Potbelly Corporation (NASDAQ:PBPB) Q3 2019 Earnings Conference Call Transcript

Nov 04, 2019 • 05:00 pm ET

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Potbelly Corporation (NASDAQ:PBPB) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, everyone, and welcome to Potbelly Corporation's Third Quarter Fiscal 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Mr. Matt Revord, Potbelly's Chief Legal Officer. Please go ahead, sir.

Executive
Matthew Revord

Good afternoon, everyone, and welcome to our third quarter earnings call.

Before we get started, I'd like to note that certain comments made on this call will contain forward-looking statements regarding future events or future financial performance of the Company. Any such statements, including our outlook for 2019 or any other future periods, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance nor should they be rely upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and events or results could differ materially from those presented due to a number of risks and uncertainties. Additional detailed information concerning these risks regarding our business and the factors that could cause actual results to differ materially from the forward-looking statements and other information will be good today, can be found in our most recent annual report on Form 10-K under the headings Risk Factors and MD&A, and in our subsequent filings with the Securities and Exchange Commission, which are available at sec.gov.

Our presenters there are Alan Johnson, our Chief Executive Officer; and Tom Fitzgerald, our Chief Financial Officer. After our prepared remarks, we'll open the call for your questions.

I'll now turn the call over to Alan.

Executive
Alan Johnson

Thank you, Matt. Good afternoon everyone and thank you for joining us today. I'm going to spend some time discussing how our strategic efforts to reposition the Company are performing and then Tom will provide more specific details on our third quarter results. I'll get started with a few high-level results for the quarter.

Same-store sales were down 3%, as weaker traffic trends persisted throughout the quarter. Our strategic initiatives are showing positive results as this is the second quarter in a row of sequential improvement, and we are seeing a continuation of that trend through the first few weeks of the fourth quarter. However, these initiatives have not been enough to offset the impact of weaker traffic and so we are going to talk today about our plan to accelerate our turnaround progress.

First, I want to update you on our four strategic pillars. One, our menu optimization efforts continue to drive positive results as they have helped grow our average check by 580 basis points year-over-year.

Two, sales for our off-premise and digital channel were up 18% in the quarter, driven by the DoorDash national rollout that took place in early July. And as you saw last week, we recently announced a new nationwide partnership with Grubhub. We see this as an important step as we expand our delivery reach and digital brand awareness. Off-premise and digital sales represent 21.6% of our Q3 sales, which is an all-time high for