Consumers’ return to urban markets continues to be a big win for Potbelly.
The Chicago-based sandwich chain on Monday said that its sales and profit margins are all better than expected so far this year.
Potbelly said same-store sales increased between 22% and 22.3% in the first quarter, according to preliminary results. That was higher than expected. The company said early last month that its same-store sales would rise between 18.5% and 20.5%.
Restaurant-level margins, a key metric of the profitability of individual restaurants, also came in better than expected at 11.5% to 12%, compared with 10% to 11.5%.
Potbelly expects record average-unit volumes in 2023 and said it now expects same-store sales to rise in the high single digits to low double digits for the full year. Average-unit volumes at the 400-unit chain was $1.1 million, according to data from Restaurant Business sister company Technomic.
The numbers were not quite enough to impress investors. The company’s stock was down slightly in after-hours trading on Monday.
Still, Potbelly has enjoyed strong sales of late, driven in part by workers coming back to the urban areas that are its strong point. But the company has also closed some weaker locations. Unit count declined 3% last year, according to Technomic. System sales last year rose nearly 19%.
“The strong momentum with which we exited 2022 extended into the first quarter,” CEO Bob Wright said in a statement on Monday.
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