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Press Release

Potbelly Corporation Reports Results for Third Fiscal Quarter 2021

November 3, 2021 at 5:00 PM EDT

Achieved same-store-sales of +33.7% and higher AUVs, reaching annualized level of $1.05 million during the third quarter

Achieved third consecutive quarter of shop-level profitability

Finalizing 3-year value driving growth objectives including 1) accelerating AUVs, 2) significantly expanding margins, and 3) escalating new unit development as we transition to more of a franchised system

CHICAGO, Nov. 03, 2021 (GLOBE NEWSWIRE) -- Potbelly Corporation (NASDAQ: PBPB) (“Potbelly” or the “Company”), the iconic neighborhood sandwich shop concept, today reported financial results for the third fiscal quarter ended September 26, 2021.

Third Quarter Strategic Successes:

  • Same-store sales (SSS) trends continued to show improvement, ending the third quarter at +33.7% compared to the year ago period; SSS exceeded 2019 levels, at +4.5% compared to the third quarter of 2019.
  • Third consecutive quarter of Average Unit Volumes (AUV) growth, exceeding $20K/week in the third quarter.
  • National rollout of new menu drove increased revenue, traffic, and higher average check during the quarter.
  • Furthered progress against The Company’s Five-Pillar strategy, with continued revenue strength in digital channels supported by the new tech stack rolled out in the quarter.
  • Finalized staffing the executive leadership team with the appointment of David Daniels as Chief Marketing Officer.
  • Same-store traffic improved +21.3% for the third quarter compared to the third quarter 2020, with Suburban, Drive-Thru and University shops reporting positive same-store traffic growth compared to the third quarter 2019.

Key highlights for the thirteen weeks ended September 26, 2021 compared to September 27, 2020:  

  • Total revenues increased by 40% to $101.7 million compared to $72.7 million.
  • GAAP net loss attributable to Potbelly Corporation was ($2.9) million, compared to a GAAP net loss of ($13.4) million. GAAP diluted loss per share was ($0.10) compared to a GAAP diluted loss per share of ($0.56).
  • Adjusted net loss1 attributable to Potbelly Corporation was ($1.5) million compared to an adjusted net loss of ($10.0) million. Adjusted diluted EPS1 was a loss of ($0.05) compared to an adjusted diluted EPS loss of ($0.42).
  • EBITDA1 increased significantly to $0.9 million compared to an EBITDA loss of ($11.4) million.
  • Adjusted EBITDA1 improved meaningfully to $2.7 million compared to Adjusted EBITDA loss of ($7.3) million. Adjusted EBITDA1 improved for the fifth sequential quarter, despite macro-economic challenges.
  • Company paid approximately $2.0 million of $11.3 million of 2020 deferred cash payments in the quarter, bringing the cumulative amount paid to approximately $8.0 million.
  • On September 26, 2021, total liquidity was $28.3 million, including $9.8 million of cash on hand and $18.5 million available under the revolving credit facility.

Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “I am extremely proud of our team, and I’m pleased with our performance in the third quarter, which delivered notable top-line expansion. Our disciplined focus on Potbelly’s five-pillar strategy, including the successful rollout of our upgraded menu and new tech stack drove strong results for the quarter, helping us offset labor and other inflationary headwinds impacting the restaurant industry and the broader economy. During the quarter, we continued to see strong sales growth across our Urban, Suburban, Drive-Thru, and University locations. CBD and Airport shops made further progress on their path towards recovery as well. Potbelly’s continued digital strength coupled with sequential growth in dine-in business further contributed to the Company’s success in the quarter. Importantly, we continue to see positive responses from customers since the rollout of our new menu, release of our new tech stack and scaling of our digital media campaigns.”

“As we enter the final quarter of 2021, our primary focus is the continued execution of the Company’s business priorities. We are also finalizing our three-year strategic growth plan,” Wright added. “We’re taking a longer-range view on our five-pillar strategy and growth objectives, with a focus on identifying the recipe for growth that will become the foundation of Potbelly’s value creation model. The elements of that growth plan will include targeting a significantly higher AUV, expanding margins beyond historical levels, and escalating new unit development as we transition to more of a franchised system. We are very excited to finalize our growth plan which we believe will deliver value to all of our stakeholders. We will provide further updates on these goals in early 2022.”

Steve Cirulis, Chief Financial Officer, concluded, “We achieved solid financial performance during the third quarter, delivering our second consecutive quarter of positive EBITDA and Adjusted EBITDA, and our third consecutive quarter of shop-level profitability. As we progress through the remainder of 2021 and enter 2022, we’ll continue to navigate the headwinds driven by macro-economic issues including labor constraints, higher wage costs, and other inflationary dynamics. Potbelly is aggressively implementing mitigating actions which include accelerating recruiting efforts and taking pricing action as necessary in accordance with cost cutting initiatives. As we continue to see our dedicated customers return to shops across our portfolio, we are confident in Potbelly’s ability to achieve future growth.”

Conference Call

A conference call and audio webcast has been scheduled for 8:00 a.m. Eastern Time tomorrow, November 4, 2021, to discuss the third quarter 2021 results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call with accompanying presentation slides, available on the investor relations portion of the Company's website at For those that cannot join the webcast, you can participate by dialing 1-877-407-0784 in the U.S. & Canada, or 1-201-689-8560 internationally, using the confirmation code of 13724391.

For those unable to participate, an audio replay will be available from 11:00 a.m. Eastern Time on Thursday, November 4, 2021, through midnight Thursday, November 11, 2021. To access the replay, please call 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13724391. A web-based archive of the conference call will also be available on the Potbelly website.

About Potbelly

Potbelly Corporation is a neighborhood sandwich concept that has been feeding customers’ smiles with warm, toasty sandwiches, signature salads, hand-dipped shakes and other fresh menu items, customized just the way customers want them, for more than 40 years. Potbelly promises Fresh, Fast & Friendly service in an environment that reflects the local neighborhood. Since opening its first shop in Chicago in 1977, Potbelly has expanded to neighborhoods across the country - with approximately 400 company-owned shops in the United States. Additionally, Potbelly franchisees operate over 40 shops in the United States. For more information, please visit our website at


The following definitions apply to these terms as used throughout this press release:

  • Revenues – represents net company-operated sandwich shop sales and our franchise operations. Net company-operated shop sales consist of food and beverage sales, net of promotional allowances and employee meals. Franchise royalties and fees consist of an initial franchise fee, a franchise development agreement fee and royalty income from the franchisee.
  • Company-operated comparable store sales or same-store traffic – represents the change in year-over-year sales or transactions for the comparable company-operated store base open for 15 months or longer.
  • Average Unit Volumes (AUV) – represents the average sales of all company-operated shops which reported sales during the associated time period.
  • EBITDA – represents income before depreciation and amortization expense, interest expense and the provision for income taxes.
  • Adjusted EBITDA – represents income before depreciation and amortization expense, interest expense and the provision for income taxes, adjusted to eliminate the impact of other items, including certain non-cash as well as other items that we do not consider representative of our ongoing operating performance.
  • Shop-level profit – represents income (loss) from operations less franchise royalties and fees, general and administrative expenses, depreciation expense, pre-opening costs, restructuring costs and impairment, loss on the disposal of property and equipment and shop closures.
  • Shop-level profit margin – represents shop-level profit expressed as a percentage of net company-operated sandwich shop sales.

1Non-GAAP Financial Measures

We prepare our financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”). Within this press release, we make reference to EBITDA, adjusted EBITDA, adjusted diluted EPS, adjusted net loss, shop-level profit, and shop-level profit margin, which are non-GAAP financial measures. The Company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

Management uses adjusted EBITDA, adjusted net income and adjusted diluted EPS to evaluate the Company’s performance and in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. Adjusted EBITDA, adjusted net income and adjusted diluted EPS exclude the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Management uses shop-level profit and shop-level profit margin as key metrics to evaluate the profitability of incremental sales at our shops, to evaluate our shop performance across periods and to evaluate our shop financial performance against our competitors.

Accordingly, the Company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the Company’s operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the Company’s financial statements and footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies. For more information on the non-GAAP financial measures, please refer to the table, “Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures.”

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. Forward-looking statements, written, oral or otherwise made, represent the Company’s expectation or belief concerning future events. Without limiting the foregoing, the words “believes,” “expects,” “may,” “might,” “will,” “should,” “seeks,” “intends,” “plans,” “strives,” “goal,” “estimates,” “forecasts,” “projects” or “anticipates” or the negative of these terms and similar expressions are intended to identify forward-looking statements. Forward-looking statements included in this press release may include, among others, statements relating to our future financial position and results of operations, business strategy, our ability to achieve future growth and deliver value for our shareholders and our outlook for the remainder of 2021. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement, due to reasons including, but not limited to, risks related to the COVID-19 outbreak; compliance with our Credit Agreement covenants; competition; general economic conditions; our ability to successfully implement our business strategy; the success of our initiatives to increase sales and traffic; changes in commodity, energy and other costs; our ability to attract and retain management and employees; consumer reaction to industry-related public health issues and perceptions of food safety; our ability to manage our growth; reputational and brand issues; price and availability of commodities; consumer confidence and spending patterns; and weather conditions. In addition, there may be other factors of which we are presently unaware or that we currently deem immaterial that could cause our actual results to be materially different from the results referenced in the forward-looking statements. All forward-looking statements contained in this press release are qualified in their entirety by this cautionary statement. Although we believe that our plans, intentions and expectations are reasonable, we may not achieve our plans, intentions or expectations. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Cautionary Statement on Forward-Looking Statements” included in our most recent annual report on Form 10-K and other risk factors described from time to time in subsequent quarterly reports on Form 10-Q or other subsequent filings, all of which are available on our website at The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.


Lisa Fortuna or Ashley Gruenberg
Alpha IR Group

Potbelly Corporation
Consolidated Statements of Operations and Margin Analysis – Unaudited
(Amounts in thousands, except per share data)

 For the 13 Weeks Ended  For the 39 Weeks Ended 
 September 26,  % of  September 27,  % of  September 26,  % of  September 27,  % of 
 2021  Revenue  2020  Revenue  2021  Revenue  2020  Revenue 
Sandwich shop sales, net$100,996   99.3% $72,189   99.3% $275,274   99.3% $215,013   99.4%
Franchise royalties and fees 698   0.7   474   0.7   1,974   0.7   1,402   0.6 
Total revenues 101,694   100.0   72,663   100.0   277,248   100.0   216,415   100.0 
(Percentages stated as a percent of sandwich shop sales, net)                               
Sandwich shop operating expenses                               
Cost of goods sold, excluding depreciation 28,225   27.9   20,721   28.7   76,035   27.6   61,003   28.4 
Labor and related expenses 33,087   32.8   25,809   35.8   93,662   34.0   78,090   36.3 
Occupancy expenses 13,437   13.3   13,904   19.3   40,598   14.7   43,581   20.3 
Other operating expenses 16,312   16.2   12,126   16.8   44,343   16.1   35,881   16.7 
(Percentages stated as a percent of total revenues)                               
Advertising 896   0.9   233   0.3   1,740   0.6   794   0.4 
General and administrative expenses 7,612   7.5   9,588   13.2   24,275   8.8   27,300   12.6 
Depreciation expense 3,610   3.5   4,699   6.5   12,337   4.4   15,110   7.0 
Pre-opening costs   *     *   -  *   64  * 
Impairment, loss on disposal of property and equipment and shop closures 1,118   1.1   1,721   2.4   4,497   1.6   9,602   4.4 
Total expenses 104,297  >100   88,801  >100   297,487  >100   271,425  >100 
Loss from operations (2,603)  (2.6)  (16,138)  (22.2)  (20,239)  (7.3)  (55,010)  (25.4)
Interest expense, net 241   0.2   268   0.4   713   0.3   730   0.3 
Loss before income taxes (2,844)  (2.8)  (16,406)  (22.6)  (20,952)  (7.6)  (55,740)  (25.8)
Income tax expense (benefit) 16   0.0   (2,917) (4.0)  230   0.1   (6,585) (3.0)
Net loss (2,860)  (2.8)  (13,489)  (18.6)  (21,182)  (7.6)  (49,155)  (22.7)
Net loss attributable to non-controlling interest 88   0.1   (77) *   119  *   (191)  (0.1)
Net loss attributable to Potbelly Corporation$(2,948)  (2.9)% $(13,412)  (18.5)% $(21,301)  (7.7)% $(48,964)  (22.6)%
Net loss per common share attributable to common shareholders:                               
Basic$(0.10)     $(0.56)     $(0.78)     $(2.06)    
Diluted$(0.10)     $(0.56)     $(0.78)     $(2.06)    
Weighted average common shares outstanding:                               
Basic 28,264       23,957       27,395       23,792     
Diluted 28,264       23,957       27,395       23,792     

Potbelly Corporation
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures – Unaudited
(Amounts in thousands, except per share data)

 For the 13 Weeks Ended  For the 39 Weeks Ended 
 September 26,  September 27,  September 26,  September 27, 
 2021  2020  2021  2020 
Net loss attributable to Potbelly Corporation, as reported$(2,948) $(13,412) $(21,301) $(48,964)
Impairment, loss on disposal of property and equipment and shop closures(1) 1,118   1,721   4,497   9,602 
CEO transition costs(2)    769      769 
Proxy related costs(3)          1,039 
Total adjustments before income tax 1,118   2,490   4,497   11,410 
Income tax adjustments(4) 338   908   3,946   4,953 
Total adjustments after income tax 1,456   3,398   8,443   16,363 
Adjusted net loss attributable to Potbelly Corporation$(1,492) $(10,014) $(12,858) $(32,601)
Net loss attributable to Potbelly Corporation per share, basic$(0.10) $(0.56) $(0.78) $(2.06)
Net loss attributable to Potbelly Corporation per share, diluted$(0.10) $(0.56) $(0.78) $(2.06)
Adjusted net loss attributable to Potbelly Corporation per share, basic$(0.05) $(0.42) $(0.47) $(1.37)
Adjusted net loss attributable to Potbelly Corporation per share, diluted$(0.05) $(0.42) $(0.47) $(1.37)
Shares used in computing adjusted net loss attributable to Potbelly Corporation:               
Basic 28,264   23,957   27,395   23,792 
Diluted 28,264   23,957   27,395   23,792 

  For the 13 Weeks Ended  For the 39 Weeks Ended 
  September 26,  September 27,  September 26,  September 27, 
  2021  2020  2021  2020 
Net loss attributable to Potbelly Corporation, as reported $(2,948) $(13,412) $(21,301) $(48,964)
Depreciation expense  3,610   4,699   12,337   15,110 
Interest expense, net  241   268   713   730 
Income tax expense (benefit)  16   (2,917)  230   (6,585)
EBITDA $919  $(11,362) $(8,021) $(39,709)
Impairment, loss on disposal of property and equipment and shop closures(1)  1,118   1,721   4,497   9,602 
Stock-based compensation  640   1,608   1,488   2,480 
CEO transition costs(2)     769      769 
Proxy related costs(3)           1,039 
Adjusted EBITDA $2,677  $(7,264) $(2,036) $(25,819)

Potbelly Corporation
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures – Unaudited
(Amounts in thousands, except per share data)

  For the 13 Weeks Ended  For the 39 Weeks Ended 
  September 26,  September 27,  September 26,  September 27, 
  2021  2020  2021  2020 
Loss from operations $(2,603) $(16,138) $(20,239) $(55,010)
Less: Franchise royalties and fees  698   474   1,974   1,402 
Advertising  896   233   1,740   794 
General and administrative expenses  7,612   9,588   24,275   27,300 
Depreciation expense  3,610   4,699   12,337   15,110 
Pre-opening costs           64 
Impairment, loss on disposal of property and equipment and shop closures  1,118   1,721   4,497   9,602 
Shop-level profit (loss) [Y] $9,935  $(371) $20,636  $(3,542)
Total revenues $101,694  $72,663  $277,248  $216,415 
Less: Franchise royalties and fees  698   474   1,974   1,402 
Sandwich shop sales, net [X] $100,996  $72,189  $275,274  $215,013 
Shop-level profit (loss) margin [Y÷X]  9.8%  -0.5%  7.5%  -1.6%

  For the 13 Weeks Ended  For the 39 Weeks Ended 
  September 26,  September 27,  September 26,  September 27, 
  2021  2020  2021  2020 
Selected Operating Data                
Shop Activity:                
Company-operated shops, end of period 397  406  397  406 
Franchise shops, end of period 46  46  46  46 
Revenue Data:                
Company-operated comparable store sales  33.7%  (21.0)%  29.1%  (24.2)%

Footnotes to the Press Release, Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
& Selected Operating Data

(1) This adjustment includes costs related to impairment of long-lived assets, loss on disposal of property and equipment and shop closure expenses.
(2) The Company incurred certain costs related to the transition between the current and former CEO in 2020. Transition costs were included in general and administrative expenses in the consolidated statement of operations.
(3) The Company incurred certain professional and other costs and associated benefits related to the shareholder proxy matter.
(4) This adjustment includes the tax impacts of the other adjustments listed above based on the Company’s effective tax rate, the change in the Company’s income tax valuation allowance during the period, and the discrete income tax benefit from the carryback of prior year net operating losses and refund of prior year alternative minimum tax credits.