Q1 Earnings Roundup: Potbelly (NASDAQ:PBPB) And The Rest Of The Modern Fast Food Segment

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Potbelly (NASDAQ:PBPB) and the best and worst performers in the modern fast food industry.

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 very strong Q1; on average, revenues beat analyst consensus estimates by 2.3%. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but modern fast food stocks have shown resilience, with share prices up 5.5% on average since the previous earnings results.

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 $111.2 million, down 6% year on year, topping analysts' expectations by 1.5%. It was a mixed quarter for the company. Although sales and EPS beat in the quarter, guidance was a negative. Q2 same store sales and adjusted EBITDA guidance were both below expectations, and the company lowered its same store sales and adjusted EBITDA growth guidance for 2024.

Bob Wright, President and Chief Executive Officer of Potbelly Corporation, commented, “We’re proud of our solid start to the year across multiple fronts. In terms of profitability, we successfully managed both restaurant-level and corporate costs, driving a 150-basis point expansion in shop-level margins as well as strong corporate profitability with adjusted EBITDA of $5.7 million. On the development front, our franchise sales team added 32 additional commitments to our pipeline during the quarter leading to a 26% increase in open and committed shops year-over-year. We remain excited by the possibilities of this unique brand and believe that we continue to put the building blocks in place to achieve this potential.”

Potbelly delivered the slowest revenue growth of the whole group. The stock is down 12.8% since the results and currently trades at $8.65.

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

Best Q1: Wingstop (NASDAQ:WING)

The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.

Wingstop reported revenues of $145.8 million, up 34.1% year on year, outperforming analysts' expectations by 7.2%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue estimates.

Wingstop pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 0.4% since the results and currently trades at $383.2.

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

Sweetgreen (NYSE:SG)

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Sweetgreen reported revenues of $157.9 million, up 26.2% year on year, exceeding analysts' expectations by 3.9%. It was a solid quarter for the company, with an impressive beat of analysts' revenue estimates.

Sweetgreen delivered the highest full-year guidance raise in the group. The stock is up 38.1% since the results and currently trades at $32.54.

Read our full analysis of Sweetgreen's results here.

Noodles (NASDAQ:NDLS)

Offering pasta, mac and cheese, pad thai, and more, Noodles & Company (NASDAQ:NDLS) is a casual restaurant chain that serves all manner of noodles from around the world.

Noodles reported revenues of $121.4 million, down 3.7% year on year, linine with analysts' expectations. It was a strong quarter for the company, with a solid beat of analysts' earnings estimates.

Noodles had the weakest full-year guidance update among its peers. The stock is up 6% since the results and currently trades at $1.85.

Read our full, actionable report on Noodles 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.

Shake Shack reported revenues of $290.5 million, up 14.7% year on year, falling short of analysts' expectations by 0.2%. It was a very strong quarter for the company, with an impressive beat of analysts' gross margin estimates and a solid beat of analysts' earnings estimates.

Shake Shack had the weakest performance against analyst estimates among its peers. The stock is down 5.5% since the results and currently trades at $97.65.

Read our full, actionable report on Shake Shack here, it's free.

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