Panera Bread may have failed to timely disclose to investors its deteriorating financial condition as management knew that existing stores were experiencing declining revenues.

This is a securities class action lawsuit against Panera Bread and certain of its officers and directors charging them with violations of the Securities Exchange Act of 1934.

Panera Bread engages in the ownership and franchising of bakery-cafes in the United States under the Panera Bread and Saint Louis Bread Company names. According to the class action complaint, throughout the Class Period, Panera Bread highlighted its increasing system-wide sales and, as a result, continuously increased its earnings guidance. Moreover, Panera Bread was rapidly opening new locations throughout the United States.

Unbeknownst to shareholders, Panera Bread's aggressive growth strategy was causing Panera Bread to experience declining sales at its existing stores. Throughout the Class Period, Panera Bread issued materially false and misleading statements and failed to disclose:

(i) that Panera Bread was experiencing negative trends in its business which were causing it to experience rising expenses and slow growth;

(ii) that Panera Bread's store expansion strategy was causing Panera Bread to yield a lower return on capital and experience a decline in sales per restaurant as Panera Bread's new store openings began to cannibalize sales from existing stores; and

(iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about Panera Bread, its prospects and revenue growth rate.

Then, on July, 26, 2006, Panera Bread announced its financial results for the second quarter of 2006, the period ended June 27, 2006. In response to this announcement, the price of Panera Bread common stock fell $7.34 per share, or approximately 12%, to close at $51.93 per share, on extremely heavy trading volume.