Potbelly Corporation Reports Results for Second Fiscal Quarter 2024
Potbelly (NASDAQ: PBPB) reported financial results for Q2 2024. Key highlights include:
- Average Weekly Sales increased 0.6% to $26,110
- Total revenues decreased 5.5% to $119.7 million
- Same-store sales increased 0.4%
- GAAP net income was $34.7 million, with diluted EPS of $1.13
- Adjusted EBITDA increased 5.9% to $8.5 million
The company opened 4 new shops in Q2, bringing the total to 9 year-to-date. Potbelly signed commitments for 22 new shops, totaling 54 in 2024. The company has 663 open and committed shops, a 25% increase from Q2 2023. Potbelly introduced Q3'24 guidance and updated 2024 guidance, projecting same-store sales growth between -1.5% to +0.5% and adjusted EBITDA of $27.0M to $30.0M for the full year.
Potbelly (NASDAQ: PBPB) ha riportato i risultati finanziari per il secondo trimestre del 2024. I punti salienti includono:
- Le vendite medie settimanali sono aumentate dello 0,6% a $26.110
- I ricavi totali sono diminuiti del 5,5% a $119,7 milioni
- Le vendite comparabili sono aumentate dello 0,4%
- Il reddito netto GAAP è stato di $34,7 milioni, con un utile per azione diluito di $1,13
- L'EBITDA rettificato è aumentato del 5,9% a $8,5 milioni
L'azienda ha aperto 4 nuovi negozi nel secondo trimestre, portando il totale a 9 dall'inizio dell'anno. Potbelly ha firmato impegni per 22 nuovi negozi, per un totale di 54 nel 2024. Attualmente la compagnia ha 663 negozi aperti e impegnati, con un aumento del 25% rispetto al secondo trimestre del 2023. Potbelly ha presentato le previsioni per il terzo trimestre del 2024 e ha aggiornato le previsioni per il 2024, prevedendo una crescita delle vendite comparabili tra -1,5% e +0,5% e un EBITDA rettificato di $27,0M a $30,0M per l'intero anno.
Potbelly (NASDAQ: PBPB) reportó resultados financieros para el segundo trimestre de 2024. Los aspectos más destacados incluyen:
- Las ventas semanales promedio aumentaron un 0,6% a $26,110
- Los ingresos totales disminuyeron un 5,5% a $119.7 millones
- Las ventas en tiendas comparables aumentaron un 0,4%
- El ingreso neto GAAP fue de $34,7 millones, con un EPS diluido de $1,13
- El EBITDA ajustado aumentó un 5,9% a $8,5 millones
La compañía abrió 4 nuevas tiendas en el segundo trimestre, llevando el total a 9 en lo que va del año. Potbelly firmó compromisos para 22 nuevas tiendas, alcanzando un total de 54 en 2024. La compañía tiene 663 tiendas abiertas y comprometidas, un aumento del 25% respecto al segundo trimestre de 2023. Potbelly presentó las proyecciones para el tercer trimestre de 2024 y actualizó las proyecciones para 2024, proyectando un crecimiento de ventas en tiendas comparables entre -1.5% y +0.5% y un EBITDA ajustado de $27.0 millones a $30.0 millones para todo el año.
Potbelly (NASDAQ: PBPB)는 2024년 2분기 재무 결과를 보고했습니다. 주요 내용은 다음과 같습니다:
- 주간 평균 매출이 0.6% 증가하여 $26,110에 도달했습니다.
- 총 수익이 5.5% 감소하여 $119.7백만이 되었습니다.
- 동일 점포 매출이 0.4% 증가했습니다.
- GAAP 기준 순이익은 $34.7백만, 희석 EPS는 $1.13이었습니다.
- 조정 EBITDA는 5.9% 증가하여 $8.5백만에 달했습니다.
회사는 2분기에 4개의 새로운 매장을 열어 연초부터 총 9개 매장에 도달했습니다. Potbelly는 2024년에 총 54개 매장을 목표로 22개의 새로운 매장에 대한 약속을 체결했습니다. 회사는 현재 663개의 개설 및 약속된 매장을 운영하고 있으며, 이는 2023년 2분기 대비 25% 증가한 수치입니다. Potbelly는 2024년 3분기 가이던스를 발표하고 2024년 가이던스를 업데이트하여 동일 점포 매출 성장률을 -1.5%에서 +0.5% 사이로, 전체 연도의 조정 EBITDA를 $27.0M에서 $30.0M로 예상했습니다.
Potbelly (NASDAQ: PBPB) a publié les résultats financiers du deuxième trimestre 2024. Les faits saillants comprennent :
- Les ventes moyennes hebdomadaires ont augmenté de 0,6 % pour atteindre 26 110 $
- Les revenus totaux ont diminué de 5,5 % pour s'établir à 119,7 millions de dollars
- Les ventes en magasins comparables ont augmenté de 0,4 %
- Le bénéfice net selon les normes GAAP était de 34,7 millions de dollars, avec un BPA dilué de 1,13 $
- L'EBITDA ajusté a augmenté de 5,9 % pour atteindre 8,5 millions de dollars
L'entreprise a ouvert 4 nouveaux magasins au cours du deuxième trimestre, portant le total à 9 depuis le début de l'année. Potbelly a signé des engagements pour 22 nouveaux magasins, atteignant un total de 54 en 2024. L'entreprise compte 663 magasins ouverts et engagés, soit une augmentation de 25 % par rapport au deuxième trimestre 2023. Potbelly a présenté ses prévisions pour le troisième trimestre 2024 et mis à jour les prévisions pour 2024, prévoyant une croissance des ventes en magasins comparables entre -1,5 % et +0,5 % et un EBITDA ajusté de 27,0 millions à 30,0 millions de dollars pour l'ensemble de l'année.
Potbelly (NASDAQ: PBPB) hat die Finanzberichte für das 2. Quartal 2024 veröffentlicht. Wichtige Highlights sind:
- Der durchschnittliche wöchentliche Umsatz ist um 0,6% auf $26.110 gestiegen
- Die Gesamterlöse sind um 5,5% auf $119,7 Millionen gesunken
- Der Umsatz in vergleichbaren Filialen ist um 0,4% gestiegen
- Das GAAP-Nettoeinkommen betrug $34,7 Millionen, mit einem verwässerten Gewinn pro Aktie von $1,13
- Das adjustierte EBITDA ist um 5,9% auf $8,5 Millionen gestiegen
Das Unternehmen hat im 2. Quartal 4 neue Geschäfte eröffnet, wodurch die Gesamtzahl auf 9 in diesem Jahr angestiegen ist. Potbelly hat sich verpflichtet, 22 neue Geschäfte zu eröffnen, insgesamt 54 im Jahr 2024. Das Unternehmen hat 663 offene und zugesagte Geschäfte, was einem Anstieg von 25% im Vergleich zum 2. Quartal 2023 entspricht. Potbelly hat die Prognose für das 3. Quartal 2024 veröffentlicht und die Prognose für 2024 aktualisiert, mit einer erwarteten Wachstumsrange für den Umsatz in vergleichbaren Geschäften zwischen -1,5% und +0,5% und einem adjustierten EBITDA von $27,0 Millionen bis $30,0 Millionen für das gesamte Jahr.
- Same-store sales increased 0.4% in Q2 2024
- Adjusted EBITDA increased 5.9% to $8.5 million
- 22 new franchise shop commitments in Q2, totaling 54 in 2024
- 663 open and committed shops, representing a 25% increase over Q2 2023
- Franchise royalties, fees and rent income increased 117.4%
- Total revenues decreased 5.5% to $119.7 million
- Company-operated sandwich shop sales decreased $9.2 million or 7.4%
- Q3'24 guidance projects same-store sales growth between -3.5% to -1.5%
Insights
Potbelly's Q2 2024 results show a mixed performance with some positive indicators amid challenges. The
The company's focus on franchising is evident, with a
The
Potbelly's performance reflects broader trends in the fast-casual dining sector. The modest
The company's expansion strategy, focusing on franchising, is a smart move in the current economic climate. It allows for brand growth while minimizing capital expenditure. The 25% increase in open and committed shops year-over-year is impressive and could lead to significant market share gains if executed well.
However, the negative same-store sales guidance for Q3 2024 (-3.5% to -1.5%) indicates potential headwinds. This could be due to broader economic pressures affecting consumer spending in the restaurant sector. Potbelly's ability to navigate these challenges while maintaining its expansion plans will be critical for its long-term success.
For retail investors, Potbelly's Q2 results present a nuanced picture. The company's strong franchise growth and consistent shop margin expansion are positive signs. The 13 consecutive quarters of year-over-year shop margin growth demonstrate operational efficiency improvements.
The
The updated 2024 guidance, with same-store sales growth between
Overall, while Potbelly shows promise in its franchise-led growth strategy, the current macroeconomic headwinds and mixed financial results warrant a cautious approach for retail investors.
22 additional new franchise shop commitments in the second quarter
9 shop openings year-to-date through August 8th
CHICAGO, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Potbelly Corporation (NASDAQ: PBPB), (“Potbelly” or the “Company”) the iconic neighborhood sandwich shop concept, today reported financial results for its second fiscal quarter ended June 30, 2024.
Key highlights for the quarter ended June 30, 2024, compared to June 25, 2023:
- Average Weekly Sales (AWS) increased
0.6% to$26,110 and, inclusive of the impact of refranchising 26 former company locations since Q1 2023. - Total revenues decreased by
5.5% to$119.7 million compared to$126.6 million .- Company-operated sandwich shop sales, net decreased
$9.2 million or7.4% driven by the short-term impact of last year’s refranchising which included the sale of 26 company shops since Q1 2023. - Franchise royalties, fees and rent income increased
$2.2 million or117.4% driven by a53% increase in franchised units.
- Company-operated sandwich shop sales, net decreased
- Same-store sales in the second quarter increased
0.4% . - GAAP net income attributable to Potbelly Corporation was
$34.7 million compared to$2.2 million . GAAP diluted earnings per share (EPS) was$1.13 compared to$0.07 . These increases were inclusive of a$31.3 million income tax benefit for the release of the Company’s tax valuation allowance in Q2 2024. - Adjusted net income1 attributable to Potbelly Corporation was
$2.5 million compared to$2.0 million . Adjusted diluted EPS1 was$0.08 compared to$0.07 . - Adjusted EBITDA1 increased
5.9% to$8.5 million compared to$8.0 million .
| (1) | Adjusted net income, adjusted diluted EPS and adjusted EBITDA are non-GAAP measures. For reconciliations of these measures to the most directly comparable GAAP measure, see the accompanying financial tables. For a discussion of why we consider them useful, see “Non-GAAP Financial Measures” below. |
Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “The hard work and dedication of our team members during the second quarter enabled us to continue our growth in three key areas of the business. We grew same-store sales by
Financial Outlook
The company introduces 3Q’24 and updated 2024 guidance below, while reiterating the previously provided long-term growth ranges.
| 3Q’24 Guidance | |
| Same Store Sales % Growth | - |
| Adjusted EBITDA (2) |
| 2024 Guidance | |
| Same Store Sales % Growth | - |
| New Unit Growth | At least 30 shops |
| Adjusted EBITDA (2) |
| (2) | Quarterly and full-year guidance set forth above reflect the impact of refranchising 33 former company locations in 2023; the 53rd week in 2023, which will not recur in 2024; increased costs associated with the Company’s investment in development efforts to support sustained franchise growth and a |
Development Update
During the second quarter, the Company opened four Potbelly shops which brings the total number of new shops to seven through the end of the second quarter and to nine year-to-date through August 8, 2024. In addition, during the second quarter, the Company signed shop commitments for a total of 22 new Potbelly shops bringing the total number of new shop commitments signed in 2024 to 54. As of June 30, 2024, Potbelly has 663 open and committed shops representing an increase of
Share Repurchase Program
During the second quarter, the Company repurchased approximately 86 thousand shares of its common stock for a total of approximately
The Company may repurchase shares of its common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of common stock repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.
Conference Call
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 1-800-579-2543 in the U.S. & Canada, or 1-785-424-1789 internationally. The conference ID is POTBELLY.
For those unable to participate, an audio replay will be available following the call through Thursday, August 15, 2024. To access the replay, please call 844-512-2921 (U.S. & Canada), or 412-317-6671 (International) and enter confirmation code 11156428. A web-based archive of the conference call will also be available at the above website.
About Potbelly
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 more than 425 shops in the United States including more than 80 franchised shops in the United States. For more information, please visit our website at www.potbelly.com.
Definitions
The following definitions apply to these terms as used throughout this press release:
- Revenues – represents net company-operated sandwich shop sales and our franchise royalties and fees. Net company-operated shop sales consist of food and beverage sales, net of promotional allowances and employee meals. Franchise royalties and fees consist of royalty income, franchise fee, and other fees collected from franchisees including advertising and rent.
- Company-operated comparable store sales or same-store traffic – an operating measure that represents the change in year-over-year sales or entrée counts for the comparable company-operated store base open for 15 months or longer. In fiscal years that include a 53rd week, the last week of the fourth quarter and fiscal year is excluded from the year-over-year comparisons so that the time periods are consistent. In fiscal years that follow a 53-week year, the current period sales are compared to the trailing 52-week sales to compare against the most closely comparable weeks from the prior calendar year.
- Average Weekly Sales (AWS) – an operating measure that represents the average weekly sales of all company-operated shops which reported sales during the associated time period.
- Average Unit Volume (AUV) – an operating measure that represents the average annual sales of all company-operated shops which reported sales during the associated time period.
- System-wide sales – an operating measure that represents the sum of sales generated by company-operated shops and sales generated by franchised shops, net of all promotional allowances, discounts, and employee meals. Net sales from franchised shops are not included in total revenues. Rather, revenues are limited to the royalties, fees and other income collected from franchisees.
- EBITDA – a non-GAAP measure that represents income before depreciation and amortization expense, interest expense and the provision for income taxes.
- Adjusted EBITDA – a non-GAAP measure that represents income before depreciation and amortization expense, interest expense and the provision for income taxes, adjusted to eliminate the impact of other items, including certain non-cash and other items that we do not consider reflective of underlying business performance.
- Shop-level profit (loss) – a non-GAAP measure that represents income (loss) from operations excluding franchise royalties and fees, franchise support, marketing and rent expenses, general and administrative expenses, depreciation expense, pre-opening costs, restructuring costs, loss on Franchise Growth Acceleration Initiative activities and impairment, loss on the disposal of property and equipment and shop closures.
- Shop-level profit (loss) margin – a non-GAAP measure that represents shop-level profit expressed as a percentage of net company-operated sandwich shop sales.
- Adjusted net income (loss) – a non-GAAP measure that represents net income (loss), adjusted to eliminate the impact of restructuring costs, impairment, loss on the disposal of property and equipment, shop closures, and other items we do not consider representative of our ongoing operating performance, including the income tax effects of those adjustments and the change in our income tax valuation allowance.
- Adjusted diluted EPS – a non-GAAP measure that represents adjusted net income (loss) divided by the weighted average number of fully dilutive common shares outstanding.
- Shop commitments – an operating measure that represents the number of company and franchise shops that are committed to be developed. For franchise shops, a shop development area agreement (SDAA) or standalone franchise agreement represents a commitment. For company shops, a commitment is made through a good faith combination of business decision-making and capital allocation needed to develop and operate a new shop location.
Non-GAAP Financial Measures
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.” Because the Company is not able to estimate the impact of specific line items, which have the potential to significantly impact, favorably or unfavorably, the Company's reported earnings in future periods, the Company is not providing a reconciliation for the 2024 guidance.
Forward-Looking Statements
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 (i) future financial position and results of operations, (ii) 3Q’24 and full year 2024 outlook and guidance and (iii) expectations regarding our new stock repurchase program.
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 the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s 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.
Investor Contact:
Jeff Priester
ICR
investor@potbelly.com
Media Contact:
ICR
PotbellyPR@icrinc.com
| Potbelly Corporation Consolidated Statements of Operations and Margin Analysis – Unaudited (amounts in thousands, except per share data) | ||||||||||||||||||||||||||
| For the Quarter Ended | For the Year to Date Ended | |||||||||||||||||||||||||
| Jun 30, 2024 | % of Revenue | Jun 25, 2023 | % of Revenue | Jun 30, 2024 | % of Revenue | Jun 25, 2023 | % of Revenue | |||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Sandwich shop sales, net | $ | 115,536 | 96.5 | % | $ | 124,709 | 98.5 | % | $ | 223,113 | 96.6 | % | $ | 241,656 | 98.7 | % | ||||||||||
| Franchise royalties, fees and rent income | 4,161 | 3.5 | 1,914 | 1.5 | 7,737 | 3.4 | 3,237 | 1.3 | ||||||||||||||||||
| Total revenues | 119,697 | 100.0 | 126,623 | 100.0 | 230,850 | 100.0 | 244,893 | 100.0 | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| (Percentages stated as a percent of sandwich shop sales, net) | ||||||||||||||||||||||||||
| Sandwich shop operating expenses, excluding depreciation | ||||||||||||||||||||||||||
| Food, beverage and packaging costs | 31,306 | 27.1 | 34,903 | 28.0 | 60,576 | 27.2 | 67,523 | 27.9 | ||||||||||||||||||
| Labor and related expenses | 32,313 | 28.0 | 37,866 | 30.4 | 64,566 | 28.9 | 74,368 | 30.8 | ||||||||||||||||||
| Occupancy expenses | 12,543 | 10.9 | 13,083 | 10.5 | 24,257 | 10.9 | 26,393 | 10.9 | ||||||||||||||||||
| Other operating expenses | 21,264 | 18.4 | 20,925 | 16.8 | 41,093 | 18.4 | 41,409 | 17.1 | ||||||||||||||||||
| (Percentages stated as a percent of total revenues) | ||||||||||||||||||||||||||
| Franchise support, rent and marketing expenses | 3,001 | 2.5 | 1,215 | 1.0 | 5,538 | 2.4 | 1,806 | 0.7 | ||||||||||||||||||
| General and administrative expenses | 11,866 | 9.9 | 11,695 | 9.2 | 23,413 | 10.1 | 21,664 | 8.8 | ||||||||||||||||||
| Depreciation expense | 3,016 | 2.5 | 2,887 | 2.3 | 6,027 | 2.6 | 5,857 | 2.4 | ||||||||||||||||||
| Pre-opening costs | 96 | NM | 33 | NM | 96 | NM | 55 | NM | ||||||||||||||||||
| Loss on Franchise Growth Acceleration Initiative activities | 28 | NM | 14 | NM | 161 | NM | 963 | 0.4 | ||||||||||||||||||
| Impairment, loss on disposal of property and equipment and shop closures | 145 | 0.1 | 658 | 0.5 | 886 | 0.4 | 1,703 | 0.7 | ||||||||||||||||||
| Total expenses | 115,578 | 96.6 | 123,279 | 97.4 | 226,613 | 98.2 | 241,741 | 98.7 | ||||||||||||||||||
| Income from operations | 4,119 | 3.4 | 3,344 | 2.6 | 4,237 | 1.8 | 3,152 | NM | ||||||||||||||||||
| Interest expense, net | 181 | 0.2 | 1,011 | 0.8 | 545 | 0.2 | 1,678 | 0.7 | ||||||||||||||||||
| Loss on extinguishment of debt | — | NM | — | NM | 2,376 | NM | 239 | NM | ||||||||||||||||||
| Income before income taxes | 3,938 | 3.3 | 2,333 | 1.8 | 1,316 | 0.6 | 1,235 | 0.5 | ||||||||||||||||||
| Income tax expense (benefit) | (30,982 | ) | (25.9 | ) | (48 | ) | NM | (30,931 | ) | (13.4 | ) | 57 | NM | |||||||||||||
| Net income | 34,920 | 29.2 | 2,381 | 1.9 | 32,247 | 14.0 | 1,178 | 0.5 | ||||||||||||||||||
| Net income attributable to non-controlling interest | 208 | 0.2 | 165 | 0.1 | 302 | 0.1 | 288 | 0.1 | ||||||||||||||||||
| Net income attributable to Potbelly Corporation | $ | 34,712 | 29.0 | % | $ | 2,216 | 1.8 | % | $ | 31,945 | 13.9 | % | $ | 890 | 0.4 | % | ||||||||||
| Net income per common share attributable to common stockholders: | ||||||||||||||||||||||||||
| Basic | $ | 1.16 | $ | 0.08 | $ | 1.07 | $ | 0.03 | ||||||||||||||||||
| Diluted | $ | 1.13 | $ | 0.07 | $ | 1.04 | $ | 0.03 | ||||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||||
| Basic | 29,926 | 29,199 | 29,903 | 29,053 | ||||||||||||||||||||||
| Diluted | 30,714 | 30,088 | 30,842 | 29,776 | ||||||||||||||||||||||
| "NM" - Amount is not meaningful | ||||||||||||||||||||||||||
| Potbelly Corporation Consolidated Balance Sheets – Unaudited (amounts in thousands, except par value data) | |||||||
| Jun 30, 2024 | Dec 31, 2023 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 8,322 | $ | 33,788 | |||
| Accounts receivable, net of allowances of 2023, respectively | 8,973 | 7,960 | |||||
| Inventories | 3,353 | 3,516 | |||||
| Prepaid expenses and other current assets | 7,445 | 7,828 | |||||
| Assets classified as held-for-sale | — | — | |||||
| Total current assets | 28,093 | 53,092 | |||||
| Property and equipment, net | 46,730 | 45,087 | |||||
| Right-of-use assets for operating leases | 137,199 | 144,390 | |||||
| Indefinite-lived intangible assets | 3,404 | 3,404 | |||||
| Goodwill | 2,053 | 2,056 | |||||
| Restricted cash | 749 | 749 | |||||
| Deferred tax assets | 30,976 | — | |||||
| Deferred expenses, net and other assets | 5,406 | 3,681 | |||||
| Total assets | $ | 254,610 | $ | 252,460 | |||
| Liabilities and equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 9,216 | $ | 9,927 | |||
| Accrued expenses | 30,149 | 35,377 | |||||
| Short-term operating lease liabilities | 23,539 | 24,525 | |||||
| Current portion of long-term debt | — | 1,250 | |||||
| Total current liabilities | 62,904 | 71,078 | |||||
| Long-term debt, net of current portion | 4,000 | 19,168 | |||||
| Long-term operating lease liabilities | 133,222 | 142,050 | |||||
| Other long-term liabilities | 6,782 | 6,070 | |||||
| Total liabilities | 206,908 | 238,367 | |||||
| Equity | |||||||
| Common stock, | 397 | 389 | |||||
| Warrants | 1,745 | 2,219 | |||||
| Additional paid-in-capital | 467,550 | 462,583 | |||||
| Treasury stock, held at cost, 10,354 and 10,077 shares as of June 30, 2024, and December 31, 2023, respectively | (119,538 | ) | (116,701 | ) | |||
| Accumulated deficit | (301,852 | ) | (333,797 | ) | |||
| Total stockholders’ equity | 48,302 | 14,693 | |||||
| Non-controlling interest | (600 | ) | (600 | ) | |||
| Total equity | 47,702 | 14,093 | |||||
| Total liabilities and equity | $ | 254,610 | $ | 252,460 | |||
| Potbelly Corporation Consolidated Statements of Cash Flows – Unaudited (amounts in thousands) | |||||||
| For the Year to Date Ended | |||||||
| Jun 30, 2024 | Jun 25, 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 32,247 | $ | 1,178 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation expense | 6,027 | 5,857 | |||||
| Noncash lease expense | 12,568 | 12,386 | |||||
| Deferred income tax | (31,251 | ) | (81 | ) | |||
| Stock-based compensation expense | 3,192 | 2,216 | |||||
| Asset impairment, loss on disposal of property and equipment and shop closures | 463 | 1,061 | |||||
| Loss on Franchise Growth Acceleration Initiative activities | 162 | 936 | |||||
| Loss on extinguishment of debt | 2,376 | 224 | |||||
| Other operating activities | 130 | 209 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | (1,035 | ) | (1,862 | ) | |||
| Inventories | 169 | 281 | |||||
| Prepaid expenses and other assets | (900 | ) | (240 | ) | |||
| Accounts payable | (522 | ) | (1,222 | ) | |||
| Operating lease liabilities | (14,540 | ) | (13,707 | ) | |||
| Accrued expenses and other liabilities | (5,236 | ) | 4,786 | ||||
| Net cash provided by operating activities: | 3,850 | 12,022 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (8,687 | ) | (7,281 | ) | |||
| Proceeds from sale of refranchised shops and other assets | 227 | 1,362 | |||||
| Net cash used in investing activities: | (8,460 | ) | (5,919 | ) | |||
| Cash flows from financing activities: | |||||||
| Borrowings under Revolving Facility | 7,000 | — | |||||
| Borrowings under Term Loan | — | 25,000 | |||||
| Borrowings under Former Credit Facility | — | 14,600 | |||||
| Repayments under Revolving Facility | (3,000 | ) | — | ||||
| Repayments under Term Loan | (22,827 | ) | — | ||||
| Repayments under Former Credit Facility | — | (23,150 | ) | ||||
| Payment of debt issuance costs | (623 | ) | (2,204 | ) | |||
| Proceeds from exercise of warrants | 1,309 | 961 | |||||
| Employee taxes on certain stock-based payment arrangements | (1,710 | ) | (976 | ) | |||
| Distributions to non-controlling interest | (302 | ) | (318 | ) | |||
| Principal payments made for Term Loan | — | (625 | ) | ||||
| Treasury Stock repurchase | (703 | ) | — | ||||
| Net cash (used in) provided by financing activities: | (20,856 | ) | 13,288 | ||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (25,466 | ) | 19,391 | ||||
| Cash and cash equivalents and restricted cash at beginning of period | 34,537 | 15,619 | |||||
| Cash and cash equivalents and restricted cash at end of period | $ | 9,071 | $ | 35,010 | |||
| Supplemental cash flow information: | |||||||
| Income taxes paid | $ | 553 | $ | 245 | |||
| Interest paid | $ | 493 | $ | 1,446 | |||
| Supplemental non-cash investing and financing activities: | |||||||
| Unpaid liability for purchases of property and equipment | $ | 803 | $ | 1,035 | |||
| Unpaid liability for employee taxes on certain stock-based payment arrangements | $ | 424 | $ | 149 | |||
| Potbelly Corporation Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures – Unaudited (amounts in thousands, except per share data) | |||||||||||||||
| For the Quarter Ended | For the Year To Date Ended | ||||||||||||||
| Jun 30, 2024 | Jun 25, 2023 | Jun 30, 2024 | Jun 25, 2023 | ||||||||||||
| Net income attributable to Potbelly Corporation, as reported | $ | 34,712 | $ | 2,216 | $ | 31,945 | $ | 890 | |||||||
| Impairment, loss on disposal of property and equipment and shop closures(1) | 145 | 658 | 886 | 1,703 | |||||||||||
| Loss on extinguishment of debt(2) | — | — | 2,376 | 239 | |||||||||||
| Loss on Franchise Growth Acceleration Initiative activities(3) | 28 | 14 | 161 | 963 | |||||||||||
| Total adjustments before income tax | 173 | 672 | 3,423 | 2,905 | |||||||||||
| Income tax adjustments(4) | (32,361 | ) | (857 | ) | (32,615 | ) | (1,180 | ) | |||||||
| Total adjustments after income tax | (32,188 | ) | (185 | ) | (29,192 | ) | 1,725 | ||||||||
| Adjusted net income attributable to Potbelly Corporation | $ | 2,524 | $ | 2,031 | $ | 2,753 | $ | 2,615 | |||||||
| Adjusted net income attributable to Potbelly Corporation per share, basic | $ | 0.08 | $ | 0.07 | $ | 0.09 | $ | 0.09 | |||||||
| Adjusted net income attributable to Potbelly Corporation per share, diluted | $ | 0.08 | $ | 0.07 | $ | 0.09 | $ | 0.09 | |||||||
| Shares used in computing adjusted net income attributable to Potbelly Corporation per share: | |||||||||||||||
| Basic | 29,926 | 29,199 | 29,903 | 29,053 | |||||||||||
| Diluted | 30,714 | 30,088 | 30,842 | 29,776 | |||||||||||
| For the Quarter Ended | For the Year To Date Ended | |||||||||||||
| Jun 30, 2024 | Jun 25, 2023 | Jun 30, 2024 | Jun 25, 2023 | |||||||||||
| Net income attributable to Potbelly Corporation, as reported | $ | 34,712 | $ | 2,216 | $ | 31,945 | $ | 890 | ||||||
| Depreciation expense | 3,016 | 2,887 | 6,027 | 5,857 | ||||||||||
| Interest expense, net | 181 | 1,011 | 545 | 1,678 | ||||||||||
| Income tax (benefit) expense | (30,982 | ) | (48 | ) | (30,931 | ) | 57 | |||||||
| EBITDA | $ | 6,927 | $ | 6,066 | $ | 7,586 | $ | 8,482 | ||||||
| Impairment, loss on disposal of property and equipment and shop closures(1) | 145 | 658 | 886 | 1,703 | ||||||||||
| Stock-based compensation expense | 1,421 | 1,305 | 3,192 | 2,216 | ||||||||||
| Loss on extinguishment of debt(2) | — | — | 2,376 | 239 | ||||||||||
| Loss on Franchise Growth Acceleration Initiative activities(3) | 28 | 14 | 161 | 963 | ||||||||||
| Adjusted EBITDA | $ | 8,521 | $ | 8,043 | $ | 14,201 | $ | 13,603 | ||||||
| Potbelly Corporation Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures – Unaudited (amounts in thousands, except per share data) | |||||||||||||||
| For the Quarter Ended | For the Year To Date Ended | ||||||||||||||
| Jun 30, 2024 | Jun 25, 2023 | Jun 30, 2024 | Jun 25, 2023 | ||||||||||||
| Income from operations [A] | $ | 4,119 | $ | 3,344 | $ | 4,237 | $ | 3,152 | |||||||
| Income from operations margin [A÷B] | 3.4 | % | 2.6 | % | 1.8 | % | 1.3 | % | |||||||
| Less: Franchise royalties, fees and rent income | 4,161 | 1,914 | 7,737 | 3,237 | |||||||||||
| Franchise support, rent and marketing expenses | 3,001 | 1,215 | 5,538 | 1,806 | |||||||||||
| General and administrative expenses | 11,866 | 11,695 | 23,413 | 21,664 | |||||||||||
| Depreciation expense | 3,016 | 2,887 | 6,027 | 5,857 | |||||||||||
| Pre-opening costs | 96 | 33 | 96 | 55 | |||||||||||
| Loss on Franchise Growth Acceleration Initiative activities(3) | 28 | 14 | 161 | 963 | |||||||||||
| Impairment, loss on disposal of property and equipment and shop closures(1) | 145 | 658 | 886 | 1,703 | |||||||||||
| Shop-level profit [C] | $ | 18,110 | $ | 17,932 | $ | 32,621 | $ | 31,963 | |||||||
| Total revenues [B] | $ | 119,697 | $ | 126,623 | $ | 230,850 | $ | 244,893 | |||||||
| Less: Franchise royalties, fees and rent income | 4,161 | 1,914 | 7,737 | 3,237 | |||||||||||
| Sandwich shop sales, net [D] | $ | 115,536 | $ | 124,709 | $ | 223,113 | $ | 241,656 | |||||||
| Shop-level profit margin [C÷D] | 15.7 | % | 14.4 | % | 14.6 | % | 13.2 | % | |||||||
| Potbelly Corporation Selected Operating Data – Unaudited (amounts in thousands, except shop counts) | |||||||||||||||
| For the Quarter Ended | For the Year to Date Ended | ||||||||||||||
| Jun 30, 2024 | Jun 25, 2023 | Jun 30, 2024 | Jun 25, 2023 | ||||||||||||
| Selected Operating Data | |||||||||||||||
| Revenue Data: | |||||||||||||||
| Company-operated comparable store sales | 0.4 | % | 12.9 | % | 0.1 | % | 17.2 | % | |||||||
| System-Wide Sales | |||||||||||||||
| Sales from company-operated shops, net | $ | 115,536 | $ | 124,709 | $ | 223,113 | $ | 241,656 | |||||||
| Sales from franchise shops, net | 26,782 | 17,608 | 53,393 | 32,340 | |||||||||||
| System-wide sales | $ | 142,318 | $ | 142,317 | $ | 276,506 | $ | 273,996 | |||||||
| For the Quarter Ended | For the Year to Date Ended | ||||||||||
| Jun 30, 2024 | Jun 25, 2023 | Jun 30, 2024 | Jun 25, 2023 | ||||||||
| Company-operated shops: | |||||||||||
| Beginning of period | 345 | 373 | 345 | 384 | |||||||
| Openings | 2 | - | 2 | ||||||||
| Shops sold to franchisee | (1 | ) | - | (1 | ) | (8 | ) | ||||
| Closures | (1 | ) | (1 | ) | (1 | ) | (4 | ) | |||
| Shops at end of period | 345 | 372 | 345 | 372 | |||||||
| Franchised shops: | |||||||||||
| Beginning of period | 82 | 53 | 79 | 45 | |||||||
| Openings | 2 | 2 | 5 | 2 | |||||||
| Shops sold to franchisee | 1 | - | 1 | 8 | |||||||
| Closures | (1 | ) | - | (1 | ) | ||||||
| Shops at end of period | 84 | 55 | 84 | 55 | |||||||
| System-wide shops: | |||||||||||
| Beginning of period | 427 | 426 | 424 | 429 | |||||||
| Openings | 4 | 2 | 7 | 2 | |||||||
| Closures | (2 | ) | (1 | ) | (2 | ) | (4 | ) | |||
| Shops at end of period | 429 | 427 | 429 | 427 | |||||||
| Potbelly Corporation Footnotes to the Press Release, Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures & Selected Operating Data | |
| 1) | This adjustment includes costs related to impairment of long-lived assets, loss on disposal of property and equipment and shop closure expenses. |
| 2) | This adjustment includes costs related to the loss recognized upon the termination of the Company’s term loan and former credit agreement for 2024 and 2023, respectively. |
| 3) | This adjustment includes costs related to our plan to grow our franchise units domestically through multi-unit shop development area agreements, which may include refranchising certain company-operated shops. |
| 4) | This adjustment includes the tax impacts of the other adjustments listed above based on the Company’s effective tax rate and the change in the Company’s income tax valuation allowance during the period. |
FAQ
What was Potbelly's (PBPB) same-store sales growth in Q2 2024?
How many new shops did Potbelly (PBPB) open in 2024 so far?
What is Potbelly's (PBPB) projected adjusted EBITDA for 2024?
How many franchise shop commitments did Potbelly (PBPB) secure in Q2 2024?
