HIGHLIGHTS

 --  Q1 2009 operating profit up 36% over Q1 2008 --  Comparable system-wide bakery-cafe sales increased 0.7% in Q1 2009 --  Q1 2009 Company-owned new unit AWS of $41,922 --  Q2 2009 EPS target set at $0.62 to $0.66 (up 19% to 27% versus Q2     2008) --  FY 2009 EPS target re-affirmed at $2.55 to $2.71 (up 15% to 22% versus     FY 2008)      

Panera Bread Company (NASDAQ: PNRA) today reported net income of $17 million, or $0.57 per diluted share, for the first quarter ended March 31, 2009, which included the impact of a $0.01 per diluted share charge for the write-off of smallwares related to the rollout of new china. These results compare to net income of $12 million, or $0.41 per diluted share, for the first quarter ended March 25, 2008.

The Company's first quarter consolidated statements of operations and margin analysis are attached as Schedule I. The following tables set forth, for the periods indicated, certain items included in the Company's consolidated statements of operations (in thousands, except per share data and percentages):

                                          For the 13 Weeks Ended                                          ----------------------                                           March 31,   March 25,  Percentage                                             2009        2008       Change                                          ----------  ----------  --------- Total revenue                            $  320,709  $  304,978         5% Net income                               $   17,432  $   12,440        40% Diluted earnings per share               $     0.57  $     0.41        39% Shares used in diluted EPS                   30,737      30,177 

First Quarter Fiscal 2009 Business Review

Comparable Bakery-Cafe Sales Growth

In the first quarter of fiscal 2009, comparable system-wide bakery-cafe sales increased 0.7% versus the comparable period in fiscal 2008 (0.3% in Company-owned and 1.0% in franchise-operated comparable bakery-cafes). These first quarter comparable sales results were impacted positively by approximately 0.5% from the shift of the Easter holiday from the first quarter of fiscal 2008 to the second quarter of fiscal 2009. Thus, excluding the impact of the Easter shift the Company experienced essentially flat comparable bakery-cafe sales growth for the first quarter of fiscal 2009. Similarly, net of the impact from the Easter shift, the Company and its franchisees experienced essentially flat comparable bakery-cafe sales growth in the first several weeks of the second quarter of fiscal 2009.

The comparable Company-owned bakery-cafe sales growth of 0.3% in the first quarter of fiscal 2009 included the following year-over-year components: transaction decline of (1.6)% and average check growth of 1.9%. Average check growth in turn was comprised of retail price increases of 4.0% and negative mix impact of (2.1)%.

In terms of the Company's core operating metrics relative to original expectations, the Company experienced less average check growth than expected as a result of weakness in year-over-year sales in the Company's high average-check catering business. On the other hand, the Company performed significantly better than expected on its transaction metric as a result of the success of the Company's first quarter 2009 breakfast initiatives. The net impact of these countervailing forces was that the Company's overall comparable bakery-cafe sales growth (the best measure for gross profit dollar growth) was in-line with its original targets.

Operating Margin Improvement

In the first quarter of fiscal 2009, the Company generated operating margin improvement of approximately 200 basis points compared to the first quarter of fiscal 2008. This was primarily a result of the year-over-year benefits in wheat costs and franchise dough price increases implemented in fiscal 2008, the Company's continuing category management initiatives, and favorable comparisons against one-time charges in the first quarter of fiscal 2008.

New Unit AWS and Development

In the first quarter of fiscal 2009, average weekly sales ("AWS") for Company-owned new units improved to $41,922 compared to $39,083 in the first quarter of fiscal 2008. A schedule of the Company's first quarter fiscal 2009 AWS is attached as Schedule II.

During the first quarter of fiscal 2009, the Company and its franchisees opened 14 new bakery-cafes system-wide, resulting in 1,335 bakery-cafes open system-wide as of March 31, 2009. The breakdown of Company-owned and franchise-operated bakery-cafes is as follows:

                                           Company-   Franchise     Total                                            owned      operated     System                                          ---------   ---------   --------- Bakery-cafes as of December 30, 2008           562         763       1,325 Bakery-cafes opened                              4          10          14 Bakery-cafes closed                             (2)         (2)         (4)                                          ---------   ---------   --------- Bakery-cafes as of March 31, 2009              564         771       1,335 

Full Year and Second Quarter 2009 Outlook

Re-Affirming Full Year Fiscal 2009 Targets

The Company today is re-affirming its earnings per diluted share target for fiscal year 2009 at $2.55 to $2.71 per diluted share, compared to earnings per diluted share of $2.22 in fiscal year 2008. If the Company meets its target, it would generate diluted earnings per share growth of 15% to 22% in fiscal year 2009. The fiscal year 2009 diluted earnings per share target includes the following key assumptions adjusted to reflect a change in view on transaction and mix targets:

Comparable Bakery-Cafe Sales Growth

The Company's fiscal year 2009 target for comparable Company-owned bakery-cafe sales growth is reaffirmed at 0.5% to 2.5%; however, the Company adjusted its view regarding the components that make up this target. Consistent with the trend the Company saw in the first quarter of fiscal 2009 (significantly better transaction loss and weaker average check growth than targeted), the Company is revising its outlook for the components of its fiscal 2009 comparable bakery-cafe sales growth target to transaction decline of negative (1.5)% to (0.5)% and average check growth of 2.0% to 3.0%, with average check consisting of a year-over-year price target of approximately 3.0% (unchanged from prior targets) and a mix impact target of negative (1.0)% to 0.0%.

Operating Margin Improvement

The Company continues to target approximately 75 to 125 basis points of operating margin improvement in fiscal year 2009.

New Unit AWS and Development

The current state of the commercial real estate industry has already disrupted several planned openings for fiscal 2009 and placed others at risk. Given these conditions, the Company now expects to be at or below the low end of its prior target of 80 to 90 new unit openings system-wide in fiscal 2009. The Company continues to target AWS for Company-owned new units at $36,000 to $38,000.

Second Quarter 2009 Targets

Diluted EPS Target

For the second quarter of fiscal 2009, the Company is targeting earnings per diluted share of $0.62 to $0.66 versus $0.52 per diluted share in the second quarter of fiscal 2008. If the Company meets this target, diluted earnings per share will grow 19% to 27% in the second quarter of fiscal 2009 versus the second quarter of fiscal 2008. This second quarter of fiscal 2009 diluted earnings per share target includes the following key assumptions:

Comparable Bakery-Cafe Sales Growth

The second quarter of fiscal 2009 target assumes comparable Company-owned bakery-cafe sales decline of negative (1.0)% to 0.0%, consisting of transaction declines of between negative (2.0)% to (1.0)% and average check growth of approximately 1.0% (which in turn consists of an approximately 3.0% year-over-year price increase target and a negative mix impact target of approximately (2.0)%). Both the comparable bakery-cafe sales and the transaction targets assume (0.5)% of negative impact from the Easter shift.

Operating Margin Improvement

In the second quarter of fiscal 2009, the Company is targeting 75 to 125 basis points of improvement in operating margin as a byproduct of both its category management and cost initiatives and the expected year-over-year benefit in wheat and fuel costs.