Panera shares drop following 2Q profit report

Shares fell $2.26, or 4.4 percent, to end at $48.74.

The drop came even as the company reported a 24-percent boost in second-quarter profit, helped by higher prices and an increase in same-store sales, or sales at stores open at least a year.

Overall sales jumped 27 percent.

Panera also offered third-quarter and 2008 profit guidance above Wall Street analysts' expectations.

But in its conference call with investors, the company said current consensus estimates from Wall Street analysts may be too high for 2009.

Analysts polled by Thomson Financial expect profit between $2.40 and $2.74 per share, or between 17 percent to 21 percent growth from the company's expected 2008 profit range.

We believe these kinds of numbers are at the high end of prudent," said Chief Financial Officer Jeff Kip. "The end of the current hyperinflationary environment and broader economic recession do not appear to be near at hand."

Robert W. Baird analyst David Tarantino said in a note to investors that the company's management may be trying to keep expectations low so that it can beat them once it reports.

Tarantino holds an "Outperform" rating on the stock with a price target of $62. That implies upside of 21.6 percent over its finishing price Tuesday of $51.