We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Comps Decline Hurt Potbelly (PBPB) in Q4 Earnings?
Read MoreHide Full Article
Potbelly Corporation (PBPB - Free Report) is expected to release fourth-quarter 2017 results on Feb 13.
While we expect the company to record an increase in revenues driven by unit growth and sales initiatives, comps are likely to decline, given weak consumer demand coupled with food inflation.
We observe that shares of Potbelly have depreciated 8.5% over the last year against the industry’s gain of 8.5%. A challenging operating environment in the U.S. restaurants space has been affecting the company.
Revenues Likely to Grow Driven by Unit Growth
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $112 million, reflecting an increase of 9.8% when compared with the year-ago actual figure. In the third quarter, the company reported revenues of $106 million, up 2% year over year.
We expect new unit growth to contribute significantly to the anticipated top-line surge. The company is focusing on moderating company operated unit growth while accelerating franchised unit growth.
The consensus estimate for the number of franchised units at the end of the fourth quarter stands at 58, reflecting year-over-year growth of 34.9%. The number of company operated units is anticipated to be up 20.7%. The Zacks Consensus Estimate for the same is pegged at 496.
Apart from net unit growth, various sales boosting initiatives such as improved digital innovation, distinguished menu offerings and advertising and marketing strategies are likely to contribute toward the anticipated top-line growth.
Comps to Stay Under Pressure
Potbelly has been bearing the brunt of a challenging operating environment in the U.S. restaurants space, which led to lower comps in the first nine months of 2017. In fact, this difficult industry backdrop has persisted owing to weak consumer demand coupled with food inflation. This is anticipated to dent results in the fourth quarter as well.
The consensus estimate for comps decline for the fourth quarter is pegged at 4.4%. Comps had declined 4.8% in the last reported quarter.
Our Model Doesn’t Suggest a Beat
Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Potbelly’shas a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.
Stocks to Consider
Here are a few stocks that investors may consider, as our model shows that they have the right combination of elements to post some earnings beat this quarter:
Hilton (HLT - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #2 (Buy). The company is slated to report its quarterly numbers on Feb 14.
Choice Hotels (CHH - Free Report) has an Earnings ESP of +1.84% and a Zacks Rank #1. The company is slated to report its quarterly numbers on Feb 20.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Comps Decline Hurt Potbelly (PBPB) in Q4 Earnings?
Potbelly Corporation (PBPB - Free Report) is expected to release fourth-quarter 2017 results on Feb 13.
While we expect the company to record an increase in revenues driven by unit growth and sales initiatives, comps are likely to decline, given weak consumer demand coupled with food inflation.
We observe that shares of Potbelly have depreciated 8.5% over the last year against the industry’s gain of 8.5%. A challenging operating environment in the U.S. restaurants space has been affecting the company.
Revenues Likely to Grow Driven by Unit Growth
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $112 million, reflecting an increase of 9.8% when compared with the year-ago actual figure. In the third quarter, the company reported revenues of $106 million, up 2% year over year.
We expect new unit growth to contribute significantly to the anticipated top-line surge. The company is focusing on moderating company operated unit growth while accelerating franchised unit growth.
Potbelly Corporation Revenue (TTM)
Potbelly Corporation Revenue (TTM) | Potbelly Corporation Quote
The consensus estimate for the number of franchised units at the end of the fourth quarter stands at 58, reflecting year-over-year growth of 34.9%. The number of company operated units is anticipated to be up 20.7%. The Zacks Consensus Estimate for the same is pegged at 496.
Apart from net unit growth, various sales boosting initiatives such as improved digital innovation, distinguished menu offerings and advertising and marketing strategies are likely to contribute toward the anticipated top-line growth.
Comps to Stay Under Pressure
Potbelly has been bearing the brunt of a challenging operating environment in the U.S. restaurants space, which led to lower comps in the first nine months of 2017. In fact, this difficult industry backdrop has persisted owing to weak consumer demand coupled with food inflation. This is anticipated to dent results in the fourth quarter as well.
The consensus estimate for comps decline for the fourth quarter is pegged at 4.4%. Comps had declined 4.8% in the last reported quarter.
Our Model Doesn’t Suggest a Beat
Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Potbelly’shas a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.
Stocks to Consider
Here are a few stocks that investors may consider, as our model shows that they have the right combination of elements to post some earnings beat this quarter:
Domino's Pizza (DPZ - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #2 (Buy). The company is scheduled to report its quarterly numbers on Feb 20. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilton (HLT - Free Report) has an Earnings ESP of +0.13% and a Zacks Rank #2 (Buy). The company is slated to report its quarterly numbers on Feb 14.
Choice Hotels (CHH - Free Report) has an Earnings ESP of +1.84% and a Zacks Rank #1. The company is slated to report its quarterly numbers on Feb 20.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>