Panera Bread (PNRA) 8-K Panera Bread Reports Third Quarter EPS of $0.34

Exhibit 99.1

PRESS RELEASE

Contact:	Jeff Kip
	Senior Vice President, Chief Financial Officer (314-633-7289)

Panera Bread Reports Third Quarter EPS of $0.34

HIGHLIGHTS

• 38 new bakery-cafes opened in third quarter, bringing system-wide bakery-cafes open to 976

• Q4 2006 diluted EPS target of $0.67 to $0.68

• Full year 2006 diluted EPS target of $1.92 to $1.93

• Initial target for fiscal 2007 diluted EPS growth established at 22% to 26%

St. Louis, MO, October 24, 2006 — Panera Bread Company (Nasdaq:PNRA) today reported net income of $11 million, or $0.34 per diluted share, for the third quarter ended September 26, 2006. As described below, prior year results are not directly comparable to current year results, as the Company both adopted a new quarterly reporting calendar and began expensing stock options in 2006. Reported earnings per diluted share for the 12 weeks ended October 4, 2005 (third quarter 2005) was $0.37 per share. Comparable calendar earnings per diluted share inclusive of footnote stock option expense was $0.34 per share for the thirteen weeks ended September 27, 2005. A reconciliation of pro forma measurements to GAAP results is attached as Schedule ll.

For the thirty-nine weeks ended September 26, 2006, earnings per diluted share was $1.25 per share. Reported earnings per diluted share for the forty weeks ended October 4, 2005 was $1.14 per share. Comparable calendar earnings per diluted share inclusive of footnote stock option expense was $1.00 per share for the thirty-nine weeks ended September 27, 2005. Therefore, earnings per diluted share increased 25% in the first three quarters of fiscal 2006 over the comparable period in 2005.

As noted above, the Company adopted a new quarterly calendar in 2006, whereby each of its quarters include 13 weeks (4-5-4), rather than its prior calendar, which had 16 weeks in the first quarter and 12 weeks in the second, third, and fourth quarters. In addition, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”) at the beginning of its 2006 first quarter using the modified prospective transition method, and recognized $1.5 million in stock-based compensation cost related to stock options in the third quarter of 2006. Prior to the adoption of SFAS 123R in 2006, the Company did not recognize stock-based compensation costs because it accounted for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations.

The Company’s third 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):

	13 Weeks Ended		13 Weeks Ended		Percentage			12 Weeks Ended
	September 26, 2006		September 27, 2005		Increase			October 4, 2005
Total revenue	$	204,954	$	158,072		30	%	$	148,626
Net income	$	10,879	$	11,778		0.5	%(1)	$	11,669
Diluted earnings per share	$	0.34	$	0.37		0.0	%(1)	$	0.37
Shares used in diluted EPS		31,961		31,697					31,679

(1) Percentage increase in net income and diluted EPS for comparable calendar is shown inclusive of footnote stock option expense of $951,000 and $0.03, respectively, for the 13 weeks ended September 27, 2005. See Schedule II for further information.

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	39 Weeks Ended		39 Weeks Ended		Percentage			40 Weeks Ended
	September 26, 2006		September 27, 2005		Increase			October 4, 2005
Total revenue	$	596,059	$	454,117		31	%	$	466,946
Net income	$	39,943	$	34,703		27	%(2)	$	36,021
Diluted earnings per share	$	1.25	$	1.10		25	%(2)	$	1.14
Shares used in diluted EPS		32,012		31,573					31,574

(2) Percentage increase in net income and diluted EPS for comparable calendar is shown inclusive of footnote stock option expense of $3,157,000 and $0.10, respectively, for the 39 weeks ended September 27, 2005. See Schedule II for further information.

Third Quarter 2006 Review

The Company’s key metrics showed continued strength in the third quarter. During the third quarter, system-wide comparable bakery-cafe sales increased 2.8% (2.5% Company-owned and 3.0% franchise-operated) and system-wide average weekly sales increased 0.6% to $38,098. System-wide operating weeks in the third quarter totaled 12,438. During the third quarter, 38 new bakery-cafes opened system-wide (17 Company-owned and 21 franchise-operated).

As of September 26, 2006, there were 976 Panera Bread bakery-cafes open. The breakdown of bakery-cafes by Company-owned and franchise-operated is as follows:

	Company-owned			Franchise-operated		Total System
Bakery—cafes as of June 27, 2006		337			602		939
Bakery—cafes opened		17			21		38
Bakery—cafes closed		(1	)		—		(1	)
Bakery—cafes as of September 26, 2006		353			623		976

During the third quarter, the Company incurred significant operational and advertising costs in support of its evening daypart initiative across its Company-owned stores. Consistent with prior guidance, the Company estimates that the impact of this rollout on its total bakery-cafe expenses as a percentage of bakery-cafe sales was approximately 225 basis points, spread across cost of food and paper products, labor and other operating expenses. Also consistent with prior guidance, the national marketing component of the rollout included in general and administrative expenses was 50 basis points as a percentage of total revenue. Further, the third quarter results reflect increased legal costs related to the resolution of a litigation matter that was resolved favorably in the third quarter. This had an adverse impact of approximately 40 basis points on general and administrative expenses as a percentage of total revenue.

Business Outlook — Q4 2006

The Company today established its fourth quarter 2006 earnings per diluted share target at $0.67 to $0.68, which would represent an increase of 29% to 31% over the comparable period in 2005 ($0.52 inclusive of footnote stock option expense in the 2005 period). The Company expects new bakery-cafe openings in the fourth quarter to be at least 57 (26 Company-owned and 31 franchise-operated). The fourth quarter target assumes fourth quarter system-wide comparable bakery-cafe sales growth of 3.0% to 5.0%. The Company has established its fourth quarter comparable sales target based on its present expectation that system-wide comparable bakery-cafe sales for the first four-week period of quarter four (four weeks ending October 24, 2006) will be in the range of 2.8% to 3.0%. The Company further expects fourth quarter system-wide average weekly sales of $40,750 to $41,500 and operating weeks in the range of 13,000 to 13,050.

If the Company achieves its fourth quarter targets, its fiscal 2006 full year earnings per diluted share would be $1.92 to $1.93, an increase of 26% to 27% over fiscal year 2005 ($1.52 inclusive of footnote stock option expense), and its full-year 2006 key metrics would be as follows: at least 160 total new bakery-cafe openings (70

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Company-owned and 90 franchise-operated), system-wide comps of 4.4% to 5.0% (two-year comps of 12.2% to 12.8%), system-wide average weekly sales of $39,250 to $39,500, and 48,862 to 48,912 operating weeks.

Business Outlook — FY 2007

The Company today is establishing its initial growth target for fiscal 2007 earnings per diluted share at 22% to 26%. The assumptions on key metrics underlying the 2007 target are new bakery-cafe development of 170 to 180, system-wide comparable bakery-cafe sales growth of 2.0% to 4.0%, system-wide average weekly sales of $39,500 to $40,500, and system-wide operating weeks of 57,000 to 57,500.

Chairman and Chief Executive Officer Ron Shaich commented: “2006 is shaping up to be another strong year, with full year earnings growth at 26% to 27%. Although we are disappointed that 2006 results are expected to be at the low end of the revised target we set in July, we are pleased to be on track to both achieve our initial targets set at this time last year and exceed our long-term EPS growth target of 25%. In addition, we believe that the development activity and concept evolution we have executed in 2007 will be instrumental in helping us meet our earnings growth targets for the foreseeable future.”

Note regarding historical AWS performance

In response to media comments regarding new unit average weekly sales (AWS) performance, the Company has attached Schedule III, which shows the performance of its new units each year for the last eight years and the performance of those units in the third full year after the year in which those units opened. The schedule shows that (1) the Company’s new units in 2006 are performing, on a year-to-date basis, at approximately the same level as new units in prior years, and that (2) new units have consistently increased approximately $4,000 (or about 10.5%) per week from the opening year to the third full year of operation. Based on this data, management believes that new units opened in 2006 will perform consistently with those in prior classes.

The Company will discuss third quarter 2006 results in a conference call that will be broadcast on the Internet at 8:30 A.M. Eastern Time on Wednesday, October 25, 2006. To access the call or view a copy of this release (when issued), go tohttp://www.panerabread.com/investor. Access to the call and the release will be archived for one year.

Included above are franchised and system-wide comparable bakery-cafe sales increases. System-wide sales are a non-GAAP financial measure that includes sales at all Company bakery-cafes and franchise bakery-cafes, as reported by franchisees. Management uses system-wide sales information internally in connection with store development decisions, planning, and budgeting analyses. Management believes system-wide sales information is useful in assessing consumer acceptance of the Company’s brand and facilitates an understanding of financial performance as the Company’s franchisees pay royalties and contribute to advertising pools based on a percentage of their sales.

Panera Bread Company owns and franchises 976 bakery-cafes under the Panera Bread^® and Saint Louis Bread Co.^® names. With its identity rooted in handcrafted, fresh-baked, artisan bread, Panera Bread is committed to providing great tasting, quality food that people can trust. Highlighted by antibiotic free chicken, whole grain bread, select organic and all-natural ingredients and a menu free of man-made trans fat, Panera’s bakery-café selection offers flavorful, wholesome offerings. The menu includes a wide variety of year-round favorites, complemented by new items introduced seasonally with the goal of creating new standards in everyday food choices. In neighborhoods across the country, guests are enjoying Panera’s warm and welcoming environment featuring comfortable gathering areas, relaxing decor, and free internet access provided through a managed WiFi network. At the close of each day, Panera Bread bakery-cafes donate bread and baked goods to community organizations in need. Additional information is available on the Company’s website,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. These statements are often identified by the words “believe”, “positioned”, “estimate”, “project”, “target”,

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“continue”, “intend”, “expect”, “future”, “anticipates”, and similar expressions. 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. Forward-looking information expresses 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: inability to execute our growth strategy, including, among other things, variations in the number, timing, and successful nature of Company-owned and franchise-operated bakery-cafe openings and continued successful operation of bakery-cafes; failure to comply with government regulations; loss of a member of senior management; inability to recruit qualified personnel; failure or inability to protect our brand, trademarks, or other proprietary rights; competition; rising insurance costs; disruption in our supply chain or increases in ingredient, product, or other supply costs; disruptions or supply issues in our fresh dough facilities; health concerns about the consumption of certain products; complaints and litigation; risks associated with the acquisition of franchise-operated bakery-cafes; other factors, some of which may be beyond our control, effecting our operating results; and other factors that may affect restaurant owners or 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, 2005 and its quarterly reports onForm 10-Q.

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Schedule I

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

	13 Weeks Ended			12 Weeks Ended			13 Weeks Ended
	September 26, 2006			October 4, 2005			September 27, 2005
							(Pro forma) (1)
Revenues:
Bakery-cafe sales	$	165,098		$	116,522		$	123,965
Franchise royalties and fees		15,134			12,629			13,426
Fresh dough sales to franchisees		24,722			19,475			20,681
Total revenue		204,954			148,626			158,072
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products		49,987			34,190			36,914
Labor		52,122			35,310			37,945
Occupancy		12,278			8,289			8,841
Other operating expenses		24,619			16,930			17,588
Total bakery-cafe expenses		139,006			94,719			101,288
Fresh dough cost of sales to franchisees		20,333			16,502			17,585
Depreciation and amortization		11,325			7,947			8,662
General and administrative expenses		16,593			10,369			11,083
Pre-opening expenses		1,457			965			1,348
Total costs and expenses		188,714			130,502			139,966
Operating profit		16,240			18,124			18,106
Interest expense		4			9			9
Other (income) expense, net		(896	)		(261	)		(451	)
Income before income taxes		17,132			18,376			18,548
Income taxes		6,253			6,707			6,770
Net income	$	10,879		$	11,669		$	11,778
Basic net income per share	$	0.35		$	0.38		$	0.38
Diluted net income per share	$	0.34		$	0.37		$	0.37	(2)
Shares used in calculation of basic EPS		31,338			30,997			30,990
Shares used in calculation of diluted EPS		31,961			31,679			31,697

(1)

As previously reported, the Company adopted a new quarterly calendar beginning fiscal 2006 whereby each of its quarters include 13 weeks (4 week, 5 week, and 4 week period progressions in each quarter), rather than its previous quarterly calendar which had 16 weeks in the first quarter and 12 weeks in the second, third and fourth quarters (4 week period progressions in each quarter). As such, for the third quarter of fiscal 2006, the statements above present the consolidated statement of operations of the Company for the 13 weeks ended September 26, 2006. For the third quarter of fiscal 2005, the statements above present the consolidated statement of operations of the Company for the 12 weeks ended October 4, 2005 and the pro forma consolidated statement of operations of the Company for the 13 weeks ended September 27, 2005, as if the new quarterly calendar had been adopted for the third quarter of fiscal 2005.

(2)

Prior to the adoption of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”), in fiscal 2006, the Company elected to follow the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, and provide the required pro forma disclosure in the footnotes to the financial statements as if the measurement provisions had been adopted. Accordingly, no compensation costs have been recognized in the consolidated statements of operations for stock option plans prior to fiscal 2006. Under the new quarterly calendar, stock-based compensation costs related to stock option plans would have decreased the pro forma earnings per diluted share by $0.03 for the third quarter of fiscal 2005. See Schedule II for further information.

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Schedule I (continued)

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

	39 Weeks Ended			40 Weeks Ended			39 Weeks Ended
	September 26, 2006			October 4, 2005			September 27, 2005
							(Pro forma) (1)
Revenues:
Bakery-cafe sales	$	477,329		$	362,428		$	352,360
Franchise royalties and fees		44,948			40,155			39,088
Fresh dough sales to franchisees		73,782			64,363			62,669
Total revenue		596,059			466,946			454,117
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products		141,944			103,761			101,317
Labor		147,577			110,831			108,233
Occupancy		34,797			26,475			25,545
Other operating expenses		67,138			51,859			50,306
Total bakery-cafe expenses		391,456			292,926			285,401
Fresh dough cost of sales to franchisees		62,849			55,893			54,406
Depreciation and amortization		32,050			24,481			23,843
General and administrative expenses		45,441			34,165			33,182
Pre-opening expenses		3,941			3,140			3,150
Total costs and expenses		535,737			410,605			399,982
Operating profit		60,322			56,341			54,135
Interest expense		10			37			36
Other (income) expense, net		(2,591	)		(422	)		(551	)
Income before income taxes		62,903			56,726			54,650
Income taxes		22,960			20,705			19,947
Net income	$	39,943		$	36,021		$	34,703
Basic net income per share	$	1.28		$	1.17		$	1.13
Diluted net income per share	$	1.25		$	1.14		$	1.10	(2)
Shares used in calculation of basic EPS		31,275			30,807			30,801
Shares used in calculation of diluted EPS		32,012			31,574			31,573

(1)

As previously reported, the Company adopted a new quarterly calendar beginning fiscal 2006 whereby each of its quarters include 13 weeks (4 week, 5 week, and 4 week period progressions in each quarter), rather than its previous quarterly calendar which had 16 weeks in the first quarter and 12 weeks in the second, third and fourth quarters (4 week period progressions in each quarter). As such, for the first three quarters of fiscal 2006, the statements above present the consolidated statement of operations of the Company for the 39 weeks ended September 26, 2006. For the first three quarters of fiscal 2005, the statements above present the consolidated statement of operations of the Company for the 40 weeks ended October 4, 2005 and the pro forma consolidated statement of operations of the Company for the 39 weeks ended September 27, 2005, as if the new quarterly calendar had been adopted for the first three quarters of fiscal 2005.

(2)

Prior to the adoption of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”), in fiscal 2006, the Company elected to follow the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, and provide the required pro forma disclosure in the footnotes to the financial statements as if the measurement provisions had been adopted. Accordingly, no compensation costs have been recognized in the consolidated statements of operations for stock option plans prior to fiscal 2006. Under the new quarterly calendar, stock-based compensation costs related to stock option plans would have decreased the pro forma earnings per diluted share by $0.10 for the first three quarters of fiscal 2005. See Schedule II for further information.

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Schedule I (continued)

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:

	13 Weeks Ended			12 Weeks Ended			13 Weeks Ended
	September 26, 2006			October 4, 2005			September 27, 2005
							(Pro forma) (1)
Revenues:
Bakery-cafe sales		80.5	%		78.4	%		78.4	%
Franchise royalties and fees		7.4			8.5			8.5
Fresh dough sales to franchisees		12.1			13.1			13.1
Total revenue		100.0	%		100.0	%		100.0	%
Costs and expenses:
Bakery-cafe expenses (2):
Cost of food and paper products		30.3	%		29.3	%		29.8	%
Labor		31.6			30.3			30.6
Occupancy		7.4			7.1			7.1
Other operating expenses		14.9			14.5			14.2
Total bakery-cafe expenses		84.2			81.3			81.7
Fresh dough cost of sales to franchisees (3)		82.2			84.7			85.0
Depreciation and amortization		5.5			5.3			5.5
General and administrative expenses		8.1			7.0			7.0
Pre-opening expenses		0.7			0.6			0.9
Total costs and expenses		92.1			87.8			88.5
Operating profit		7.9			12.2			11.5
Interest expense		—			—			—
Other (income) expense, net		(0.4	)		(0.2	)		(0.3	)
Income before income taxes		8.4			12.4			11.7
Income taxes		3.1			4.5			4.3
Net income		5.3	%		7.9	%		7.5	%

(1)	As previously reported, the Company adopted a new quarterly calendar beginning fiscal 2006 whereby each of its quarters include 13 weeks (4 week, 5 week, and 4 week period progressions in each quarter), rather than its previous quarterly calendar which had 16 weeks in the first quarter and 12 weeks in the second, third and fourth quarters (4 week period progressions in each quarter). As such, for the third quarter of fiscal 2006, the statements above present the consolidated statement of operations of the Company for the 13 weeks ended September 26, 2006. For the third quarter of fiscal 2005, the statements above present the consolidated statement of operations of the Company for the 12 weeks ended October 4, 2005 and the pro forma consolidated statement of operations of the Company for the 13 weeks ended September 27, 2005, as if the new quarterly calendar had been adopted for the third quarter of fiscal 2005.
(2)	As a percentage of Company bakery-cafe sales.
(3)	As a percentage of fresh dough sales to franchisees.

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Schedule I (continued)

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:

	39 Weeks Ended			40 Weeks Ended			39 Weeks Ended
	September 26, 2006			October 4, 2005			September 27, 2005
							(Pro forma) (1)
Revenues:
Bakery-cafe sales		80.1	%		77.6	%		77.6	%
Franchise royalties and fees		7.5			8.6			8.6
Fresh dough sales to franchisees		12.4			13.8			13.8
Total revenue		100.0	%		100.0	%		100.0	%
Costs and expenses:
Bakery-cafe expenses (2):
Cost of food and paper products		29.7	%		28.6	%		28.8	%
Labor		30.9			30.6			30.7
Occupancy		7.3			7.3			7.2
Other operating expenses		14.1			14.3			14.3
Total bakery-cafe expenses		82.0			80.8			81.0
Fresh dough cost of sales to franchisees (3)		85.2			86.8			86.8
Depreciation and amortization		5.4			5.2			5.3
General and administrative expenses		7.6			7.3			7.3
Pre-opening expenses		0.7			0.7			0.7
Total costs and expenses		89.9			87.9			88.1
Operating profit		10.1			12.1			11.9
Interest expense		—			—			—
Other (income) expense, net		(0.4	)		(0.1	)		(0.1	)
Income before income taxes		10.6			12.1			12.0
Income taxes		3.9			4.4			4.4
Net income		6.7	%		7.7	%		7.6	%

(1)	As previously reported, the Company adopted a new quarterly calendar beginning fiscal 2006 whereby each of its quarters include 13 weeks (4 week, 5 week, and 4 week period progressions in each quarter), rather than its previous quarterly calendar which had 16 weeks in the first quarter and 12 weeks in the second, third and fourth quarters (4 week period progressions in each quarter). As such, for the first three quarters of fiscal 2006, the statements above present the consolidated statement of operations of the Company for the 39 weeks ended September 26, 2006. For the first three quarters of fiscal 2005, the statements above present the consolidated statement of operations of the Company for the 40 weeks ended October 4, 2005 and the pro forma consolidated statement of operations of the Company for the 39 weeks ended September 27, 2005, as if the new quarterly calendar had been adopted for the first three quarters of fiscal 2005.
(2)	As a percentage of Company bakery-cafe sales.
(3)	As a percentage of fresh dough sales to franchisees.

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Schedule II

PANERA BREAD COMPANY
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(unaudited)

In addition to the results provided in accordance with Generally Accepted Accounting Principles (“GAAP”) throughout this release, the Company has provided non-GAAP measurements to conform 2005 results to the 2006 presentation related to the Company’s quarterly calendar change and stock option expense. As previously reported, the Company adopted a new quarterly calendar in 2006 whereby each of its quarters include 13 weeks (4-5-4), rather than its prior calendar which had 16 weeks in the first quarter and 12 weeks in the second, third, and fourth quarters. In addition, effective December 28, 2005, the beginning of the Company’s first quarter of 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”). SFAS 123R requires all stock-based compensation, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. The Company adopted this accounting treatment using the modified prospective transition method, as permitted under SFAS 123R; therefore results for prior periods have not been restated. Prior to the adoption of SFAS 123R, the Company accounted for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Accordingly, stock-based compensation was included as pro forma disclosure in the financial statement footnotes. The Company is providing the table below because management believes it provides useful information to investors regarding the Company’s results of operations by providing prior reported amounts on a basis comparable to that used in the current period. The pro forma net income and earnings per share amounts of $10,827,000 and $0.34, respectively, for the 13 weeks ended September 27, 2005 and $31,546,000 and $1.00, respectively, for the 39 weeks ended September 27, 2005 are considered “non-GAAP financial measures” under applicable SEC rules because they are adjusted to reflect the effect of the quarterly calendar change and to include stock-based compensation expense that are not included in the directly comparable measures calculated in accordance with GAAP. These non-GAAP financial measures are not a substitute for the reported GAAP measures.

The adjustments for the quarterly calendar change and stock-based compensation expense had the following effect on reported amounts (in thousands, except earnings per share):

	For the quarter ended
			Pro forma			Percentage
	September 26, 2006		October 4, 2005			Increase
Net income, as reported	$	10,879	$	11,669
Plus: Quarterly calendar change adjustment		—		109
Net income, as reported/calendar adjusted 13 weeks ended 9/27/05	$	10,879	$	11,778
Less: Stock-based compensation expense included in footnote, net of tax		—		(951	)
Net income, as reported/pro forma 13 weeks ended 9/27/05	$	10,879	$	10,827			0.5	%
Diluted earnings per share, as reported	$	0.34	$	0.37
Plus: Quarterly calendar change adjustment		—		0.00
Net income, as reported/calendar adjusted 13 weeks ended 9/27/05	$	0.34	$	0.37
Less: Stock-based compensation expense included in footnote, net of tax		—		(0.03	)
Diluted EPS, as reported/pro forma 13 weeks ended 9/27/05	$	0.34	$	0.34			0.0	%
Shares used in diluted EPS calculation		31,961		31,697

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Schedule II (continued)

PANERA BREAD COMPANY
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(unaudited)

	For the three quarters ended
			Pro forma			Percentage
	September 26, 2006		October 4, 2005			Increase
Net income, as reported	$	39,943	$	36,021
Less: Quarterly calendar change adjustment		—		(1,318	)
Net income, as reported/calendar adjusted 39 weeks ended 9/27/05	$	39,943	$	34,703
Less: Stock-based compensation expense included in footnote, net of tax		—		(3,157	)
Net income, as reported/pro forma 39 weeks ended 9/27/05	$	39,943	$	31,546			27	%
Diluted earnings per share, as reported	$	1.25	$	1.14
Less: Quarterly calendar change adjustment		—		(0.04	)
Net income, as reported/calendar adjusted 39 weeks ended 9/27/05	$	1.25	$	1.10
Less: Stock-based compensation expense included in footnote, net of tax		—		(0.10	)
Diluted EPS, as reported/pro forma 39 weeks ended 9/27/05	$	1.25	$	1.00			25	%
Shares used in diluted EPS calculation		32,012		31,573

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Schedule III

PANERA BREAD COMPANY
SUPPLEMENTAL INFORMATION ON AVERAGE WEEKLY SALES
(unaudited)

The following table sets forth average weekly sales (AWS) information for the time periods indicated.

			Third Full Year
Year of Open	Opening Year AWS		Post-Opening AWS		$ Change		% Change
1999	$	32,890	$	36,292	$	3,401		10.3	%
2000	$	34,112	$	38,726	$	4,613		13.5	%
2001	$	36,674	$	40,292	$	3,617		9.9	%
2002	$	37,892	$	41,096	$	3,204		8.5	%
Average (99-02)	$	35,392	$	39,101	$	3,709		10.5	%
2003	$	37,502	na		na		na
2004	$	35,670	na		na		na
2005	$	37,804	na		na		na
2006 *	$	35,972	na		na		na
Average (99-06)	$	36,064	na		na		na

* 2006 opens as of the end of P9 2006

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