Q1 2024 Potbelly Corp Earnings Call Transcript
Key Points
- Potbelly Corp reported a 150 basis point expansion in shop level margins year over year to 13.5%, indicating improved profitability.
- Digital sales comprised approximately 41% of total shop sales, showing a significant increase and highlighting successful digital engagement.
- The introduction of an enhanced Potbelly Perks loyalty program has led to a 36% increase in active members year over year, enhancing customer loyalty and engagement.
- Franchise growth remains strong with 32 new franchise commitments added, expanding the pipeline to 642 open and committed shops, a 26% growth from the previous year.
- Introduction of a new shop prototype that reduces square footage by an average of 500 square feet, potentially lowering leasing and construction costs and improving operational efficiency.
- First quarter revenues decreased by approximately 6.0% to $111.2 million, primarily due to the short-term revenue impact of last year's refranchising transactions.
- Same-store sales were slightly down by 0.2% compared to Q1 2023, indicating a marginal decline in store performance.
- The company reported a net loss of $2.8 million for the quarter, mainly driven by the accounting treatment of debt refinancing.
- Other operating expenses increased by 90 basis points compared to the previous year, largely due to increased brand fund spend.
- Despite efforts to improve margins, the company faces challenges in achieving significant same-store sales growth, with guidance suggesting low single-digit growth.
Good afternoon, everyone, and welcome to Potbelly Corporation's first-quarter 2024 earnings conference call. Today's call is being recorded. (Operator Instructions)
On today's call, we have Bob Wright, President and Chief Executive Officer; Steve Cirulis, Senior Vice President and Chief Financial Officer; and Adiya Dixon, Senior Vice President, Chief Legal Officer, and Secretary of Potbelly Corporation. At this time, I'll turn the call over to Adiya Dixon. Please go ahead.
Good afternoon, everyone, and welcome to our first-quarter 2024 earnings call. By now, everyone should have access to our earnings release and accompanying investor presentation. If not, they can be found in the Investors tab of our website.
Before we begin our formal remarks, I need to remind everyone that certain comments made on this call, we will contain forward-looking statements regarding future events or the future financial performance of the Company. Any such statements,
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