Potbelly Falls as Profit Forecast Trails EstimatesLeslie Patton
Potbelly Corp., the hot-sandwich seller that went public nine months ago, dropped the most since its October initial public offering after its annual profit forecast and quarterly sales trailed analysts’ estimates.
The shares tumbled 25 percent to $10.97 at the close in New York for the biggest decline ever. Potbelly has fallen 55 percent this year, while the Standard & Poor’s 500 Index gained 6.3 percent.
Adjusted profit this year will be as much as 21 cents a share, the Chicago-based company said in a statement. Analysts estimated 34 cents a share, the average of four projections compiled by Bloomberg. Preliminary second-quarter revenue rose 6.9 percent to about $83.6 million, while analysts estimated $86.7 million.
Potbelly, with more than 300 locations in the U.S., has been trying to boost sales with store openings and by selling new lower-calorie flatbread sandwiches. Same-store sales at company-operated locations fell 1.6 percent in the second quarter after dropping 2.2 percent in the previous quarter.
The new flatbread options may have hurt sales of other sandwiches instead of helping customer traffic, Sharon Zackfia, an analyst at William Blair & Co. in Chicago, said in a research note.
The chain plans to release full second-quarter results on Aug. 5.