Panera Bread Co (PNRA.O) reported better-than-expected quarterly earnings and issued profit forecasts above Wall Street's view, sending shares up more than 5 percent in extended trading.
The news from Panera - one of the top-performing U.S. restaurant chains - comes a week after fellow industry leaders McDonald's Corp (MCD.N) and Chipotle Mexican Grill Inc (CMG.N) turned in disappointing results and dragged down the restaurant sector.
Panera said third-quarter net income was up almost 27 percent to $36.5 million, or $1.24 per share - handily topping analysts' average estimate of $1.19 per share, according to Thomson Reuters I/B/E/S.
Revenue grew 17 percent in the quarter to $529.4 million.
Same-restaurant sales for both company and franchised Panera units were up 5.8 percent, better than the 5.1 percent increase expected by analysts polled by Consensus Metrix.
Panera also raised its fourth-quarter earnings target to $1.72 to $1.74 per share from its prior range of $1.66 to $1.70. Analysts' average estimate was at $1.70 per share.
The company set its 2013 earnings per share forecast at $6.85 to $7.00 per share. Analysts' average estimate was $6.91, according to Thomson Reuters I/B/E/S.
Chipotle and Panera both are known for reporting industry-leading growth in sales at established restaurants, but Chipotle had an edge because of its ability to hold down labor and other costs as it cranked out higher sales from its units.
Some high-profile investors say that advantage could be at risk if the popular burrito chain cannot raise prices to cover higher food costs, and if it loses market share to rivals such as Yum Brands Inc's (YUM.N) Taco Bell.
Shares of Panera rose 5.1 percent to $168.50 in extended trading on Tuesday. The stock hit an all-time high of $175.26 in early October.
The Dow Jones U.S. restaurant and bars index .DJUSRU, a basket of industry stocks, has fallen 6 percent from a week ago.
(Reporting by Lisa Baertlein in Los Angeles; editing by Matthew Lewis, Leslie Gevirtz, G Crosse)