PBPB - Earnings call transcript Q4 2020

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Operator

Good afternoon everyone. And welcome to the Potbelly Corporation’s Fourth Quarter and Full Year 2020 Earnings Call. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to turn the call over to Ms. Adiya Dixon, Potbelly's Chief Legal Officer. Ms. ahead. go please Dixon,

Adiya Dixon

and earnings our call. everyone, full quarter year XXXX welcome afternoon, fourth to and Good

accompany Senior slides Chief Our note Alan. President remarks, I'll Officer; a our now and provided today we'll that Chief President that presenters are for of our call set Executive we and Bob open the turn prepared Steve have your our the Officer. remarks. Please After Financial Wright, will call our Vice PowerPoint prepared and questions. Cirulis, to over

within these may forward-looking future the comments section statements Private your cautionary XXXX. your You in upon any statements views made of regarding the remarks, the of nor be considered call our the XXXX slides will our certain for events future for not for These company. or access on subsequent we'll on any financial statements this call meaning be they Investor new Slide Any should website. as the questions. call statements prepared to future to Relations I'd X, like After contain outlook performance performance delivering such and our attention periods, that of open management Act guarantees of should our are Litigation date. Reform including the of other future forward-looking statements, relied forward-looking of Securities the note

uncertainties, or a could results and events differ those and significant risks of number to risks and presented from Forward-looking due statements uncertainties. involve materially

turn filings Commission, headings XX-K, be under most Risk information sec.gov. we've our actual Additional and statements and other the to I'll today from business, the available at and which Exchange the call can differ annual forward-looking over now Bob. detailed Securities and factors that information concerning in the results found could recent cause to risks Factors report these our our on with MD&A regarding and are in the given Form subsequent materially

Bob Wright

today. everyone. I your And safe joining since thank have hope remained healthy Good you us and and families for update. Adiya. you, afternoon Thank you last our

X and year. I'll a was Slide in the and months just year. everyone teams on every I last persistence, restaurant the provide of the team the rise great start around overview of dedication, I And have people organization we of truly Together, impacted. great of can that quick I'm this Potbelly that demonstrated for to of face few midst significantly pandemic tested we resiliency, made proud Potbelly accomplished Let's and challenge joined obviously and unique. last ago, what tell member collectively you a adversity. the extremely the world industry and XXXX in that creativity

employees protecting our we crisis. and drive pickup, way cash in for digitally driven well significant on pivot and service our position business options safety throughout This focused our included off-premise like our the It as the customers a through. teamwork reactive prioritizing and in from XXXX, were deliberate but As we begin attributes that being our growth, proactive to our it's help that respond control, being financial to profitable the suffered us thrive. us and prioritize those within will enabling to costs, as both delivery we controlling right-size we Clearly involved our those customers. also exact aggressively and efforts and that our brand things pivot drive to our performance more the protecting as in

As program. like success, with our Perks digital the invest Potbelly our tremendous further offerings progressed, in we improved to year continued

executed included understand growth our the components intent the included efforts as stronger almost those plan, of call. that of our will a management that strategic which Most complete. new, share focused with investments with It of You numerous And This think, plan of team, more profitable initiatives we'll later immediate today. in hear development included the strategic also of rebuilding we critical but it make about a foundation also in exit the we of a pandemic. I number which needs support on build today's to the in investors new were business, to we you XXXX. it's is detail this full

Let's discuss more the takeaways to and few really actions outcomes as of XXXX. stand those reposition a strategic we Slide are four in of X. took business critical where today on the specific from we There actions

from we built a continuation momentum in solid minutes. throughout February, few had a have talk those the barring you recovery hiccup year, through of trends weather First, the we a and in Steve will small seen extreme that

positively. comps shops digital and airport now closed Our continued our expanded trend to suburban of locations have seen positive drive-through nearly We've most our to opened all and and non-CBD channels. hours And we've in shops operations levels. pre-COVID have with our of

lift. recognize fortified was our not we hard the This here, closing to with was and the with through XXX our And who willing that it's partnership by think base us shop permanently Potbelly's XX renegotiating have I pandemic Next, the strengthening clearly the our and foundation future. huge leases. only are we This throughout enhanced that but I year. in work included critical done and a also are work landlords invested shops

team, smaller and to Potbelly As to industry better norms. general, our to building and part at and footprint a also of costs look administrative a took we our fresh other them align stronger a

we quarter a over As savings. in completed corporate annual result, restructuring million and in $X.X G&A moved have expense with our fourth forward the

a of in terms welcomed the completely team we in new Lastly, XXXX. leadership organization, strengthening

We the coming this third our strategic XXXX With plan outlined traffic-driven for as a but began to our growth. of team strategic last executive prepare in and quarter. foundation is of have to success earnest pivot in against fourth leadership this plan. in we the positions and place, exiting quickly We new still fill, to we was profitability new handful you this it quarter, executing team together energized

progress. that's balance importantly, fortified on remarks Our growth it quickly the new subsequently sheet fourth profitable through achieving halves And steps to us as our we very forward capital progress. the it in allow to more front accelerate and opening but to strategic additional year the move we Slide amended to be footed of success I'll plan our up million This credit my critical extremely facility of we expect support path in as $XX two our But conclude need year. the expect a business for was fiscal will month, was year pandemic-related completion organization, frame a different critical. the still and more of private an placement. X, in clearly we how I this recent, last Last throughout it recovery, invest see to strategic will Overall, to our forward XXXX. growth. our extend

wane eliminate become restrictions we'd and together, improves. more The we'll widely year. dining first do states We've the more seen of all least at we the weather half the as and hopefully half expect distributed room this first where virus business one recently do through to vaccines see the most state gradually

occurs, team preservation continue continue the we've and been to our and operating multiple leadership refine the And will to We'll of well. team As test, working our prioritize we'll traffic-focused rebuilding finalize as cash develop this on. efficiencies. initiatives that

some but expenses. have ample be XXXX these expect legacy have level we will the to cash the shop obligations first half at to liquidity manage this breakeven and cash still Steve through outline, As to we fulfill year, of

we you of in into to accelerate the seeing the proceed developing the This of we of second locations. should the herd As like hope even of start our lifting year, and most them restrictions half hopefully immunity. impact dining eliminate

fully the will strategic profitability, team level traffic-driven And up seen it about primarily of will and optimism Moreover, no strengthened right our recoveries life specifically and, turn look platform quarter platform and exactly questions. year. progress initiatives element there's of expects focus people many can begins still help grow that our is expect that importantly, And business more on our initiatives I'd leverage is a functioning over believe catch half. and that other team and the our There we shop initiatives. company-owned To significantly gaps and a organization. that the take Potbelly the balance districts strategy sheet with lagging before is than we during on be was. as to fashion model. in economic Steve, second team, to shop that, the to some in performance platform developed traffic-driven to to close strategic to our our across explore shop-type to a support occurs, the our country, talk But Steve? travel. an right go economics With emerge this our Overall, in as benefit few stronger and Potbelly. we've to see airports scale trends recently here have As the these and one summarize, ever the translating an present company's the locations how where achieved capitalize to to we'd strategic more to and will ready This on work these be we profitability we a before. we have shop with the to to types. strengthened call update we'll your financial be likely result, at our return full central begin We'll we'll the certainly the that's fourth like will a in back will across in have have profitable

Steve Cirulis

of of traffic XXXX. afternoon, clearly which in Please per quarter-over-quarter to turn check to We've improvement sales with sales down was December points. compared by where good since the you And and same-store improvement the same-store the weekly we seven entree fell basis. despite sales year-to-date and average on experienced Breaking May. as steady X everyone. presentation of the by improved through our by particularly X% three sales momentum, declined average in November March, progression And comparable Slide And solid QX, Bob. impacted can holiday XXX-basis XXXX nationwide our of Thanks, company-operated strong traffic. particularly of saw XX.X%. QX, positive percentage the see tenths month a resurgence This beginning points with Starting for results. same-store a was sales, COVID-XX, sales

slight back, business months the demonstration November resiliency and saw of the sequential Excluding the of we our conditions. last which to eight seven over step to of pivot XXXX, market ability a changing is improvement rapidly clear of

we unit, half average second In saw per XXXX, surge in sales a terms QX. weekly and the strong cases in of volumes throughout despite COVID-XX consistency a of

data performance the February from chart, improvement far just January, XXXX, saw tracking in so we in mainly February, can was due The XX.X%, by the you as to severe see X. U.S. weather markets XX.X% our shows is down impacts and in March meaningful and in March for throughout particular. which encouraging through performance so down improvement down Turning from in softer-than-expected the sales followed same-store into far XX%

while half Importantly, volume shop compared trend to XXXX due accelerating. in average to our the weekly now sales second in lower is January seasonality,

point QX and to increased fact, volumes of ahead the throughout high Overall, pandemic of vaccinations to are rate our In the expect strategic only March room as XXXX the on quarter continue recede, to we but not chart. of conditions from traction see this sequential date re-openings also each initiatives. driven trending dining by XXXX, improvement previous by

and provide Turning statement financial last recovery we're income should performance update to this to highlight Slide XXXX. X, we quarter, did Like or for the QX This I'll trajectory. against with going better walk quarter sequential performance QX. on quarter a you our our through you of specific

to closures, due improvement same-store fourth million quarter, temporary revenues sequential shop X% of and reopening During sequentially total the in the $XX.X increased traffic. increased hours to

in to improvement XX.X% $X.X and shop yielding fourth that quarter, the process a as XX.X% an XX.X% Slide the in $XX.X prior ability during and the primarily driven COVID expenses sales XXXX an limiting million XX.X% or shop of loss was the reduction expenses quarter. shop in million. sales, full that XX.X% stability or carry quarter. the negative provide million $X.X and the from forward reflects or some decrease and quarter. or due Clearly, our in COVID-XX $X.X million not increased third million QX closures, efforts, quarter driven compared by million resulted The given quarter, sales operate. as was million third XXXX impact of shop compensation. of cost Occupancy G&A were or That total to expenses Other fully of the in by the expenses. impacted level delivery annual million were discipline, in X, schedules $X.X The approximately quarter. shop compared closures. of in XXXX for was XX.X% third-party COVID-related of the in negative fourth and higher last into as disruptions administrative as sales, higher third of renegotiated $XX.X or of other revenue temporary to of $X.X quarter savings holiday company's by completed COGS sales the PPE million previous improvement the of compared of $XX.X shop result sold higher end to to fourth a increase one-time shop to and to the total shop overview quarter costs, that $XX.X goods expenses Adjusted with year G&A and shop I'll from was Labor the did government-imposed XX.X% expenses attributable to the primarily the cleaning well primarily $XX.X fourth associated $XX.X cost in of primarily focus or sales. or by quarter of approximately of The to increase the $XX.X quarter. costs in were of in in rent EBITDA costs pandemic million or sales fourth quarter of to to in partial $XX.X were quarter, expense of On million the of restructuring was revenue. slight quarter. controls. million and quarter related fourth Cost quarantines XXXX. million is sales expenses $XX.X the decrease were the percent The compared was or fourth the impact Potbelly compared costs the compared of of X.X% business PPO quarter, sales sales the The were was fourth G&A restructuring significantly general compared Our the revenue on XX.X% shop largely This third

decreased walk to such, the I'm EBITDA in $XX Full negative compared was numbers sales high-level not As negative $XXX.X negative from million to the detail, million to the in to will GAAP loss million prior million figures. adjusted of going rather in but was through $XX.X million XXXX. $XX.X XXXX period, all million compared in provide $XX.X $XXX.X net year and XXXX.

position. balance Turning sheet to liquidity our and

costs pandemic. the know, took at action swift cash onset and the we reduce you preserve As of to

QX in from Our million. second half last XXXX that projection settlements the second year the to work to weekly QX and rent back XXXX inclusive rate into timing and rent back cash due burn the $X.XX payments quarter from of This moved that costs million the from QX rate outlined we of improved $X.XX salary improvement associated XXXX. our is is and restructuring primarily XXXX weekly repayments cash The with G&A of burn QX. half of

to of was This ago. Our compares million $XX.X liquidity cash end $XX.X facility. available million $XX.X on of position year our at on XXXX the which of and million, $XX.X million hand credit consisted a

initiatives. we is completed million however, sheet, actions and $XX XX, execute maturity strengthened various strategic private revolving have last secured amended with support These flexibility the that our to our $XX we made ensure when against extending of our to a included significantly to as post-pandemic which capital the necessary importantly, to growth well the Potbelly we credit XXXX. month continue appropriate successfully progress facility senior January million, providing the our recovery have to as placement More balance

Turning X. Slide to

by Here, show we performance shop type.

shops of outperform as first Overall, shop tried XXXX. three XXXX and continue behind Here suburban rates. drive suburban and the normalized types shops levels and throughout some information as types. through surprisingly, levels. transparency other have to the run locations shown location pre-COVID and Urban with we've offer recent remain you well below again, to to periods while university above very airport and close running lag shops, through other continue pre-COVID CBD improving, drive Not our the fiscal to

slide is recently. country point to weather carried on out experienced the clear item momentum of I into December's our positive impact that want other this The extreme the January.

prior larger and as extreme news a our good interrupted The many subsided, winter a we've of continuation seen snapback conditions recovery February's progress over we've positive in of our and is conditions March markets. business month past However, excellent partial trends year. of our an slide. cold winter the have shown of has those the the Slide in is by XX illustration as how this temporarily represented shifted

approximately Potbelly diners As in by you can and the XX%, prior the to were see, of our shops. the revenues, joint majority of offerings our generated onset pandemic,

As restaurant pickup includes quickly which more offerings, shifted towards and restrictions our place, put business delivery digital were options. in we

throughs. XX the shops drive leveraged also approximately have that We

blending a digital we of as channels. digital driven. to term, a two to is up of these This pandemic. nearly assets, see of XX% will only aided experience channels. business the by that of rooms multiple that As not digitally to service over supports successful that shop and customer result includes us quick longer but excitement return believe modes the investments, by lines production flexible now We consumer shop digital pivot design pivot, was all and our design our dining our exit in-shop the expand sales sets Potbelly's we

Moving XX. to Slide

observations our far outlook XXXX We X.X the so will and first months. during discuss our for

we a well be by driven story or as halves, actions. XXXX mentioned to as anticipate of two business external Bob our As environment earlier, Potbelly-specific factors

framework we combined economic we for want believe expectations through While we same-store to cadence performance XXXX. top sequential quarterly Overall, anticipated the providing and our sales the that line support with of our the strategic not of guidance, initiatives, improvement in communicate are will quantitative a recovery. financial recovery,

starting the hand-in-hand mobility recovery second improvement goes expectation our as trajectory This in slightly Broadly the We vaccinations we half XXXX XXXX, half track above also expect improving cases and expect cash to the COVID-XX first to flow accelerate second of with and positive of return speaking, demand should profitability and half performance midyear. increase. trends and the enterprise that XXXX. to with consumer decrease

rent half As put to expenses, these entered we which Summing year, measures a in the of with million of profitability result earnings the which first in the half company's of all be the we million of shop-level adjusted of will the XXXX, enterprise-level parts, towards delivered anticipated that deferred in Again, midyear, during of to and cash approximately of projecting of as will $XX second first positive pass as the pandemic, operating will the Bob. majority and cash XXXX. recovery throughout momentum things weighted the second preservation need we starting expect the related profitability we up are the of the XXXX. with XXXX to moving EBITDA and be quarter. I'll shop-level With place during both half cash that, to the most flow bulk back paid over well $XX in are be deferred

Bob Wright

Thanks, again. to this. a of Slide with that I our you Steve. into great understand see position has I think and what work last Please where turn important it's this deal brand gone XX, shared quarter, you'll you

is our dive. move we have me, must positioning, in position, the We're of it many on in resonate position often to words, every and conversations loyal as a with you that I said our a best prospective found our by Potbelly an how story list is of great, craveable, enjoy the food place forward. of served had fortunate to my and the ways you many in "Potbelly time as It's brand first-class stops excited of Chicago." area you of visit to. our aren't shop to brand high-quality One Those customers going good you our sentiment investors. summarize with recounting live that in an I've we other the really you, vibes to will enough of with embodied with brand investment, In is location believe too. this And both about a numerous

focus, review position. which our Slide has foundation its Next, in on brand profitability traffic-driven I'll strategic XX, our

that of quarter profitability. has simply the objective a quite with as best to attributes brand pillars you strategy acceleration Potbelly as this executing of pillar. the the the for the traffic-driven of We Our implementation pillars core our the more are the our over share today most to five to with slide. like can shared strategy, course by life on well you of of we're life each is to five are with to already I'd But what unifying very detailed are represented coming initiatives and last you some bring see begun under year. how There with initiatives

to turn please So Slide XX.

details, plan there with into ideas with get our we I a note these year. initiatives, associated of impact lower-cost while the like built focus and many on that are to Before investments I'd higher-profit this

go expect we various the reasons, nearly into these locations to but competitive of in on detail half of the leverage able the won't the timing to second For a initiatives be lot XXXX. and/or all of we of testing,

quality first Our at great a cravable pillar is food value.

but be highly food, feedback and in will this We successful have innovation remain and great to competitive trends consumer in, to adaptability we're critical. environment

work, improved One our achieve Through salads smaller throughput will we sandwiches promotion. our enhance to outside perception, brand customer product of to of we're menu all This enhancements this offering other of like continuing boards and Your continue price wider the fixing Pair an experience, ladder. value make menu. with and for should here and half also the better first lead easier things It retention. which consolidating will to is doing include include will a simplify Pick traffic

larger-sized as options cheese toppings testing We’re well. with more meat, and

half the ideas, success, of and are making customer fewer in the market new expect experiences. with more there already and also we year. be faster testing of continued phase, are we a a a efficient While number live plan ideas in the for have to system SKUs, beta second These

people good vibes. to pillar, second our Moving creating

we last and manage love our in must and who to at good planning hire that people our experience expect also bring But our incentivize phase, heart align our and labor attitude more first the people team and continue We with mantra shops end by optimally of unique improve at embrace Potbelly. management. and personal said customers need shifting vibes fully to I to are great model the real-time business food. through to This this the for quarter, is offer live for with As train create our and deployment the success monitoring be to of to To labor all do expect so, we'll platform for the modern and be to performance management skills we quarter. people own. it already testing a of across hours-based

this Our goal is better while to experiences deliver effort customer and optimization employee in labor also reducing costs.

time, traffic, win with leaders On with ideas, the We're creating a can careers that of growth bonus incentive transformation have the top a We've the line component profitability driving incentivize incentives share while, of win. tying win organization, organization. a our enhance their around both successes these bonus when and field teams its Both across motivate and We of and drive and we front, at the scorecard we the the including and level we field number the share to aligns to center same ensure develop and growth, traffic of new our programs ideas plan. believe new our employees' program our shop-level ways and to goals. shop our including organization support also identify associates the significantly balanced and the top the talent better instant profitable the at wealth and recognition that to implemented performance. to motivate

drive and the also we the that while improving our Noyes, experiences new COO, growth. margins. shop customer experience customer With are pillar, effort, building third our stronger traffic Adam to unit-level leading economics Moving

identify the objective created effect teams we've pipeline points to margins without any a First, of employee cross-functional negative customer with on savings by improve the an ideas to XX or shop-level experience. basis

mentioned I at repeat customer customer the pillar, across service us drivers This engagement traffic. the and with brings channel, scorecard is digitally a focused satisfaction our metrics Importantly, employee traffic. directly on balanced driving third which along on focus and to to is and fourth awareness, each shop, driven connection connected operations standards measures every

more customers execution as they choose currently to or how flexible they the in app where Potbelly and we huge their order, and to our the might XXXX, our Potbelly This and the operations remains for supports frictionless of activity. Therefore, and shops Perks traffic opportunity step fulfill our this success targeted a redeveloping This and for we of ultimately increase order only new meal. our reordering our tie is is drive customer's easier huge our in is easier regardless there are program enjoy to allow new their and better the significant customers, for experience, and a web fully the second experience leverage forward Our rewards Perks interface create simplified understand look to through and beginning promotional of loyalty offerings journey We loyal of awareness as customer program. data better relaunched improve to we half system and the was leverage more across technology base. drive customers app traffic, to our in customer QX. grow efficiencies, our enhance and to unveiling web but better

for are a franchise-focused platforms. of tremendous XX% quarter, business said around and most is turning company the the to pillar across But journey, I you're leverage can strong as States positioning United that profitable such and it significantly Lastly, and advantage underpenetrated owned today, development. our growth. and shops growth the works across of high-quality on of when are franchise a both generate despite is we focused last next brand. recognized fifth having our what that's and We leg Potbelly by our

as few planned. to developing slate recent the committed remain of and years next active over Our originally franchisees

to competitive expect from against annual create welcome to We'll economic shops continues XXXX pandemic a beyond. model expect advantage the in wane, the come growth in we five significant through and that of shop-level we the as other number three to and and next to leveraging growth work wave As to new see franchising franchise options. marketing XXXX Potbelly's operations,

pillars I that, and can with proven all see, capabilities five momentum our future support the of performance can We're now build With we traffic-driven strategies. that will as that profitability your our our so share show leverage Operator? to focusing a our XXXX. the thoughtful call will address plan So on back you you initiatives excited by strategic core and to over questions. our see journey turn the operator throughout enhance

Operator

Instructions] Our question is from today from coming first Long [Operator Joshua you. Thank Sandler. Piper

Your line is live.

Joshua Long

from that half at as Great. trying I of those Exciting profitability year and questions. might back couple to you But shop pivot level. through in that been that from down that the XXXX. of shop we've where start some the sales when a something momentum do in part today. some was I you've in update under you level? seen of kind of a modeling sales the within maybe into also, with and – the to the that perspective, want you mid-teens a talked on I What terms level curious of taking look then, XQ I does first start what the you've the if see first XX% against that basis. as in to down points half just just you be know improvement for see XXXX the to of are same-store upside to now seen to pair able the percent Thank getting to the Particularly, about for had of questions management second here of cost half. there and able kind just like improve. to calibrate that at up steady the

Steve Cirulis

the way the kinds very the is here as what that to our the improves second The for of the that occupancy we're we're the Thanks step shop-level the in obviously I some of exciting. is period of leverage drive of here we in moving business on line did from do seeing back will of sure. seeing We period, XXXX. some And relates great advantage of is all top And us. for is despite work as some Josh. the third still profitability, to taking slight work COGS. things that mean, there end Yes, momentum in it question, have

working think to look. I everywhere Adam hard efficiencies on Bob is we mentioned continuing that find

some to those And things so things built. place, those in are some are of be of still

that efficiencies that look we we're building shop to. We we've at labor also, the however, as got understand

a we seeing already model have that. some benefit We in seeing labor – are that's and new from place, we're

that because of that one we example, the being in amount using now result basically significantly volume, a weeks deployed period. deployed it labor as lower in we first but wasn't had an the using saw As in period some of model PX same where we're we're

from we're some should some see So benefit seeing that, from that. or we benefit

additional On to I have move, to are the we a and year a delivery like think, us. there. things there that right? on third-party half it, in got is that COVID part of of fees hits that forth that it of one of So one so lot relates still COVID really the the towards going back area, expense as other operating is of We things had for expensive costs that also XXXX. as line PPE costs obviously, gloves the And

we to So of expect some – things, work through still do. some are those some we and sales we to get have additional from leverage

Bob Wright

that. to Josh, I'll Yes. add

about that comment your continues the excite first sales the to us. part of trajectory one is that the think I

And we so do story see the really during as two of we halves. mentioned a kind call, this of

obviously, But obviously the the share end closed. those. that is we we're with underlying some shops initiatives, half. last whole. of the There see the line-driving success come then those top activity, the second initiatives, are that business operational in of strategy, the to life recovery included Those the our got some of as we've lion's against some think to of especially is as really drive drivers of reopening and in temporarily have the some marketing a the well the seeing and been on towards working going the balance And as we a of we for of started So year. industry

of at sharing direction And some year of this excited we can and so and of the coming it about definitely winter you head we've start things out kind think like when shapes look very right the been are we be headed the with up. in March, numbers for feels into something how

Joshua Long

really get new such at the when we dollar the out base of out new reinvesting those costs as going thinking and of a think created cost then we pulling a management to with you be to we particularly line year? called something rate that dollar some then a so think about of Are basis. And Thank basis do in XXXX a into out, should run we about you side, can on those? you I the slightly to $X.X that thinking that. that against higher business you called end against reinvest that XXXX? savings lower of end the look the we've Or base, from for up which modeling you on about some G&A we XXXX

Bob Wright

to had the that burden we a traditionally No. – lower restructure And Yes, it Thanks chance than to for on was intended clarify. was the that's that G&A a savings. to net business create been. is

our about excited we programs things achieving the are have the heard the at some we taking go care center at Fully the of reloaded those that of in team things funded and put shop into of that us that incentives still One discuss exciting as have. of the savings. plan, bonus support that you the things place, into level, is, some level, we're been annual that

space So question your quartile looking down We performers no, the reset. answer the the in more as were in second or to late quartile this for where back business to the maybe first XXXX. wanted best with of G&A the end at versus line we get is, our a bottom fourth were we as third on in or short even

Joshua Long

the queue. pass along in back Great, hop then thank I’ll and you.

Bob Wright

thanks. Great

Operator

coming next William Matt Our from [Operator is Instructions] question Curtis today from Blair.

live. now is line Your

Matt Curtis

good Hi, afternoon.

Bob Wright

Matt. Hi,

Matt Curtis

Hi.

Just getting to Joshua's back first question.

need inflection maybe average you what the comps profitability in talk can you'll weekly or sales get you have mostly back that of second Given level half about the into to into profitability? that the of actually year,

Bob Wright

mid-double-digit of into think profitability company us shop the XX%, our at where but Yes. XXXX, then, breakeven point what over inflection it, numbers seen volume get any target the I'll I'll at let that around, sales And company range a for takes more to it breakeven look that of to ever. yes, adjusted whole. call some of build gets into XX% to and industry looking level. to the detailed be XX% we're the as to gets or range average numbers, earnings on not numbers down we course, then level up that for dig that Steve XX%, sorry, range, I these think us the are we've But that that some up if EBITDA you

Steve Cirulis

Yes.

Matt Curtis

Okay.

up comps. So just XX% year-over-year the on that's weekly average range, and be double-digit clear, sales to you positive XX% so or then to in said

Steve Cirulis

to be see of kind the level, Yes, would in to would shop we that comps low-double-digits in the zone. so at XXs need

Matt Curtis

Okay.

Steve Cirulis

we're the in, That range and between, to puts to are really as us start pandemic back have the described, and initiatives first way, the strategic that revenue. And still as We million the run year $XXX half by revenue well. on the some let's because right. million Bob say in looking at numbers, half $XXX these lay of way, out her

we So tend that's of kinds how view these things. to

Matt Curtis

up was XXX And leases time Okay. just heard made it lease to renegotiated you've like something from, think, the mean, now. in you. have more you. seems the That’s Got about XXX from renegotiations, then progress last release, says front. that we total turning it I some on you like it I

savings update of going an give the going get this? forward amount you on us total annual from to you're could maybe So,

Steve Cirulis

sure. Yes,

all that think few I work. of There's with done are handful. we almost still a

about or some there's that seven that touched on here. leases the so of XXX, think odd we I

save $XX basis the extended $X from XX in of we of shops. term. right, in as losses we in that closing a And shop closures, So, also in for us terms million going because it some avoid was excited we lease results. On through loss result abating it we actions. the related right, savings should there. are of all of in a some occupancy our But shop lease The some things kind those I a those avoiding say, about those big did million negotiations, effort. other helps annual will varies – to about of we losses. And costs will It's

Matt Curtis

your Thanks Got much Okay. it. time. for very

Adiya Dixon

our Thank any the like Bob to back I'd for or you. over reached to of end further We question-and-answer closing turn the comments floor session.

Bob Wright

can time really We're you potential. We call. And we company Potbelly. the what believe your excited hear do the joining full its reach to hopefully appreciate about Well, you thanks that everyone at can for today. of we're future here beginning the just at the

the team motivated, team confident we achieve a got we're And strategy reality. to will and Our committed right and we're success. the we've right that that is make

And as brand. Have for the most with you regular your great those providing to various forward of we more especially all, updates, your support Looking everyone. on interest initiatives day move appreciate forward. we a and

Operator

Thank today's you. That does teleconference. conclude

at you lines You for this We your wonderful and thank today. a participation may have time your day. disconnect

Potbelly (PBPB) 12 Mar 212020 Q4 Earnings call transcript