Potbelly to Post Q4 Earnings: What's in Store for the Stock?

Potbelly Corporation PBPB is scheduled to report fourth-quarter 2024 results on March 6.

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In the last reported quarter, PBPB registered an earnings surprise of 60%.

Trend in Estimate Revision of PBPB

The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) is pegged at 6 cents, indicating an improvement of 200% from the 2 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $116.9 million. The projection suggests a 7% fall from the year-ago quarter’s reported figure.

Potbelly Corporation Price and EPS Surprise

Potbelly Corporation price-eps-surprise | Potbelly Corporation Quote

Let's take a look at how things have shaped up in the quarter.

Factors Likely to Shape Potbelly’s Quarterly Results

Potbelly’s fourth-quarter performance is likely to have benefited from menu innovation, digital strategies and a franchise-led expansion strategy.

The introduction of new core menu items, such as the Smokestack Pork & Mac sandwich and the Cubano, along with the expansion of the $7.99 Everyday Value Combo, is likely to have driven customer engagement and repeat visits. Enhancements like proprietary sauces and expanded toppings may have further elevated the menu, appealing to a broader customer base and boosting sales.

Digital growth has been a key driver for Potbelly, and this momentum likely continued in the fourth quarter. The Potbelly Perks loyalty program has likely strengthened customer retention, as members increasingly engage with personalized offers and rewards. Additionally, digital marketing efforts may have helped sustain brand awareness, driving fourth-quarter traffic both in-store and online.

Emphasis on the development pipeline expansion is likely to have aided the company’s performance in the fourth quarter. The company expects to open nine to 11 total shops in the fourth quarter and a total of 24 to 26 shops in 2024.

Potbelly continues to navigate a challenging consumer environment. The overall impact of economic pressures on discretionary spending may have posed headwinds for same-store sales growth. Rising operational costs, including labor and occupancy expenses, may have also weighed on shop-level profitability.

Taking into account its year-to-date performance, category trends and momentum heading into the fourth quarter, Potbelly expects same-store sales growth to range between negative 2.5% and negative 0.5%. Adjusted EBITDA for the quarter is projected to be between $7 million and $8 million.

What Our Model Says About PBPB Stock

Our proven model does not conclusively predict an earnings beat for Potbelly this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.

Earnings ESP for PBPB: Potbelly has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Potbelly’s Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Retail-Wholesale Releases

Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the top and bottom lines increased on a year-over-year basis.

During the quarter, consolidated comps increased 2.5% year over year, and net restaurants grew 3.4%. Global system-wide sales rose 5.6% year over year. QSR unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least a 5% net restaurant increase.

McDonald's Corporation MCD posted fourth-quarter 2024 results, wherein earnings were in line with the Zacks Consensus Estimate, but revenues missed the same. The top and bottom lines decreased year over year. Its Accelerating-the-Arches strategy remains the right approach for expanding market share.

At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. The global comps increased 0.4% compared with 3.4% growth in the prior-year quarter. MCD’s comps increased after witnessing a decline in the preceding two quarters.

YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. Both the top and bottom lines increased on a year-over-year basis.

The company’s top-line performance reflected solid contributions from the KFC, Pizza Hut and Taco Bell divisions. YUM reported progress in the digital space, with digital sales rising approximately 15% and the digital mix surpassing 50%, moving closer to its long-term goal of 100% digital sales. Worldwide system sales, excluding foreign currency translation, grew 8% year over year, with Taco Bell increasing 14% and KFC rising 6%. The metric rose 3% year over year for Pizza Hut.

This article originally published on Zacks Investment Research (zacks.com).

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