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Potbelly Corporation (PBPB - Free Report) provided an update on its business and financial results for the first quarter of fiscal 2023. The company stated that the results are preliminary and subject to the completion of normal quarter-end accounting procedures and adjustments. The company expects to release its first quarter fiscal 2023 results in May 2023.
For the fiscal first quarter, Potbelly’s prelim results reflected shop-store sales of 22-22.3% and shop-level margins in the 11.5-12% range. Earlier, the company had anticipated shop-store sales in the range of 18.5-20.5% and shop-level margins in 10-11.5% range.
Preliminary adjusted EBITDA during the quarter is anticipated in the range of $5.2-5.6 million, up from the prior guidance of $4-5 million. Preliminary average unit volumes during the quarter came in at the range of $23,800-$23,900 (compared with the prior estimate of $23,000 to $24,000). The company anticipates fiscal 2023 same-store-sales growth in the high single to the low double-digit range.
The company anticipates surpassing previously stated guidance ranges because of strong customer demand, coupled with an emphasis on the Five-Pillar Strategy and marketing initiatives.
Other Updates
The company emphasized on the Franchise Growth Acceleration Initiative to drive growth. Despite the economic pressure on small businesses (including climbing interest rates), the company reported solid progress regarding the initiative, with 51 new shop commitments signed in the latter part of 2022. During the fiscal first quarter, the company signed a new franchise development deal in the New York City market.
Price Performance
Image Source: Zacks Investment Research
Shares of the company gained 20% in the past three months compared with the industry’s 4.3% growth. The company has been benefitting from continued strength in digital engagement, strong traffic and marketing initiatives. Also, solid recoveries of CBD locations bode well. Going forward, the company emphasizes on expanding the testing and implementation of Potbelly Digital Kitchen, to boost order accuracy and speed of service. Also, it focuses on strengthening digital engagement via targeted digital advertising, special offerings and a perks loyalty program to drive growth.
However, persistent supply chain issues, inflationary pressures and staffing challenges remain headwinds. Earnings estimates for fiscal 2023 have declined in the past 30 days, depicting analysts concern regarding the stock growth potential.
Chuy’s Holdings currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 48.7% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 19%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados currently sports a Zacks Rank #1. ARCO has a long-term earnings growth of 7.8%. Shares of the company have declined 6.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests growth of 8% and 11.4%, respectively, from the year-ago period’s levels.
Bloomin' Brands carries a Zacks Rank #2 (Buy). BLMN has a long-term earnings growth rate of 12.3%. The stock has gained 20.3% in the past year.
The Zacks Consensus Estimate for Bloomin' Brands 2024 sales and EPS suggests growth of 2.4% and 5.5%, respectively, from the year-ago period’s reported levels.
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Potbelly (PBPB) Announces Preliminary Q1 Results, Metrics Improve
Potbelly Corporation (PBPB - Free Report) provided an update on its business and financial results for the first quarter of fiscal 2023. The company stated that the results are preliminary and subject to the completion of normal quarter-end accounting procedures and adjustments. The company expects to release its first quarter fiscal 2023 results in May 2023.
For the fiscal first quarter, Potbelly’s prelim results reflected shop-store sales of 22-22.3% and shop-level margins in the 11.5-12% range. Earlier, the company had anticipated shop-store sales in the range of 18.5-20.5% and shop-level margins in 10-11.5% range.
Preliminary adjusted EBITDA during the quarter is anticipated in the range of $5.2-5.6 million, up from the prior guidance of $4-5 million. Preliminary average unit volumes during the quarter came in at the range of $23,800-$23,900 (compared with the prior estimate of $23,000 to $24,000). The company anticipates fiscal 2023 same-store-sales growth in the high single to the low double-digit range.
The company anticipates surpassing previously stated guidance ranges because of strong customer demand, coupled with an emphasis on the Five-Pillar Strategy and marketing initiatives.
Other Updates
The company emphasized on the Franchise Growth Acceleration Initiative to drive growth. Despite the economic pressure on small businesses (including climbing interest rates), the company reported solid progress regarding the initiative, with 51 new shop commitments signed in the latter part of 2022. During the fiscal first quarter, the company signed a new franchise development deal in the New York City market.
Price Performance
Image Source: Zacks Investment Research
Shares of the company gained 20% in the past three months compared with the industry’s 4.3% growth. The company has been benefitting from continued strength in digital engagement, strong traffic and marketing initiatives. Also, solid recoveries of CBD locations bode well. Going forward, the company emphasizes on expanding the testing and implementation of Potbelly Digital Kitchen, to boost order accuracy and speed of service. Also, it focuses on strengthening digital engagement via targeted digital advertising, special offerings and a perks loyalty program to drive growth.
However, persistent supply chain issues, inflationary pressures and staffing challenges remain headwinds. Earnings estimates for fiscal 2023 have declined in the past 30 days, depicting analysts concern regarding the stock growth potential.
Zacks Rank & Key Picks
Potbelly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Chuy's Holdings, Inc. (CHUY - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Bloomin' Brands, Inc. (BLMN - Free Report) .
Chuy’s Holdings currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 48.7% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 19%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados currently sports a Zacks Rank #1. ARCO has a long-term earnings growth of 7.8%. Shares of the company have declined 6.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests growth of 8% and 11.4%, respectively, from the year-ago period’s levels.
Bloomin' Brands carries a Zacks Rank #2 (Buy). BLMN has a long-term earnings growth rate of 12.3%. The stock has gained 20.3% in the past year.
The Zacks Consensus Estimate for Bloomin' Brands 2024 sales and EPS suggests growth of 2.4% and 5.5%, respectively, from the year-ago period’s reported levels.