Home of the You Pick Two lunch/supper combo (a cup of soup, and/or a half sandwich, and/or a half salad), Panera Bread said this morning that third-quarter revenue rose 35%, hitting $276 million. Bakery-caf sales accounted for $232 million of this amount, while franchise royalties and sales of fresh dough to franchisees made up $44 million. In September, system-wide comparable store sales edged up 0.8%. During the third quarter, 35 new bakery-cafs were opened and 2 were closed.

The restaurateur has now narrowed its third-quarter earnings-per-share guidance to 35 cents to 37 cents, shrinking from the previously projected range of 32 cents to 38 cents. Earnings are set to be reported after the close on Tuesday, October 23.

In early action, the stock is higher by more than 5.5%, gapping above its 10-day and 20-day moving averages.

If this strength persists, today's rally could light a fire under Panera short sellers, as they move to take existing profits off the table. Short interest on PNRA has grown of late, as the stock has been losing altitude beneath its 10-week and 20-week moving averages. But this decline appears to be petering out atop 40-level support, and more than 15% of the equity's float remains devoted to the short side. It would take more than 8 trading days at current daily volume levels to eradicate all of these positions.