CHICAGO, Nov. 03, 2022 // GLOBE NEWSWIRE // - Potbelly Corporation (NASDAQ: PBPB), (“Potbelly” or the “Company”) the iconic neighborhood sandwich shop concept, today reported financial results for the third fiscal quarter ended September 25, 2022.
Bob Wright, President and Chief Executive Officer of Potbelly Corporation, said, “We are pleased to report another quarter of strong results, driven by the continued success of our Five-Pillar Strategy and the strategic initiatives that support it. Once again, we achieved record AUVs and substantial top-line growth, driven by successful marketing campaigns including our new branding and digital marketing efforts. These initiatives included Perks and digital promotional activity, LTO product launches including the Gyro Sandwich, Pumpkin Shake, and S’mores Cookie and the benefit of strategic price increases which were implemented earlier in the quarter. Additionally, we expanded shop-level margins year-over-year despite additional inflationary pressures related to commodity costs we faced earlier in the quarter. The margin expansion we achieved was also due to the team’s ongoing focus on disciplined cost management, strategic price increases, and demand generation across shop types.”
Mr. Wright continued, “Recently, we shared the exciting news that we signed three multi-unit development deals, bringing 25 new Potbelly shops to the Tampa, Central Orlando, Florida and Central Illinois regions over the next seven to eight years. These development agreements mark the beginning of a new era for us, as we shift to a more franchise-focused organization and look to accelerate our next phase of growth by expanding the unique Potbelly brand across the country. We continue to be pleased with the pipeline of interest and activity from highly qualified franchise candidates and we look forward to announcing additional deals as they are signed.”
Steve Cirulis, Chief Financial Officer, added, “We are happy with Potbelly’s ability to produce substantial top-line growth, which was at the high end of our expectations, and shop-level margin expansion which was within our guidance range. Additionally, we are pleased by the Company’s resiliency throughout the period and our ability to exit the third quarter with momentum which has continued into the fourth quarter. Potbelly continues to enjoy strength in its digital business, as well as continued recovery in our CBD and airport shop types, giving us confidence as we approach the end of the year. We believe our strong performance will continue and expect fourth quarter revenue of between $114 to $119 million and shop-level margins of between 10% to 13%. This performance trajectory allows us to share our 2022 fiscal year goals of achieving record AUVs of between $1.14 to $1.16 million, same-store sales of between 16% to 18% and shop level margins of approximately 10%.”
A conference call and audio webcast has been scheduled for 5:00 p.m. Eastern Time today to discuss these results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call with accompanying presentation slides, available on the investor relations portion of the Company's website at www.potbelly.com. For those that cannot join the webcast, you can participate by dialing 1-833-630-1088 in the U.S. & Canada, or 1-412-317-1817 internationally.
For those unable to participate, an audio replay will be available from 8:00 p.m. Eastern Time on Thursday, November 3, 2022, through midnight November 10, 2022. To access the replay, please call 1-877-344-7529 (U.S.), 855-669-9658 (Canada), or 1-412-317-0088 (International) and enter confirmation code 2581610. A web-based archive of the conference call will also be available at the above website.
Potbelly Corporation is a neighborhood sandwich concept that has been feeding customers’ smiles with warm, toasty sandwiches, signature salads, hand-dipped shakes and other fresh menu items, customized just the way customers want them, for more than 40 years. Potbelly promises Fresh, Fast & Friendly service in an environment that reflects the local neighborhood. Since opening its first shop in Chicago in 1977, Potbelly has expanded to neighborhoods across the country - with approximately 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate over 40 shops in the United States. For more information, please visit our website at www.potbelly.com.
The following definitions apply to these terms as used throughout this press release:
We prepare our financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”). Within this press release, we make reference to EBITDA, adjusted EBITDA, adjusted diluted EPS, adjusted net income, shop-level profit, and shop-level profit margin, which are non-GAAP financial measures. The Company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.
Management uses adjusted EBITDA, adjusted net income and adjusted diluted EPS to evaluate the Company’s performance and in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. Adjusted EBITDA, adjusted net income and adjusted diluted EPS exclude the impact of certain non-cash charges and other items that affect the comparability of results in past quarters and which we do not believe are reflective of underlying business performance. Management uses shop-level profit and shop-level profit margin as key metrics to evaluate the profitability of incremental sales at our shops, to evaluate our shop performance across periods and to evaluate our shop financial performance against our competitors.
Accordingly, the Company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the Company’s operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the Company’s financial statements and footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies. For more information on the non-GAAP financial measures, please refer to the table, “Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures.”
In addition to historical information, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Forward-looking statements, written, oral or otherwise made, represent the Company’s expectation or belief concerning future events. Without limiting the foregoing, the words “believes,” “expects,” “may,” “might,” “will,” “should,” “seeks,” “intends,” “plans,” “strives,” “goal,” “estimates,” “forecasts,” “projects” or “anticipates” or the negative of these terms and similar expressions are intended to identify forward-looking statements. Forward-looking statements included in this press release may include, among others, statements relating to our future financial position and results of operations, revenue, business strategy, budgets, shop-level margins, our intention to build further on our growth momentum in the coming quarters, our expectation that we will announce our first franchising deals with candidates as well as new signed Shop Development Area Agreements, our expectation that we will make meaningful progress in Potbelly’s next phase of growth, our expectation that we will achieve record AUV’s and double-digit growth in same-store sales for full year 2022 and our expectation that our shop-level margins will be in the low double-digit range for full year 2022. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement, due to reasons including, but not limited to, risks related to the COVID-19 outbreak; compliance with our Credit Agreement covenants; competition; general economic conditions; our ability to successfully implement our business strategy; the success of our initiatives to increase sales and traffic; changes in commodity, energy and other costs; our ability to attract and retain management and employees; consumer reaction to industry-related public health issues and perceptions of food safety; our ability to manage our growth; reputational and brand issues; price and availability of commodities; consumer confidence and spending patterns; and weather conditions. In addition, there may be other factors of which we are presently unaware or that we currently deem immaterial that could cause our actual results to be materially different from the results referenced in the forward-looking statements. All forward-looking statements contained in this press release are qualified in their entirety by this cautionary statement. Although we believe that our plans, intentions and expectations are reasonable, we may not achieve our plans, intentions or expectations. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Cautionary Statement on Forward-Looking Statements” included in our most recent annual report on Form 10-K and other risk factors described from time to time in subsequent quarterly reports on Form 10-Q or other subsequent filings, all of which are available on our website at www.potbelly.com. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
SOURCE Potbelly
With a 46-year track record, 1.3M+ Avg. Gross Sales* and flexible footprints, Potbelly is a perfect addition to your portfolio. *Top 25% of franchised Potbelly shops operating during 12-period timeframe in 2022.