Potbelly (PBPB) Posts Preliminary Q4 Results, Metrics Improve
Potbelly Corporation PBPB provided an update on its business and financial results for the fiscal fourth quarter and fiscal year ended Dec 31, 2023. The company stated that the results are preliminary and subject to the completion of normal year-end accounting procedures and adjustments. The company expects to release its fourth-quarter fiscal 2023 results in March 2024.
For the fiscal fourth quarter, Potbelly’s prelim results reflected same-store sales growth of 5.9-6.4% compared with the previously stated guidance of 4-6% range. The upside was mainly due to an upsurge in customer traffic, supported by stronger Average Weekly Sales (AWS) that exceeded their initial estimates. Potbelly's emphasis on its Five-Pillar Strategy also contributed positively. During the quarter, the company reported AWS in the range of $24,870-$24,970. Earlier, the company had projected AWS in the range of $24,250-$24,750.
In the fiscal 2023, the company reported same-store sales growth of 11.9-12% compared with the previously stated guidance of 11.5-12% range. The company reported AWS in the range of $1.29-$1.30 million compared with the previous expectation of $1.29 million.
Other Updates
The company emphasized additional new development agreements to drive growth. During the fiscal fourth quarter, the company reported solid progress regarding the initiative, with a total commitment of 192 shops. In the third quarter of fiscal 2023, the company reported 150 development commitments.
The company continues to maintain a dynamic and robust lineup of qualified Potbelly franchise applicants. With the unique brand and well-established business fundamentals, the company is optimistic and anticipates it to be a driving factor in the upcoming periods. In the fiscal 2024, the company anticipates unit expansion to rise 10% year over year.
Price Performance
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Shares of the company gained 62.5% in the past three months compared with the industry’s 10.3% growth. The company has been benefitting from continued strength in digital engagement, strong traffic and unit expansion efforts. Also, the focus on food and marketing innovation bodes well. In the future, the company is focused on strengthening its Perks Loyalty Program by acquiring and engaging members (via involvement through tailored digital promotions and LTOs). Also, it focuses on the rollout of Potbelly Digital Kitchen across its system to drive growth. Earnings estimates for fiscal 2024 have remained unchanged in the past 30 days.
Zacks Rank & Key Picks
Potbelly currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
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The Zacks Consensus Estimate for ARCO’s 2024 sales and earnings per share (EPS) indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.
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The Zacks Consensus Estimate for SHAK’s 2024 sales and EPS suggests rises of 15.2% and 38.3%, respectively, from the year-ago period’s levels.
Brinker International, Inc. EAT carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 223.6%, on average. Shares of EAT have increased 9.4% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 6.4% and 26.2% growth, respectively, from the year-ago period’s levels.
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