe sales increased 6.5 percent in the second quarter, while comparable bakery-cafe sales in franchise-operated bakery-cafes increased 4.8 percent.

The company raised its second half earnings target to $1.24 to $1.30 per share from $1.14 per share to $1.26 per share.

Panera forecast third-quarter earnings of between 42 cents per share and 44 cents per share, topping analyst estimates of 41 cents a share.

For the fourth quarter, the company sees earnings of between 82 cents per share and 86 cents per share, compared with analyst estimates of 84 cents per share.

(Reporting by Helen Chernikoff; Editing by Carol Bishopric and Anshuman Daga)