Operations
Potbelly reports positive Q1 sales, eyes continued growth
CEO Bob Wright said success stems from its digital platform and loyalty program, as well as menu upgrades and a focus on catering.
May 8, 2025 by Cherryh Cansler — Editor, FastCasual.com
After four years of working to rejuvenate the brand, Potbelly Inc. is headed in the right direction, according to CEO Bob Wright, who told investors Tuesday that he was proud to be able to call the Chicago-based chain "a growth company again."
Potbelly reported a 4.8% increase in system-wide sales for the first fiscal quarter of 2025, driven by positive same-store sales growth of .9% at company-operated locations. Average weekly sales increased 1.2% to $24,550, and total revenue for the quarter reached $113.7 million, a 2.3% increase compared to the same period last year.
"The litany of comp growth drivers at our disposal gives us great confidence in the future," Wright said during the call. "More specifically, we've developed an industry-leading digital platform, including our rapidly expanding Potbelly Perks loyalty program. In the past year, we have reintroduced menu development to the brand and have seen great success, including the recent prime rib sandwich, and we continue to enhance our catering channel with revamped bundles and packaging as it continues as a growth driver for our business."
The company opened four shops during the quarter, including three franchised locations and secured commitments for 40 additional franchise shops.
"With our focus on driving top-line growth through menu innovation and investment in digital, accelerating franchise unit development and smart cost management, we believe Potbelly is prime to capitalize on the immense opportunity ahead of us, " Steve Cirulis, SVP and CFO, said during Tuesday's call.
Looking ahead
Potbelly reiterated its full-year guidance, projecting same-store sales growth of 1.5% to 2.5% and at least 38 shop openings. It also introduced second-quarter guidance, anticipating same-store sales growth of 1.5% to 2.5% and adjusted EBITDA between $8.25 million and $9.75 million.
"We have substantially improved our shop level margins and delivered 24 shop level margins of over 15%," Wright said. "We reengineered our prototypical design last year to create operating efficiency, better serve our digital business, while also reducing the required lease space needed to build new Potbelly shops, and we built a world-class franchise sales team that's helped us grow our future committed shop pipeline to over 300 shops. Combined with a clear line of sight into delivering at least 38 new shops in 2025 and an approved shop pipeline for 2026 that is stronger than the 2025 pipeline at this point last year."
Potbelly reported a GAAP net loss of $62,000, or $0 per diluted share, compared to a net loss of $2.8 million, or $0.09 per diluted share, in the first quarter of 2024. Adjusted net income was $43,000, or $0.00 per diluted share, compared to $0.2 million, or $0.01 per diluted share, in the prior year.
During the first quarter, Potbelly repurchased approximately 117,000 shares of its common stock for about $1.1 million. As of March 30, the company had $17.5 million remaining under its share repurchase program.
"We continue to be confident in our ability to deliver upon our 2,000 shop long-term potential and deliver double-digit annual new unit growth," Wright said.
Potbelly has over 440 shops across the U.S., including over 90 franchised locations.
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