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[video] Jim Cramer Quick Take: How to Play Panera Heading into Earnings

Tickers in this article: BWLD CMG PNRA SBUX WFM

NEW YORK (TheStreet) -- Panera Bread Company reports earnings next Wednesday. TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, likes the risk-to-reward setup heading into the report. 

Cramer said the company has struggled to keep up with competitors Chipotle Mexican Grill , Buffalo Wild Wings and Starbucks . All three of those companies have now set the earnings bar relatively high, with stronger-than-expected earnings results of their own. 

Cramer said that if Panera CEO Ron Shaich -- one of his "Bankable 21" CEOs from his new book, Get Rich Carefully -- was able to more efficiently handle lunchtime crowds, the stock could go to $200.

If Shaich fails to improve the peak hours rush efficiency, then the stock is likely headed back down to $150, he said. Either way, the stock is going to move about $25. In this regard, Cramer views it a good risk-to-reward setup with the use of call options, so the downside will be limited. 

Cramer acknowledged that even companies with solid operations can get whacked on earnings, referring to the recent results and subsequent price action of Whole Foods Market

But he concluded that investors should take a chance on Panera, perhaps by shorting the common stock and buying call options, a strategy that's highlighted in greater detail in his new book.

-- Written by Bret Kenwell in Petoskey, Mich.