Potbelly Corporation (PBPB - Free Report) through its subsidiaries, owns and operates Potbelly Sandwich Works sandwich shops in the United States. It also sells and administers franchises of Potbelly Sandwich Works sandwich shops.
Potbelly continues to develop a pipeline that will complement its core menu, while maintaining its operational efficiency. Further, the company has been using catering coordinators to manage its back-line operations and canvas business outside to drive sales. Notably, Potbelly’s continuous expansions add greatly to the top line.
Moreover, the company’s investment in technology like its new app, which was launched in the fiscal first quarter, is also expected to boost growth across its business through increased convenience. Additionally, the recent launch of its customer engagement program – Potbelly Perks – should drive traffic as it enhances consumer loyalty.
However, a soft consumer spending environment in the U.S. restaurant space, increased labor expenses as well as the company’s rising cost structure raises concern.
Investors should note that the consensus estimate for PBPB has been moving slightly downwards over the last 60 days. Nevertheless, PBPB’s earnings have been strong over the past few quarters. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 46.07%. However, revenues posted positive surprises in just one of the trailing four quarters.
PBPB currently has a Zacks Rank #4 (Sell) but that could change following Potbelly’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: PBPB misses on earnings. Our consensus earnings estimate called for earnings per share of 12 cents per share, and the company reported earnings of 11 cents per share. Investors should note that these figures take out stock option expenses.
Revenues: PBPB reported revenues of $108.1 billion. This marginally missed our consensus estimate of $108.3 million.
Key Stats to Note: In second-quarter fiscal 2017, company-operated comps decreased 4.9%.
Stock Price Impact: At the time of writing, the stock price of Potbelly was down over 1% during pre-market trading hours following the earnings release.
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