Potbelly (PBPB) Q1 2025 earnings summary

Executive summary

• System-wide sales grew 4.8%–5% year-over-year to $140.7 million, with same-store sales up 0.9% and total revenue rising 2.3% to $113.7 million in Q1 2025.

• Adjusted EBITDA was $5.5 million, slightly down year-over-year due to a prior-year settlement benefit, but above guidance.

• Net loss narrowed to $62,000–$100,000 from $2.8 million in the prior year, with adjusted net income at breakeven.

• Franchise expansion accelerated, with 40 new shop commitments and a clear path to at least 38 new openings in 2025.

• Digital sales penetration exceeded 42% of shop sales, up 200 basis points year-over-year.

Financial highlights

• Company-operated shop revenue increased 1.3% to $109.0 million; franchise revenue surged 30.8% to $4.7 million, driven by a 26% increase in franchise units.

• Shop-level margin improved to 13.7%, up 20 basis points year-over-year.

• Average weekly sales per shop rose to $24,550 from $24,250 year-over-year.

• Food, beverage, and packaging costs improved to 26.1% of shop sales, aided by commodity deflation.

• Labor expenses rose to 30.4% of sales, mainly due to lapping a prior-year settlement benefit.

Outlook and guidance

• Full-year 2025 guidance: same-store sales growth of 1.5%–2.5%, at least 38 new unit openings, and adjusted EBITDA of $33–$34 million.

• Q2 2025 guidance: same-store sales growth of 1.5%–2.5%, at least 6 new units, and adjusted EBITDA of $8.25–$9.75 million.

• Pricing actions planned for the year to address input cost inflation, with a full-year gross price increase just north of 3%.

• Long-term targets include low- to mid-single digit same-store sales CAGR and low double-digit new unit growth.