Potbelly Corporation PBPB is scheduled to release fourth-quarter fiscal 2023 results on Mar 7. In the last reported quarter, the company posted an earnings surprise of 100%.

How Are Estimates Placed?

The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) is pegged at 2 cents, indicating a decline of 77.8% from 9 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $125.8 million. The metric suggests growth of 4.7% from the year-ago quarter’s figure.

Potbelly Corporation Price and EPS Surprise

 

Potbelly Corporation price-eps-surprise | Potbelly Corporation Quote

 

Let’s analyze the factors likely to impact the company’s performance in the quarter to be reported.

Factors at Play

PBPB’s fiscal fourth-quarter top line is expected to increase from the year-ago levels, courtesy of continued strength in digital engagement, strong traffic and unit expansion efforts. Also, the focus on marketing initiatives and the rollout of Potbelly Digital Kitchen are likely to have aided the company’s performance in the to-be-reported quarter.

Recently, the company provided a business update revealing same-store sales growth ranging from 5.9% to 6.4%, surpassing the previously projected 4-6% range. The increase was primarily driven by a surge in customer traffic, supported by stronger-than-expected Average Weekly Sales (AWS). Potbelly's adherence to its Five-Pillar Strategy contributed to the positive outcome. During the quarter, the company reported AWS ranging from $24,870 to $24,970, exceeding their initial estimates of $24,250-$24,750. The company stated that the results are preliminary and subject to the completion of normal year-end accounting procedures.

Prudent cost control is likely to have aided the company’s performance in the fiscal fourth quarter. The company anticipates fiscal fourth quarter adjusted EBITDA to be between $5 million and $7 million.

However, high labor costs and increased marketing and advertising expenses are likely to have dented the bottom line in the fiscal fourth quarter.

What Our Model Says

Our proven model does not predict an earnings beat for Potbelly this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Potbelly has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.