Q3 Modern Fast Food Earnings Review: First Prize Goes to Potbelly (NASDAQ:PBPB)

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Q3 Modern Fast Food Earnings Review: First Prize Goes to Potbelly (NASDAQ:PBPB)

Looking back on modern fast food stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Potbelly (NASDAQ:PBPB) and its peers.

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.

The 6 modern fast food stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.1% since the latest earnings results.

Best Q3: Potbelly (NASDAQ:PBPB)

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.

Potbelly reported revenues of $115.1 million, down 4.7% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EPS and EBITDA estimates.

Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “During the third quarter, our team once again demonstrated the effectiveness of our five-pillar strategic plan amidst a dynamic consumer environment. Our app and Potbelly Perks program drove a positive shift in our comp trajectory and engagement with our brand, while our $7.99 everyday value platform supported sales and traffic; We achieved a 70-basis point year-over-year improvement in our shop profit margins; metered our G&A spend to deliver EBITDA growth; and opened eight new shops with our franchise partners as we further accelerate our unit growth. While I’m thrilled with what we’ve accomplished together to date, I believe the future for Potbelly is even brighter.”

Potbelly Total Revenue
Potbelly Total Revenue

Potbelly achieved the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 18.9% since reporting and currently trades at $9.81.

Is now the time to buy Potbelly? Access our full analysis of the earnings results here, it’s free.

Shake Shack (NYSE:SHAK)

Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE:SHAK) is a fast-food restaurant known for its burgers and milkshakes.

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