Potbelly Corporation reported its financial results for the quarter and year-to-date ending June 29, 2025, revealing a total revenue of $123.7 million for the quarter, a 3.4% increase from $119.7 million in the same period last year. Year-to-date revenue also saw a rise, reaching $237.4 million compared to $230.9 million in the prior year. The increase in revenue was primarily driven by a 2.5% rise in sandwich shop sales, which totaled $118.4 million, and a significant 27.6% increase in franchise royalties, fees, and rent income, amounting to $5.3 million.
Despite the revenue growth, Potbelly's net income experienced a substantial decline, dropping to $2.9 million for the quarter, down 91.7% from $34.9 million in the previous year. This decline was attributed to a one-time income tax benefit of $31.3 million recognized in the prior year, which was not repeated in the current period. The company also reported a decrease in operating income, which fell to $3.7 million from $4.1 million year-over-year, reflecting increased operating expenses, including a 12.6% rise in general and administrative costs.
Operationally, Potbelly operated 340 company-operated shops and 107 franchise-operated shops as of June 29, 2025. The company opened three new company-operated shops and nine franchise-operated shops during the year, while closing five company-operated shops. The same-store sales growth was reported at 3.2%, indicating a positive trend in customer traffic and sales at existing locations. The shop-level profit margin improved to 16.7% for the quarter, up from 15.7% in the previous year, suggesting enhanced operational efficiency.
In terms of strategic developments, Potbelly has been focusing on its Franchise Growth Acceleration Initiative, which aims to expand its franchise network through multi-unit agreements. The company has also implemented a stock repurchase program, authorizing up to $20 million for share buybacks, with $1.0 million spent in the current quarter. Looking ahead, Potbelly remains optimistic about its growth strategy, emphasizing its commitment to enhancing customer experiences and expanding its market presence, while navigating challenges such as rising labor and commodity costs. The company believes its operational strategies will support continued revenue growth and improved profitability in the future.
About POTBELLY CORP
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