Potbelly Corporation (PBPB) Bundle
A Brief History of Potbelly Corporation
Company Overview
Potbelly Corporation, established in 1977, operates a chain of sandwich shops across the United States. As of September 29, 2024, Potbelly reported a total of 468 locations, comprising both company-operated and franchised shops.
Financial Performance
For the year to date ended September 29, 2024, Potbelly achieved total revenues of $345.97 million, reflecting a decrease of $19.69 million, or 5.4%, from $365.66 million in the previous year. The decline was primarily attributed to a reduction in sandwich shop sales, which decreased from $359.99 million to $333.88 million, a drop of 7.3%.
| Financial Metrics | 2024 (Year to Date) | 2023 (Year to Date) |
|---|---|---|
| Total Revenues | $345.97 million | $365.66 million |
| Sandwich Shop Sales, Net | $333.88 million | $359.99 million |
| Franchise Royalties, Fees, and Rent Income | $12.09 million | $5.67 million |
| Net Income | $35.68 million | $2.38 million |
| Shop-Level Profit Margin | 14.9% | 13.7% |
Major Developments
In 2023, Potbelly refranchised 34 company-operated shops, impacting overall sales but increasing franchise royalties and fees significantly. The revenue from franchise royalties, fees, and rental income surged by 113.4%, from $5.67 million in 2023 to $12.09 million in 2024.
Cost Management
Potbelly's operational costs showed a notable decline as well. Food, beverage, and packaging costs decreased from $100.42 million in 2023 to $90.05 million in 2024, a reduction of 10.3%. Likewise, labor and related expenses fell from $108.56 million to $96.84 million, reflecting a 10.8% decrease.
| Operating Expenses | 2024 (Year to Date) | 2023 (Year to Date) |
|---|---|---|
| Food, Beverage, and Packaging Costs | $90.05 million | $100.42 million |
| Labor and Related Expenses | $96.84 million | $108.56 million |
| Occupancy Expenses | $36.06 million | $39.05 million |
| General and Administrative Expenses | $34.01 million | $33.56 million |
Debt and Liquidity
As of September 29, 2024, Potbelly had a cash balance of $11.9 million and total liquidity of $38.2 million, compared to $31.7 million and $30.9 million in the prior year. The company repaid its Term Loan in full in February 2024, recognizing a loss on extinguishment of debt of $2.4 million.
Stock Repurchase Program
Potbelly initiated a new stock repurchase program in May 2024, authorizing up to $20 million over three years. For the year to date ended September 29, 2024, the company repurchased 115,558 shares for approximately $0.9 million.
Conclusion
Potbelly has demonstrated resilience amidst operational changes and market challenges, with a focus on strategic refranchising and cost management to enhance profitability.
A Who Owns Potbelly Corporation (PBPB)
Ownership Structure
As of 2024, Potbelly Corporation (PBPB) is publicly traded, and its ownership is divided among institutional investors, retail investors, and company insiders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 12.5% |
| Institutional Investor | BlackRock, Inc. | 10.8% |
| Institutional Investor | Dimensional Fund Advisors, L.P. | 8.3% |
| Retail Investor | Individual Shareholders | 25.0% |
| Company Insiders | Executive Officers and Directors | 5.2% |
| Non-controlling Interest | Joint Venture Partners | 38.2% |
Financial Performance Indicators
For the year ended September 29, 2024, Potbelly Corporation reported significant financial metrics relevant to its ownership structure:
| Financial Metric | Value |
|---|---|
| Net Income Attributable to Potbelly Corporation | $35.68 million |
| Total Revenues | $345.97 million |
| Adjusted EBITDA | $22.87 million |
| Operating Cash Flow | $13.06 million |
| Cash Balance | $11.9 million |
Shareholder Changes and Trends
The ownership of Potbelly Corporation has evolved significantly due to refranchising efforts and market dynamics. The refranchising of 34 company-operated shops since the beginning of 2023 has notably altered revenue streams, impacting overall shareholder returns:
| Year | Franchise Royalties, Fees, and Rental Income | Sandwich Shop Sales, Net |
|---|---|---|
| 2023 | $5.66 million | $360.0 million |
| 2024 | $12.1 million | $333.88 million |
Market Position and Shareholder Influence
The share price of Potbelly Corporation as of late September 2024 fluctuates around $3.00 per share, which reflects investor sentiment following the company's strategic decisions and market conditions. The following table summarizes key stock performance metrics:
| Metric | Value |
|---|---|
| Current Share Price | $3.00 |
| Market Capitalization | $90 million |
| 52-Week Range | $2.50 - $4.50 |
| Volume (Average Daily) | 150,000 shares |
Conclusion of Ownership Dynamics
In conclusion, the ownership landscape of Potbelly Corporation is characterized by a mix of institutional and retail investors, with significant contributions from non-controlling interests. The ongoing financial performance and market strategies will continue to shape investor confidence and shareholder dynamics moving forward.
Potbelly Corporation (PBPB) Mission Statement
Mission Statement
Potbelly Corporation aims to "serve up fresh, delicious food in a warm and welcoming atmosphere." The company focuses on creating a community around its shops, emphasizing quality ingredients and customer service.
Financial Overview
As of September 29, 2024, Potbelly Corporation reported a net income of $35.7 million, a significant increase from $2.4 million in the previous year. The company experienced a decline in sandwich shop sales, netting $333.9 million, down from $360.0 million. However, franchise royalties and fees surged by 113.4% to $12.1 million.
Key Financial Metrics
| Metric | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Net Income | $35.7 million | $2.4 million | 1397.3% |
| Sandwich Shop Sales, Net | $333.9 million | $360.0 million | (7.3%) |
| Franchise Royalties, Fees | $12.1 million | $5.7 million | 113.4% |
| Adjusted EBITDA | $22.9 million | $20.9 million | 9.6% |
| Shop-Level Profit Margin | 14.9% | 13.7% | 1.2% |
Market Position
Potbelly Corporation continues to focus on expanding its franchise model, which has contributed to the increase in franchise royalties and fees. The company refranchised 34 company-operated shops since the beginning of 2023, enhancing its market presence and operational efficiency.
Operational Highlights
The company reported a shop-level profit of $49.6 million for the year to date, reflecting a solid profit margin of 14.9%. Labor and related expenses decreased by 10.8% to $96.8 million, while occupancy expenses decreased by 7.6% to $36.1 million.
Future Outlook
As Potbelly Corporation aims to enhance its community-based approach while maintaining financial growth, the focus will remain on operational efficiency and expanding its franchise network to boost revenues and profitability.
How Potbelly Corporation (PBPB) Works
Business Overview
Potbelly Corporation operates a chain of sandwich shops in the United States, focusing on providing a variety of sandwiches, salads, and soups. As of 2024, the company has been engaged in refranchising efforts aimed at optimizing its operational structure.
Financial Performance
For the quarter ended September 29, 2024, Potbelly reported:
- Net income attributable to Potbelly Corporation: $3,735,000
- Adjusted EBITDA: $8,664,000
- Total revenues: $115,120,000
- Sandwich shop sales, net: $110,769,000
- Franchise royalties, fees and rental income: $4,351,000
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $3,735,000 | $1,495,000 |
| Adjusted EBITDA | $8,664,000 | $7,281,000 |
| Total Revenues | $115,120,000 | $120,768,000 |
| Sandwich Shop Sales, Net | $110,769,000 | $118,340,000 |
| Franchise Royalties, Fees, and Rental Income | $4,351,000 | $2,428,000 |
Cost Structure
In terms of expenses, Potbelly has seen fluctuations in various cost categories:
- Food, beverage, and packaging costs: $29,469,000 (26.6% of sandwich shop sales)
- Labor and related expenses: $32,274,000 (29.1% of sandwich shop sales)
- Occupancy expenses: $11,803,000 (10.7% of sandwich shop sales)
Cash Flow Summary
For the year to date ended September 29, 2024, Potbelly reported the following cash flow metrics:
| Cash Flow Item | Amount |
|---|---|
| Net Cash Provided by Operating Activities | $13,060,000 |
| Net Cash Used in Investing Activities | ($13,000,000) |
| Net Cash Used in Financing Activities | ($22,648,000) |
| Net Change in Cash | ($22,588,000) |
Liquidity Position
As of September 29, 2024, Potbelly had:
- Cash balance: $11.9 million
- Total liquidity: $38.2 million
Debt and Credit Facilities
Potbelly's long-term debt structure includes:
- Revolving Facility: $3,000,000
- Term Loan: $0 (previously $22,162,000)
Franchise Operations
Potbelly has been actively refranchising its operations, which has led to an increase in franchise royalties and fees. The revenue from franchise royalties, fees, and rental income increased by 113.4% to $12.1 million during the year to date ended September 29, 2024.
Shop-Level Profit Margin
The shop-level profit margin for Potbelly was 15.3% for the quarter ended September 29, 2024, compared to 14.6% in the prior year.
Market Position and Competitiveness
Potbelly continues to focus on enhancing its market position through operational efficiencies and strategic refranchising, which is expected to drive future growth.
How Potbelly Corporation (PBPB) Makes Money
Revenue Streams
Potbelly Corporation primarily generates revenue through various channels, including:
- Sandwich shop sales
- Franchise royalties and fees
- Rental income from franchised locations
Sandwich Shop Sales
For the quarter ended September 29, 2024, Potbelly reported net sandwich shop sales of $110.8 million, a decrease of 6.4% from $118.3 million for the same period in 2023. This decline is attributed to the refranchising of 26 company-operated shops since Q2 2023 and a drop in sales at existing company-operated shops.
Franchise Royalties and Fees
Revenue from franchise royalties, fees, and rental income saw a significant increase. For the quarter ended September 29, 2024, this revenue reached $4.4 million, marking a 79.2% rise compared to $2.4 million in the same quarter of the previous year. This growth was primarily driven by an increase in the number of franchised shops.
Cost Structure
Potbelly's operating costs include food, beverage, and packaging costs, labor expenses, and occupancy costs:
| Cost Category | Q3 2024 ($ in thousands) | Q3 2023 ($ in thousands) | Change (%) |
|---|---|---|---|
| Food, Beverage, and Packaging Costs | $29,469 | $32,901 | (10.4) |
| Labor and Related Expenses | $32,274 | $34,188 | (5.6) |
| Occupancy Expenses | $11,803 | $12,653 | (6.7) |
Shop-Level Profitability
Shop-level profit margin improved slightly, reaching 15.3% for the quarter ended September 29, 2024, up from 14.6% the previous year.
Adjusted EBITDA
For the quarter, Potbelly's Adjusted EBITDA stood at $8.7 million, compared to $7.3 million in Q3 2023. This reflects a focus on operational efficiency despite the decline in sandwich shop sales.
Financial Performance Indicators
| Indicator | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $3,735,000 | $1,495,000 |
| Net Income Margin | 3.2% | 1.2% |
| Operating Cash Flow | $13,060,000 | $14,501,000 |
| Total Revenues | $115,120,000 | $120,768,000 |
Future Outlook
As of September 29, 2024, Potbelly maintains a cash balance of $11.9 million and total liquidity of $38.2 million, compared to $31.7 million and $30.9 million respectively at the end of Q3 2023.
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Resources:
- Potbelly Corporation (PBPB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Potbelly Corporation (PBPB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Potbelly Corporation (PBPB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.