Casual sandwich chain Potbelly (NASDAQ:PBPB) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 4.7% year on year to $125.7 million. It made a non-GAAP profit of $0.02 per share, down from its profit of $0.09 per share in the same quarter last year.

Is now the time to buy Potbelly? Find out by accessing our full research report, it's free.

Potbelly (PBPB) Q4 FY2023 Highlights:

• Revenue: $125.7 million vs analyst estimates of $125.2 million (small beat)

• EPS (non-GAAP): $0.02 vs analyst expectations of $0.03 (33.3% miss)

• Same-Store Sales were up 6.3% year on year

• Store Locations: 425 at quarter end, decreasing by 4 over the last 12 months

• Market Capitalization: $392.5 million

Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “I am very proud of what our team accomplished in the 4th quarter and full year 2023. Our Five-Pillar Strategy maintains our focus on what matters most to our customers and associates while growing our brand to the benefit of our franchisees and shareholders. Traffic driven sales, shop level and company profitability and unit growth development efforts headlined our success.”

With a unique origin story where the company actually started as an antique shop, Potbelly (NASDAQ:PBPB) today is a chain known for its toasty sandwiches.

Modern Fast Food

Modern fast food is a relatively newer category representing a middle ground between traditional fast food and sit-down restaurants. These establishments feature an expanded menu selection priced above traditional fast food options, often incorporating fresher and cleaner ingredients to serve customers prioritizing quality. These eateries are capitalizing on the perception that your drive-through burger and fries joint is detrimental to your health because of inferior ingredients.

Sales Growth

Potbelly is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefitting from better brand awareness and economies of scale.

As you can see below, the company's annualized revenue growth rate of 4.7% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.

This quarter, Potbelly grew its revenue by 4.7% year on year, and its $125.7 million in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects revenue to decline 3.1% over the next 12 months, a deceleration from this quarter.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.