Jim (cont'd):


Jim:      Mr. Shaich welcome back to Mad Money...

Ron:     Hey Jim how are things in New Jersey?

Jim:      Mr. Shaich, I think that your stock did not get a fair shake honestly today… and you have made or beaten consensus seven straight times… how come you did not get any credit for your number today?

Ron:     We met our guidance. We held our guidance for the rest of the year. The reality that this stock, Jim, has went up 50% last year. It has been up in the range 20% year to date. I think the measure for a company is not its stock and its change in a stock on a given day, a given week or month, but the performance that occurs over a long period of time. A year, 5 years, and ten.

Jim:      Which is why your stock has been on my list of things to buy… because all of the others have really faltered during this period when you have done great.

Ron:     Yeah, we have had a great run. We continue to have a great run. The fundamentals are good. This was a quarter up 39%.

Jim:      You know, I sit here and I think that one of the reasons that running a public company is such a bear… something that you do not want to do… is when you deliver spectacular numbers, and your stock goes down. It is very difficult to try to justify all of the hard work that you have put in.

Ron:     Hey listen, I have been CEO of a public company for 18 years. I am the Kyle Ripkin of earnings releases 72 straight earnings releases. It goes up, it goes down. The key for us is to deliver the goods and keep focused on the customer.

Jim:      There is not an Oriole fan in the room, so I think that you really lost us with that… but if you had said the Santana, okay anyway.

Ron:     Where I live, I live in Boston now.

Jim:      Alright now one thing when I parse out the quarter… your guidance for new unit average weekly sales for Q2, now full year are 36,000 to 38,000... even though this quarter new unit average weekly sales were 41,000... that sounds like you are being conservative to me.

Ron:     Well, I think our responsibility to the street low investors is to guide fairly and then do everything in our power to beat it. And I think that we had an extraordinarily strong series of openings in this first quarter, and I do not want anyone out there to assume that that is going to continue for the full year. So we guide to a very real number of 36,000 to 38,000, delivering a very high 40% cash on cash return on investment. But we do not want to pump the stock, what we want to do is deliver over the long term.

Jim:      Well I do think that that is perfect… I do know that there was chartists out there who felt that the chart had broken… we often, I do not say we ridicule chartists, but they often give us our best opportunities to get in stocks… that is what I felt happened today to you guys… how about this, competition changing, people catching on to your strategy? Maybe that is… no.

Ron:     No, we have had the same strategy for 15 years. We have not evolved it. We have not changed it. We have stayed focused on delivering against our vision of real food served by engaging people in environments that excite people. Rooted in this artisan bread. I will say that none of the things that really matter to a company change in a week or a month or a quarter. The reality is that the things that I am focused on are the things that will affect 2010, 2011, and 2012. And if we do our jobs right, we will continue to grow and to continue to develop. And if we do that, this stock will take care of itself.

Jim:      I totally agree… I see that you brought in a head of merchandising from Godiva, senior person from Borders… I remember speaking with the management of Starbucks, when they started getting… you know they put a couple of them in Barnes & Noble… the next thing that you know we have the next leg of expansion. Godiva, Borders, anything going?

Ron:     I do not think that you should expect to see a Panera buried in a Borders or in a Godiva since Godiva is maturely smaller. I think that the reality of Panera is that we have a great concept. This dog hunts. It works everywhere in this country. We have the highest average unit of volumes of anybody within, outside of casual dining. A very high return on investment. There is a lot of opportunity for Panera. Our most dense markets, places like the central mid-west of the United States, if you extrapolate out that. There is a lot of places in this country for Panera to grow. The question is, can we keep up with the demand?

Jim:      You know because you are from Livingston, I have got a couple of malls nearby… more vacancies than I have seen… including high end malls… opportunity to be in malls where I think that Au Bon Pain does pretty well.

Ron:     As you know I co-founded Au Bon Pain. The reality is, is that Panera does not want to be dependent on that center. One of our great successes is that we have not dependent on those malls. The reality is for us we are happy to do mall locations when we have external entrances, and we can draw our own customers.

Jim:      Oh right, you can’t… you are absolutely right, you do not have external entrances in the mall that I know… it is not worth doing. Ron Shaich you are terrific. Thank you for coming on the show.

Ron:     Jim, take care of yourself.