PBPB - Earnings call 3 2023 | Potbelly Corporation

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Operator

Good afternoon, everyone, and welcome to Potbelly Corporation's Third Quarter 2023 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] On today's call, we have Bob Wright, President and Chief Executive Officer; Steve Cirulis, Senior Vice President and Chief Financial Officer; and Adiya Dixon, Chief Legal Officer and Secretary of Potbelly Corporation. At this time, I'll turn the call over to Adiya Dixon. Please go ahead.

Adiya Dixon

everyone. afternoon, Good our to XXXX Call. Earnings And Third welcome Quarter access earnings release By now, accompanying our have should everyone and to investor presentation. can website. If section they be the on not, Investor of our found Relations

need XXXX Before meaning our including Any of of made this financial events will we call such considered performance Act or our be be periods, nor management's the of future subsequent representing everyone forward-looking Litigation forward-looking statements regarding the future formal views should as I statements, Private forward-looking on Reform any the statements begin within date. of contain any statements or certain should Securities are future other they to These remarks, XXXX. of upon as comments for remind not outlook future company. relied guarantees performance, the

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

that and the and concerning information and statements these detailed in factors Factors Exchange be the information from at differ and in under Additional actual given are subsequent our other forward-looking our be XX-K which heading that the risks business, results our can and with found materially available will Risk to the could MD&A today, filings regarding Form Commission, cause Securities sec.gov.

non-GAAP not these are the President that Bob During Investors of in call to generally the of principles, I call, available GAAP presentation over there of would the investor issued like the to some Wright. GAAP. our and to measures a the afternoon, conform tab directly out to comparable this appendix of release Reconciliations do Potbelly's CEO, U.S. included press discussion which will way, both items also be and the website. With their accounting turn are that in or of to most accepted measures

Robert Wright

top line we contributor, afternoon, Notably, from growth today. third sales same-store results improvement call take solid growth. and We a category to and traffic for and you our casual Adiya, as the week quarter. quarter strong you, demonstrated continued delivered strong each share good X% through by Thank fast thank traffic joining our the remained

labor also continued a of proud We driven these effect point results in food basis disciplined XXX our to and confidence through the brand. sustainability strategy potential many margins by amazing achieved driving year-over-year. I'm resulting the achieving the improvement far. say growth leverage this long-term and of on costs, results across execution the our grew over that remain shop-level were We of quarters, past thus focused we've the in cumulative

forward to digitally the the to Loyalty of XXXX, of look Program. approximately on the quarter, represented our initiatives our traffic-driven support relative XX% creating driven let we vibes, the our year. starting to food of at X-pillar the As an by Perks all, points in business progress digital ongoing digital same to shop these with meaningful Potbelly business, performance sales during approximately All pleased experience. We're that in quarter with increase another XXX digital our total outstanding period in our last that, basis end year pillars, me of achieve and strategic our growth, drive that driven experiences customer continue against traffic value, growth. This you unit and plan awareness includes good craveable-quality and into With we a connection, great profitability development. and update people execute will franchise-focused

from shift towards business orders. in Perks-originated our channels to Importantly, and away app, third-party Potbelly-owned digital we see also a continue and web

the the best needs delivered that We with occasions customers the variety experience to their experience. time by are in-shop unique visit order casual meet Potbelly, each they dining our our digital through committed including occasions fast serving Potbelly of and

see quarter, to verticals. both in thrilled the growth During we were

and we the location. our to Turning our franchise standard rollout as deployment planned, new PDK the system every of Kitchen, of existing shops a is Digital will in existing to PDK as continue of Potbelly progressing our across shops

of PDK the peak digital throughput, which scores. demonstrated experience, the operating time ability the operations, from and by periods, accuracy is quality to importantly to are and in business More during our incremental food the benefit our but particularly orders customer ready growth ongoing handle clearly improvements not to also efficiency of and our only on of

to our shops in from rolled ongoing leverage in Importantly, effort PDK we continue to out, traffic. to the be learnings yet drive throughput

our continues initiatives, to customers. growth designed LTOs by including traffic-driven digital-only traffic, for to be Our drive value foundation promotions our and marketing sales excitement to supported and

app, be digital with most in Menu channels. introductions, among searched to popular our Overall, Menu to and digital all and as available loyalty Sandwich, drive will we we the X Potbelly the channels. And introduced marketing ahead, continue the sandwiches, to meats items look menu food item on innovation the Perks growth X Lucky our uniting Italian of from quarter, our Underground focus X only latest most our program the and Wreck. continue During on our Underground we of A further

let Lastly, FGA. to Franchise me Initiative, Growth or Acceleration updates some share our exciting

call, As in partnership company founder, our a signed the we with Kyle. Bryant last we through our during quarter Maryland mentioned on deal a XX-unit

a both to During and comprised in of and new to shops Florida. develop agreements, and refranchise end we Ohio commitment the XX XX-unit a shops quarter, multiple deal signed that additional the new X subsequent of including development is

a total franchising XXX development of time. focused our shop remain has XXXX. achieving shops growth on XX% such our in now We team to commitments in date. I'm proud short what period unit accomplished Our of

with we the to and brand And drive growth. long-term We continue highly fluid we combined foundation believe team right business Potbelly and have pipeline candidates. fundamentals, to have a unique active proven and the of qualified in place our franchise when

development to shop area forward or emphasize franchise to additional the growth, our U.S. X,XXX next capability We towards Looking units finalized. build are and on our will agreements, our sharing head more look we continue organization's we as forward, the focus as to franchise updates support calls SDAAs, in

our creating Their how our to carrying and commitment with Potbelly have mission Finally, do unique delight of customers out food proud work resulted they hard me quarter to performance. brand third a reiterate strong let so and distinct casual I in team. our to am the great call will by moment And differentiated and last the to quarter. first for to customers, detail third that, our now good their their turn Steve from fast financial for over I of a bite. With experience each performance our vibes,

Steven Cirulis

through X% Thank impact short-term of sales weekly you, $XX,XXX, everyone. approximately of same-store sales Bob. approximately Revenues our third increased be by average we to Good approximately recent they refranchising same-store providing to $XXX.X transaction. sales driven strong value digital a showcasing System-wide the what compelling continues for sales million, as X%. of in growth, $XXX.X million resulting contributor revenue and demand by channel. by afternoon, X%, through in growth drive Traffic customers the of our marketing quarter pay offset partially grew to our

implemented and mitigate input as costs, in to QX inflation continue although deceleration. necessary, we price increases do increases to Additionally, will so modest saw appreciable

through continues member the to grow promotions XX% in to increase last Our digital an our points represents loyalty increase and digital currently program revenue, acquisition of this versus We our advertisements. efforts basis digital enhancing to of progress approximately engagement experience, overall targeted dedicated year, attribute Potbelly growth XXX and activation, owned through and business and Perks channel. predominantly

a improved, Turning Overall, period. the year. packaging greatly prior point X.X% to and sales, QX beverage minus expenses. year inflation XXX versus of basis versus costs was at improvement Food, commodity were XX.X% last shop

is XXX largest a Our [ year-over-year. leverage, chips, basis condiments ], the sales, increases, XX.X% year Labor attributed primarily point includes and expenses which grocery meat, continued category, versus sales of labor were guide. produce, prior of along with with our optimization to hours-based soup cost improvement the improvement are This input retreating period. chicken,

was and control year. administrative margin loyalty the points to line of to on totaling restaurant These results of not to XX.X% we experience to XXX the basis basis model, as we program, by and inflationary cover Potbelly of increasing prudent our of throughput, year sustainable year. our But shop customer brand top quarter, We marketing received focus Xth was were operating point versus forward-looking City points ago this the economic on Occupancy efforts, pressures. That increased efforts. repeat said, level average to we the cost. demonstrated we revenue. a prior have were expenses a expect I'll market, point the through do of and truly moment. refranchising year guidance our effectiveness XX% including the growth our count primarily power to leverage improvement prior XX.X%, The continue do and quarter rates our to end carried fueled cost were margin with expect period. of normalize head by of and New basis Perks which spend. Overall, achieving fuel higher occupancy operations driven that in quarter onetime wage XX fund development our normalization XXXX look a General margins see last in accruals line focused sales, of still shop-level work targets the Other moderate top and York versus increase than increased to as bonus X.X% sales, XX target this by basis The continue improvement of we increase the our This expenses predominantly driven year-over-year XXX G&A was year third more our outperformed higher in period. of a the due are and XX%. our year-over-year. from benefits year an increase in was to

our franchise-based a continue more to we administrative view time. general more and to as is over business, As system-wide percentage quarter, last expenses discussed we as come applicable believe a way sales we of

third were expenses For general the X.X% quarter, system-wide of and administrative sales. approximately

to $XXX,XXX unit by reported costs, versus we the period. million We of continue net of development increasing control build encouraged an improvement our the results $X.X pace prior income ahead for these the infrastructure are Adjusted quarter. year of income sales, $X.X as million, We was net and growth. leverage

EBITDA total was X% and year-over-year improvement adjusted quarter on This revenue. XXX was increase a point margin. or million a basis $X.X of the $X.X million Third

outlook. our to Turning

outlook margins full and EBITDA $XX.X million same-store of growth $XX.X between the adjusted XXXX, sales between between and shop-level XX.X% million. XX.X% our of includes and AUV XX.X%, $X.XX million; For year XX%,

the $X that, $X the between and X% of fourth back growth XX.X% average weekly and margin between I'll following: and For XX.X%, shop-level With forecasting same-store $XX,XXX call the are sales million. quarter X%, Bob. over between to EBITDA currently we between and million turn adjusted XXXX, and $XX,XXX, sales

Robert Wright

Steve. Thanks,

quarter demonstrated our third And we sight quarter, to model the business year capable growth Potbelly have XXXX of line into we momentum targets. Xth believe full what continuing results is of. with the Our the achieving

development forward shop to area additional sharing agreements and quarters. remains updates coming additional in of strong, pipeline the we Our look

the in started. to line for are only we're we great that assure While deal getting answer recent we've open achieved happy Operator, the any just questions. you that, I can questions. a please quarters, With

Operator

question [Operator first Instructions] the Today's Todd Benchmark comes Company. with Brooks from

Todd Brooks

the Congratulations results. Good progress. on

Steven Cirulis

Thanks, Todd. Good afternoon.

Todd Brooks

traffic of And X% couple A disaggregate X% you to questions. the forward easier in mix talk about same-store pricing, to assumptions is quarter. X% well. Xth guidance quick quarters, easiest that the way sales way it to we to Can and Or maybe within a that us to for as talk if waterfall attack of kind it's for pricing X%? the it the can

Steven Cirulis

itself, start then pricing into can kind of components. Sure, with Todd. Why some don't get of the I other we and

had the which some the action quarter, year. PXX X.X% overall X% and in in quarter, early carryforward We at prior increase. pricing we're from was price a the that the a for of price So looking here increase, includes a

and X% think X% X%, of same-store at got our can a roughly negative right then to strength. We rate shift. about traffic we guide same-store at at you got we've category -- our to sorry, our on you in pricing is up and -- X% the being look direction like of take here it's mix a sales know rest continuing look our that the traffic. feel the a So a and And at moving sales you business guide blend if is ends its you've flat

I think we like that. of are north where we

our, down get where But sorry, on our you you to take don't if to increase, X% all go. X% beyond range we price sales to components should help there. X% and that you need same-store we your So break the don't,

Todd Brooks

That's perfect, consumer. Steve. your And then

What are similar how I a quarter, management about don't think check? -- might were the as an if they of option. have on fashion know talked check I at the last about into it they're of seeing what was many you a you just people even consumer? they opting maybe versus are little outset Or with as building the behaving watching Are year? you Potbelly bit

Robert Wright

But build a as change our channels, shift that's another on that on in to Yes, Originals business actually for driving Yes, us. little we some move in from of other look business is that now it's bit Perks seems of with if and you to at that of talking driving, thing that's set. But there's the is newer means happening, Todd. that that. first in to margin a continue the the our not we majority a not own check. I things and a Steve it's heard coming when of say slightly and And the that it app in going a better consumer about. away heard or unhealthy that, channels. growth from question, channel But you was relates Bigs And have actually great behavior that. That not the web see my size we're us that it's especially our we're a think shift the profile total our the prepared Perks on There's of change a time DSP. our is of a our there there. consumers, shift at through Skinnies. And traffic actually consumers, what it by the is XXX% existing amount remarks digital It's of significant change through in sure you all couple how is you've

So there's it of to Those going a third-party to how we delivery the are DSPs. that offset commission pay always higher the carry because we check orders. price

engineered deflationary a that profit, be some again, even from So penny have on about just we've it us. check to for the can impact

no there's profitability concern. So

be In from that channel can slight again, a too. perspective of see fact, that can you of margin some adjustment benefit. But somewhat a that because shift, in check

hanging broader and the that our got, the They've that offset are patterns. going not for this seems in compared to is traffic think in the to been by we've what's in and casual consumer there it. over to really well. Look, spending $XX patterns suggest impacted traffic range seeing - their strong. fast behavior, really traffic got support the numbers XXX,XXX-plus be in significant answer general question XX to market is, taken consumer The inflation with is I the they've months. revised And -- what consumer the on pricing, most is income jobs So the the in last the our patterns shifts we're and has savings anyway, consumer

Todd Brooks

final one, jump That's back in great. then And one I'll queue. and

we on Perks on You as Are membership some just to I've engine. in about commentary -- Perks Potbelly? maybe the I quantification size know membership growth we continued this an touched means asked past closer what or Either to -- getting rates. are of

a of we engine if important understanding wondering how can an of Just get it is? better

Robert Wright

there. Perks our we're continues again, when to DSPs, And Yes, us. see in very the with the we is that's, at how pleased growth for especially that. when be shift just powerful Perks to you And that seeing of channels are heart over own

that in growth of Perks the growth the very rate thing excited other in Perks in and fact, acquisition we're acquisition. the The is about

a for year-over-year coming those Perks XX% in the percent promotional through members rate seeing increase, are increase We activities. XX-plus acquisition

convert last -- job us, of more our still quarter, more the lot months, users. relationship. flows step the But well, the and X in in past. it's that momentum here for in nurture to frequent but last we've is funnel, got to We biggest which has talked last filling the still the that shown a the about first Now too. nurturing in We've the those

rate. acquisition So with that we're really pleased

Operator

Hamblin Jeremy The Group. next question from Craig-Hallum with Capital comes

Jeremy Hamblin

add terrific costs. to my labor with on congratulations wanted I start I'll And results. your

that Digital Kitchen QX, appreciated. that the what Is lower kind business? year-over-year I standpoint, changes sequential you even be the the XXX add impressive understand just the You that a see But and points improvement? from transform in we're color in would wanted to of than line, any improvement. involved kind basis seeing make you're of that there of starting factors type think had seeing I pretty But to could to that

Steven Cirulis

question. Thanks Jeremy. the Yes, I'll Welcome, for start.

give just terms in we've you seen. the of think the shift I to headlines

obviously, we sales rates think visibility lot industry. casual that than labor hours-based a see inflation from are benefit the optimization the level, for shop consistent, the is turnover seen, data think of management continued us. is comes we also we've of been the element experienced guide. Also, the I lower labor, fairly certainly to XX peak some labor having Some And of lower also, hours us the of the a We've off But of of in that -- than fixed the that's its leverage has it I benefit of and where get, about fast ago. certainly on months at which from primarily helpful. from our

elements, that line the labor of would And so improvement factors to contributing all I we're those seeing. that on think, be

Robert Wright

Jeremy, on management really like and with turnover line, momentum and getting that. retention, the stable continued nothing goes we're Yes, that the efficiency the top associate and

And You isn't PDK, of continued the backline are as those is, The the we Those most quarters, portfolio that do that channels. PDK with continue PDK those lunch seeing expand a what helping very ones to be see that we dinner rapid where our with is savings front peaky of But implementation entire really, just about are to enough goes business the us by we quickly. in we that's shops. at rate peaky labor digital out the becomes capacity-constrained back of most that with seek then asked capture move the specifically PDK. going influence getting or we've we are that to the PDK includes We at have efficiency of we all prioritizing and in talk that previous that and that to line. that, first tablet we order continuing X after X those rollout changed. And of behaviors also the of weeks that digital said helps the implementing it the that longest often through -- better handheld the components on line. new or part normal. line us PDK coming about and are the because

that's lot a why to with get I'd director help we frontline gelling to the more of So goes that have we been more And level course, able well. position and those our as move And us are even there's their to of time. throughput. the multiunit that operations the prioritized we we've management that benefit seasoned, extract team. in it manager being They thing They're here. when last a put benefit have really of The shops. of in give and of credit the a that. And at say, district operators becoming there, for as long management continues labor the and stability team a

Jeremy Hamblin

color. Helpful Great.

I So, terms wanted as question, getting FY for parts margin a just as the XX% we your guidance here, is understand to follow-up shop-level that XX.X% margin. component shop-level 'XX. XX.X% towards FY for to look to target in of 'XX

terms Or expect XXX of over bit expect line contributing where come you of of leverage? kind basis to XXX that margins you those labor drive generate a to the the improvement to what kind expect items are gains? and Is little occupancy factors in you do which primary points to most from? that of In factors still of the next year,

Steven Cirulis

sure. Yes,

I give it's, can hit them. on of color. you more two some think I

to through continued expect us of a that you occupancy. to get some we will all that's way. say, few see will will well. the terms as the a to a through when benefit a be the well, food side, input another sales efforts it. We, silver be to labor as to for that margin be other from to okay, It's to certainly, at Bob there's kind major costs, us. frankly, push the and leverage, contribution not of optimize business in also, on bullet us going additional and contributor the that expect well to continue look And efficient on the to That's then to flow as But benefit a described, labor PDK, too. things, going to think in contributor one as be we you more going shops, I effective

return in we be for example, for to to well. And So continue tends that expect to to price means while below our us. runway of healthy component to will grow. business because a for catering on That or our go continue yet we've seen have We still CBD being that us outrun strategically margin a margin portfolio. to like And that us business for a be to to for tailwind And we that, inflation. then be work competitors of the us in our and there And as work, build. competitive. we momentum return to That's still continues to -- to continues kind as going being benefit where we won't will some being continue remain to expand feel fast we competitive from traffic casual at are are, position. also

additional in sit. traffic half where creates of and through so our the brand Where About forth delivery half the fund third-party added business. OpEx where to our leverage so sits. don't of That's a fees rest and fixed line. floats like for is pandemic, our That's it other that leverage of to the And then used ton is typically before with other the flow obviously the we we starts get the P&L.

to we that of So that from of shift got way, it's bit we little by get year. the amalgamation DSP our feel things. And our that we might continued really our XX%. that in I there trends, that XX% benefit us see clearly for will away momentum on next described, help a based we've component of those But get and sights if components the all like

Jeremy Hamblin

Great.

higher. the provided million, $X.X here Ohio of substantially sale the of the -- sale Q the terms the here, color on of in you that question Another just in locations,

to valued should refranchise what, and deals, the locations we expecting much on not then you specific And year. were first over think realized that next this Ohio just what so these other there. a the than more was the why highly substantially to York but the few part locations X first, locations what what a years? -- New than probably of $XXX,XXX deals little look higher more you wanted locations? approximately that's be I that's I unit I answer, as wanted XXX were your understand, know City color to driving super profitable,

Robert Wright

primary Yes. I into goes thing the restaurant a the is that timing. trading. other that Look, and valuation of element that's its franchised think affects that concept the And

you If this to get business stronger -- look stronger. at and continues

willingness And driven company sell to into our and so -- by develop units development. franchise or to spur our the desire that franchise really system is to continue to

difference, In is that to of the has the terms that of portfolio value the in to different. be be of deal each history particular and particular going Each deal portfolio. economics rooted

there. to then, and the the XX course, the of in largest units all CEO, a in remainder Ohio be XX the Royal So were is comes we're in developed of group one. the to COO to just difference it that environment, the Central I groups with down accretive one We And about Florida to especially do with. those. But between in Restaurant each only pleased before. brand. most that the units, one the CFO the very other business tell Group, the And would additional you recent together can that done quality we're excited overall, you it a coming excited Q, of if that incredibly them. work franchisees in really of To deal growth this that sell franchise in get we're QSR's with spotted But development yes, see X multistate with

Jeremy Hamblin

months Yes. anticipating or pipeline, to you you the It like are And add mid-scale color franchisee partners franchisees? are a that's fill you interested to the just X of there as sounds more in if RRG? X business mid-tier, -- can different kind for looking you looking larger now, tremendous. franchisee Are on opposed type seeing still or slightly ago? of Or

Robert Wright

Yes.

your I to think of two answer there's kind question. parts to the

is in just of candidate seeing. one franchise we're the that First quality

that I same to stated the We continue improve. the quality our stronger. brand system. we've mean see are just very have franchise to And ones the the with is previous candidates all of about excited that excitement, getting The all joined

the and Our respect. franchisees that performance lead franchisees follow is stronger, other they candidly, getting of

system, best. as to and enjoying you of I'm we're the strengthen And heavily invested the trend, we're be our But development natural taking so the advantage candidate in able that strengthen glad to tend team it. we've you also pool. And recruit to

very exciting big us. for units deal. that's XX a is So

fact, you find do saying we many wouldn't that that can aren't development the that me in that fulfill could that many of probably there those, a very time. past groups in of In period short because much

We believe many reminder, XXX% like true we'd about to really that unit quickly. group out. And units many This an always that by year development deals, stayed we've X developing them that develop said be our pace. a As large, and today. so pipeline X that then can. that we've you limit and development to units, to it's and a than Well, aren't there can more finish that groups unless that have X-year

deals, to in see X comes some about of We'll this And there high all to candidate We'll over doing. building on may their a compounded units see of of X that the comes see that scale we're with more so still or think capabilities. time, depending and double-digit deals able in to that be deals. the in blend. mid- keep It's the I growth going you're and some that single-digit the number number

and work qualitatively, they've really done kind the we team pipeline from the and forward, in So so the point very pleased see with of generally with pleased this can speaking, far. what I'm

Operator

The from Street next Lake Mark is with Capital. question Smith

Mark Smith

we been in volume Kind maybe these the selling instance, For restaurants Anything looking you of a that more do follow-up call can selling that or to profitability franchisees ones? that franchisees are lower of kind there? that like last are question. or restaurants Are of there cleaner or any the interested in? out at you've lower you're characteristics

Robert Wright

or they some and other mostly amount go for a because in not train as contact direct they a that Ohio. do they their where in start have them you, where units in level. running really is lot where by they these purchase have of refranchise the you a operations. can in doing be we've EBITDA But far. There they is you, brands do And conversations that units base of at Central the I'll new franchisee's a buying those difference, us brand. understand necessarily that type and tend They for just of particular A And the to looking of growth have are all refranchising, in don't they exciting. that in They some resell the of that and love they is very driven business that's the They units, kind brands managers numbers growth point it's build do certainly reflected RRG to many deals we very There where the got the tell with an are to having And long just question. future. it comfort far. was got that previous marketplace. tell you with. a the that kind they after Q. X. great they've a we're acquisition have had in for new interest been so have in And conversations that geography, deal, XX they -- an Even us, And we've cases, on want sometimes where they would can start of the see done desire because X lot of so the Mark, places franchisee, businesses, asset develop, those and it those don't they, idea by are that this value see increasing believe for existing do restaurant. where increase refranchising development. case has just QSR with are that focused love market truly of done that

from. So need really the to have didn't appreciate they large build small acquisition, did to chance but a they acquisition a

Mark Smith

well as maybe Perfect. kind benefits do franchisees that opportunities next there's And it? it marketing contribution, you your as now want brands look discuss on for as Or creep question, to think then at seeing you of do are where higher? And that you we that? have the then from you

Robert Wright

Yes.

and we We I reserve publicly today. right, franchisees, to continue where to think we our more. both the invest with like are

approach is, top invest that or $X you that into going fund brand if you $X, today, we got a the money use on with. There when get we'd plateaus to plateau, that drive really be that In we've investment that X%, then we're can profitability. amount media kind this $X it's the to where investment world natural hit to or opportunities or line, marketing, put is David's expectation we that's will and the of back like And digital we're many creative Our expectation about additional another in incremental the of so leading another $X to where level. you get that use. the have maybe in you in that returns pleased there's a chance that

X%. years, And standard continue so in over invest to that I around the more it, an of expect do of of industry we'll

not we've traffic, we're think catch very operations in about in our investments line rooted been we're with up top upwards get things happy have marketing that we're underlying because how when talking at like they're spending same our the can't X%, returns. Franchisees we of are are the we that marketing and digital to that if are indicators mix the any look brands to to but prove you and the with and seeing ability to digital try Particularly seeing. these can rush the that. we Some and Perks growth been all drive

a think now. good I in place we're now, for So right

Operator

comes Blair. Curtis Matt The William next question from with

Matthew Curtis

back to ask a if recent price most resistance there's any pricing discussion if BIGs increase? been the unchanged, just so this I'm to far? to notice your on right you relatedly, left And moment, proposition you and have last view now I correct consumer signs wrong. the increase, seem of for how And get following me value then wanted I pricing on

wondering was was I thought process So that? what around your

Steven Cirulis

Sure.

Let me dynamic X for second. just take the sort consumer of

be strategy pricing way year, have. modest price increases. that And based If for knew could see remember, in our would our you we talked we we the on we the inflation evolving, when we about

be Our us. zone others. got we first X.X%, to We that recent was come We to needed inflation, where has And a and was the vis-a-vis action was as similar in deliberate. X.X%. back which a had those one

the competitors as like seen, us customer take to it may we've helpful. What a question, our benefited to been relative value other and to that's of to some is have alluded So looks that I our some benefit, have earlier the answer it of base. in continued terms we're price, in that providing

broad. menu well, fairly is As our

data from from, is we you to BIG that favor. And our taking week fast So can or kind what whether we tell, whether and us consistently in position though taking from relative quarter. you equation, we feel away traffic of, continues what share. the like throughout Matt, might put in DSPs movement we're create We're the over still that's week for we even pay sandwiches others, a and casual, where get working to the share, that's over it best around from some see doing see, we our traffic we're week have to

said, demographic, we're Bob it their of relates still in like come still and they think they to employment left that I to levels, to as our spot terms So good have in their as Potbelly. a savings

Xs barriers, we're menu, make psychological well, want want those price as because kind we that I Xs right, related the where kind want price. your and channels. we're We we the where here of into not question to across taking quarter. And headed both in we're second consistent not to we're good pretty then, of make places So of sure the about tend was to to and where taking part within think balance we to feel We things. price across Xth sure and take

a a price. a to as across take take we for we consumers. last that we'll we'll we price, varies. when the category we'll price value sometimes try hit digital-only or have take our BIGs price may menu size-only maintain really And sometimes It So little than others did we increase, this less sometimes bit a

Matthew Curtis

the for us operating run Could for? brand hit line. fund you Okay. contribution, earmarked specifically has expenses Understood. been And other which increased the then through what spend that

Robert Wright

of XXX% and got Brand the their appreciate activations in really because out. We've they promotional channels. marketing, So new got equitable Yes. their fund, shops the manage advertising the got We've and it's promotional across reasons advertising our digital. that to like: it's, mean, that got back media one franchisees media it's they brand right? get should is, we We've paid know I But into we one We've I how -- the That's for search gets products that It's our engine markets. and delivered fashion. and contributions of our do catering, every an activity fund redeployed social. get digital. so say, app rolled the our optimization web is then on.

So it's advertising what of digital the you across would normal for in see us. spectrum

in experiment and for more getting because, to to We that we have continue what media we're there's even can back, some started know we're, we expansion again, know with too, in. we're that that we there, pour investing what

we've got experimentation the way, So do along to some too.

Operator

is The a with follow-up Group. next Hamblin question Capital from Jeremy Craig-Hallum

Jeremy Hamblin

of that, here. want wanted and believe labor? items holiday of to understand, week sure we on typical just to look thinking kind the should occupancy And week Christmas. how for of be the QX, impact these the, a understand XXth that post some make And volumes like to what and about on Just line sales week week, in like you've I got that the is that

Steven Cirulis

Sure.

New one, anyway, and us Eve. it there's includes Year's Christmas for think few I that week, things a probably going includes on. Number

be, we play a it lower the So out, it week. is way would going volume to

how through imagine that rest P&L. flow of can to the you the starts So

week, up it so in and as going around it about, ends Margins forth, think, P&L. if impact be, try to to we up It's ends being those X-day we things, X.X roughly I day be about think not mostly So volume. of same. will really the kinds about week have a think we don't, normally, being the it a our adjustment I

Robert Wright

Jeremy, just couple of a Yes, specifics.

One when the occupancy. week and I accrued look And XXrd spread would things this, is, of that a we of thing for we do costs. with of team that same have his that with any Steve get week that well other fixed and accordingly. the think at don't free like really accounted or something We

it's there, but X little pressure on puts years, to a happens sales than that, just, right? other X it or every So it us

Operator

Thank I to have you. the Ladies reached remarks. for like call turn Bob of and today's back closing the gentlemen, would to question-and-answer we Wright session. over end

Robert Wright

to joining you night. and thank soon. us. again Hope all you for for the and again talking have Thank you, the Operator, We a great your appreciate and evening time forward questions, look all this engagement certainly

Operator

you now for Thank has conference participation. concluded. The your

now your may You lines. disconnect

Potbelly (PBPB) 1 Nov 232023 Q3 Earnings call transcript