Potbelly (PBPB) Reports Earnings Tomorrow. What To Expect

Max Juang /
2024/03/06 2:01 am EST

Casual sandwich chain Potbelly (NASDAQ:PBPB) will be reporting earnings tomorrow after market close. Here's what to look for.

Last quarter Potbelly reported revenues of $120.8 million, up 2.7% year on year, missing analyst expectations by 0.7%. It was a strong quarter for the company, with an impressive beat of analysts' gross margin estimates. Adjusted EBITDA and EPS also exceeded expectations. That shows management has been disciplined with its expenses and really stood out as a positive in these results. On the other hand, its revenue missed Wall Street's estimates, driven by its underperformance in same-store sales.

Is Potbelly buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Potbelly's revenue to grow 4.2% year on year to $125.2 million, slowing down from the 16.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.03 per share.

Potbelly Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates four times over the last two years.

Looking at Potbelly's peers in the modern fast food segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Sweetgreen delivered top-line growth of 29.1% year on year, beating analyst estimates by 0.7% and Shake Shack reported revenues up 20% year on year, exceeding estimates by 2.2%. Sweetgreen traded up 11.2% on the results, and Shake Shack was up 7.8%.

Read our full analysis of Sweetgreen's results here and Shake Shack's results here.

There has been positive sentiment among investors in the modern fast food segment, with the stocks up on average 5.2% over the last month. Potbelly is up 9.8% during the same time, and is heading into the earnings with analyst price target of $14.8, compared to share price of $13.6.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.