Shares of Panera Bread dropped Thursday after the restaurant and bakery chain's outlook for the year disappointed investors.
The company said business investments, higher medical costs and increased minimum wages will squeeze its profit margins and that earnings per share could decline in 2015.
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Shares fell 9 percent in afternoon trading.
Late Wednesday, Panera reported earnings of $179.9 million, or $6.64 per share, for 2014 on $2.53 billion in revenue. The St. Louis company said its per-share profit may be about the same this year, but it could also decline by a high-single-digit percentage. It said comparable-store sales should rise 2 percent to 3.5 percent.
Industry analysts had expected the company to report a profit of $6.69 per share, according to FactSet, with sales at stores open at least a year growing 3.2 percent. Sales at locations open at least a year are considered an important measurement of performance because they exclude the volatility that comes with recently opened or closed locations.
Jefferies and Co. analyst Alexander Slagle said that while investors were probably expecting stronger profit guidance, the company is making progress on plans to jumpstart its business.
"We think results are reasonable and appear to suggest that initiatives are slowly moving the needle," he wrote. He maintained his "hold" rating on the shares.
Panera Bread has been facing slower sales growth and is making a series of changes, including revamping the way customers order and get their food. The company had 1,880 stores at the end of 2014, and it plans to open another 105 to 115 in 2015.
Shares of Panera Bread Co. fell $16 to $160.48.