Potbelly’s first quarter results for 2025 were met with a notably positive market reaction, as the company surpassed Wall Street’s revenue and adjusted profit expectations. Management attributed the outperformance to sustained momentum in menu innovation, increased digital engagement, and disciplined cost controls. CEO Bob Wright highlighted the strong customer response to new offerings, stating, “Our customers responded positively” to recent menu additions, while also citing operational improvements and franchise expansion as key contributors. The company’s focus on expanding digital channels and delivering value through promotions further supported sales resilience during the period.
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Potbelly (PBPB) Q1 CY2025 Highlights:
- Revenue: $113.7 million vs analyst estimates of $111.7 million (2.3% year-on-year growth, 1.7% beat)
- Adjusted EPS: $0 vs analyst estimates of -$0.02 ($0.02 beat)
- Adjusted EBITDA: $5.52 million vs analyst estimates of $4.10 million (4.9% margin, 34.6% beat)
- EBITDA guidance for the full year is $33.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 0.2%, in line with the same quarter last year
- Locations: 440 at quarter end, up from 425 in the same quarter last year
- Same-Store Sales were flat year on year (-0.2% in the same quarter last year)
- Market Capitalization: $384.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Potbelly’s Q1 Earnings Call
- Jeremy Hamblin (Craig-Hallum Capital Group) asked what drove strong same-store sales guidance despite industry softness. CEO Bob Wright cited menu innovation, value offerings, and digital marketing as key factors.
- Hamblin (Craig-Hallum) also inquired about the strength of franchisee commitments amid macro uncertainty. Wright attributed franchise interest to improved unit economics and positive trends in both company and franchise shops.
- Alex Sturnieks (Lake Street Capital Markets) questioned trends in digital ordering mix and future initiatives. Wright emphasized ongoing investment in consumer-facing digital assets and enhanced loyalty program capabilities.
- Matt Curtis (William Blair) asked about commodity deflation in Q1 and inflation expectations for the year. Wright explained the company’s diverse food basket mitigates tariff impacts and that food and labor inflation are expected to remain manageable.
- Todd Brooks (The Benchmark Company) sought details on menu innovation cadence and how operational efficiency is maintained amid product expansions. Wright noted a deliberate stage-gate process and continuous monitoring to balance new product introductions with throughput.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of new franchise shop openings and commitments to gauge franchise program momentum, (2) the effectiveness of ongoing digital investments—particularly upgrades to the Potbelly Perks platform—in driving customer engagement and sales, and (3) the impact of new menu launches and limited-time offers on transaction growth and average check. Cost management in response to inflation and tariffs will also be closely tracked.
Potbelly currently trades at $12.71, up from $8.54 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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