The following is a summary of the Potbelly Corporation (PBPB) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Potbelly Corporation reported Q1 revenues of $111.2 million, a decrease of approximately 6.0% primarily due to the short-term revenue impact of the previous year's refranchising transaction.

• The company experienced improvements in food, beverage, and packaging costs, which made up 27.2% of shop sales, a 70 basis point improvement over the prior-year period.

• Labor expenses improved to 30.0% of sales, a 120 basis point betterment from the previous year.

• The net loss for the quarter was reported at $2.8 million, majorly due to the accounting treatment of debt refinancing. But the adjusted net income stood at $0.2 million.

• The Potbelly's Board of Directors authorized a $20 million share repurchase program, indicating confidence in business sustainability and strong balance sheet.

Business Progress:

• The franchise sales team added 32 additional commitments to the pipeline during the quarter, and three new shops were opened.

• Digital sales accounted for about 41% of total shop sales, a 200 basis point increase YoY because of progress in their Perks loyalty program, which saw a 36% YoY rise in active members.

• The company set a goal of attaining 10% unit growth and mid- to high-single-digit adjusted EBITDA growth for FY 2024.

• They plan to open more franchises with new, digitally-centric shop prototypes expected to launch in Arkansas soon.

• The company mentioned progress in digitalisation, reduction of exposure to third-party delivery, and labour optimization, with plans to expand their digital kitchen and operations.

More details: Potbelly IR

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