On this page of StockholderLetter.com we present the latest annual shareholder letter from POTBELLY CORP — ticker symbol PBPB. Reading current and past PBPB letters to shareholders can bring important insights into the investment thesis.
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Dear Potbelly Stockholders,
I am proud of what our team accomplished in 2023 on our way to realizing our vision of becoming the most
loved sandwich brand in every neighborhood. It was a year when many of the components of our Five-Pillar
strategy showed their true promise as we moved forward into the early stages of our long-term sustainable
growth trajectory.
Traffic-Driven Profitability
We lived up to our focus on traffic-driven profitability to establish a formula for sustainable value creation.
Indeed, traffic was the primary driver of growth for the brand in 2023, as we delighted customers with our
one-of-a-kind Sideways service, excited them with our innovative digital marketing and promotions like our
week of Perks, meatball madness, and our in-app only underground menu. We are a fast casual restaurant
company with superior quality across our menu of sandwiches, soups, salads, and desserts. We satisfied our
customers    hunger as only Potbelly can, with favorites like A Wreck sandwich and oatmeal chocolate chip
cookies, as well as innovative LTOs like the Ring of Fire. Our Perks loyalty program engaged and rewarded our
members while showcasing the best part of our brand     the food     and achieved spectacular growth through the
year.
The results were strong: 12.0% growth in same store sales, while simultaneously improving profitability, with a
370-basis point improvement to shop margin achieving 14.2%. Our Adjusted EBITDA grew 80%. We achieved
our three-year average unit volume target of $1.3 million a year early.
Franchise Growth Acceleration Initiative
We are most excited about the progress we made on our transformation toward becoming a franchise business
through our Franchise Growth Acceleration Initiative. In 2023, we expanded our existing base of franchisees
from coast to coast, executing Shop Development Area Agreements with talented multi-unit operators
enthusiastic about growing with our brand. We added the leadership, talent, and processes to end 2023 with
612 open and committed shops while we work toward our potential of more than 2000 shops in the U.S. with our
current and new franchisee partners.
Long-Term Growth Framework
We are eager to introduce our new long-term goals that we see as a framework we can sustain over time. This
includes same-store-sales growth in the low to mid-single-digits, unit growth in the low-double-digits, and
Adjusted EBITDA growth in the low to mid-double-digits. These are challenging goals, but they are achievable
and are aligned with how we operate our business. Importantly, we already have the plans in place to achieve
these targets.
Our success starts with our great food and the relationship between our customers and Potbelly team members.
That was true in 2023 and will underpin our future success. We have laid the foundation as a growth company,
and with our Five-Pillar strategic plan, we are on the right track to capitalize on the opportunities ahead. I look
forward to another great year of carrying out our mission - to delight customers with great food and good vibes.
Sincerely,
Robert D. Wright
President and Chief Executive Officer
 • shareholder letter icon 4/5/2024 Letter Continued (Full PDF)
 • stockholder letter icon 4/5/2023 PBPB Stockholder Letter
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 • Benford's Law Stocks icon PBPB Benford's Law Stock Score = 63


PBPB Shareholder/Stockholder Letter Transcript:

3


Dear Potbelly Stockholders,
I am proud of what our team accomplished in 2023 on our way to realizing our vision of becoming the most
loved sandwich brand in every neighborhood. It was a year when many of the components of our Five-Pillar
strategy showed their true promise as we moved forward into the early stages of our long-term sustainable
growth trajectory.
Traffic-Driven Profitability
We lived up to our focus on traffic-driven profitability to establish a formula for sustainable value creation.
Indeed, traffic was the primary driver of growth for the brand in 2023, as we delighted customers with our
one-of-a-kind Sideways service, excited them with our innovative digital marketing and promotions like our
week of Perks, meatball madness, and our in-app only underground menu. We are a fast casual restaurant
company with superior quality across our menu of sandwiches, soups, salads, and desserts. We satisfied our
customers    hunger as only Potbelly can, with favorites like A Wreck sandwich and oatmeal chocolate chip
cookies, as well as innovative LTOs like the Ring of Fire. Our Perks loyalty program engaged and rewarded our
members while showcasing the best part of our brand     the food     and achieved spectacular growth through the
year.
The results were strong: 12.0% growth in same store sales, while simultaneously improving profitability, with a
370-basis point improvement to shop margin achieving 14.2%. Our Adjusted EBITDA grew 80%. We achieved
our three-year average unit volume target of $1.3 million a year early.
Franchise Growth Acceleration Initiative
We are most excited about the progress we made on our transformation toward becoming a franchise business
through our Franchise Growth Acceleration Initiative. In 2023, we expanded our existing base of franchisees
from coast to coast, executing Shop Development Area Agreements with talented multi-unit operators
enthusiastic about growing with our brand. We added the leadership, talent, and processes to end 2023 with
612 open and committed shops while we work toward our potential of more than 2000 shops in the U.S. with our
current and new franchisee partners.
Long-Term Growth Framework
We are eager to introduce our new long-term goals that we see as a framework we can sustain over time. This
includes same-store-sales growth in the low to mid-single-digits, unit growth in the low-double-digits, and
Adjusted EBITDA growth in the low to mid-double-digits. These are challenging goals, but they are achievable
and are aligned with how we operate our business. Importantly, we already have the plans in place to achieve
these targets.
Our success starts with our great food and the relationship between our customers and Potbelly team members.
That was true in 2023 and will underpin our future success. We have laid the foundation as a growth company,
and with our Five-Pillar strategic plan, we are on the right track to capitalize on the opportunities ahead. I look
forward to another great year of carrying out our mission - to delight customers with great food and good vibes.

Sincerely,
Robert D. Wright
President and Chief Executive Officer



shareholder letter icon 4/5/2024 Letter Continued (Full PDF)
 

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