[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) This section provides an overview of Potbelly Corporation's strong second fiscal quarter 2025 performance, strategic highlights, and updated financial guidance [Second Fiscal Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Fiscal%20Quarter%202025%20Performance%20Overview) Potbelly Corporation reported strong second fiscal quarter 2025 results, with system-wide sales growing by 6.7% and company-operated same-store sales increasing by 3.2%, accompanied by positive traffic growth. The company also expanded its footprint with eight new shop openings and secured 54 additional franchise shop commitments Metric Comparison (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | System-wide sales growth | 6.7% | N/A | +6.7% | | Company-operated same-store sales growth | 3.2% | N/A | +3.2% | | Total revenues | $123.7 million | $119.7 million | +3.4% | | GAAP net income attributable to Potbelly Corporation | $2.5 million | $34.7 million | -92.8% | | GAAP diluted EPS | $0.08 | $1.13 | -92.9% | | Adjusted net income attributable to Potbelly Corporation | $2.9 million | $2.5 million | +16.0% | | Adjusted diluted EPS | $0.09 | $0.08 | +12.5% | | Adjusted EBITDA | $9.6 million | $8.5 million | +13.0% | - Eight new Potbelly shops were opened during the second quarter, alongside 54 new franchise shop commitments, bringing the total open and committed shop count to **816** as of June 29, 2025[1](index=1&type=chunk)[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Bob Wright expressed satisfaction with the strong Q2 performance, highlighting top-line momentum, positive traffic, new unit growth exceeding expectations, shop-level margin expansion, and adjusted EBITDA near the high end of guidance. The results are attributed to the Five-Pillar Operating Strategy, with future focus on menu innovation, digital asset investments, shop footprint modernization, and prudent cost controls for balanced growth - The company's strong Q2 performance is a result of the Five-Pillar Operating Strategy, driving top-line momentum, positive traffic, and new unit growth[3](index=3&type=chunk) - Future strategic focus areas include menu innovation, investments in consumer-facing digital assets, growing and modernizing the shop footprint, and exercising prudent cost controls to achieve balanced growth and incremental flow-through to corporate earnings[3](index=3&type=chunk) [Financial Outlook and Guidance](index=1&type=section&id=Financial%20Outlook%20and%20Guidance) Potbelly Corporation introduced its guidance for the third fiscal quarter of 2025 and raised its full-year 2025 guidance, reflecting confidence in continued positive same-store sales growth and Adjusted EBITDA performance 3Q'25 Guidance | Metric | Guidance Range | | :---------------------- | :------------- | | Same Store Sales % Growth | 3.25% to 4.25% | | Adjusted EBITDA | $9.0M to $10.0M | Full Year 2025 Guidance | Metric | Guidance Range | | :---------------------- | :------------- | | Same Store Sales % Growth | 2.0% to 3.0% | | New Unit Growth | At least 38 shops | | Adjusted EBITDA | $34M to $35M | [Operational Updates](index=2&type=section&id=Operational%20Updates) This section details Potbelly's expansion efforts through new shop openings and franchise commitments, alongside its share repurchase activities [Development Update](index=2&type=section&id=Development%20Update) During the second quarter, Potbelly continued its expansion with new shop openings and significant franchise commitments, contributing to a growing system-wide footprint - **Eight** new Potbelly shops were opened during the second quarter[6](index=6&type=chunk) - The Company signed **54** new franchise shop commitments in Q2, bringing the total number of open and committed shops to **816** as of June 29, 2025[6](index=6&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) Potbelly actively repurchased shares under its authorized program during the second quarter, demonstrating a commitment to returning value to shareholders - Approximately **113,000** shares of common stock were repurchased for a total of approximately **$1.0 million** during the second quarter[7](index=7&type=chunk) - As of June 29, 2025, **$16.5 million** remained available under the three-year share repurchase program authorized on May 7, 2024[7](index=7&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate details, including investor communication, company background, definitions of key financial terms, and forward-looking statement disclaimers [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Details for the conference call and audio webcast to discuss the second fiscal quarter 2025 results were provided, along with information for accessing the replay - A conference call and audio webcast was scheduled for August 6, 2025, at 5:00 p.m. Eastern Time to discuss the results[9](index=9&type=chunk) - An audio replay will be available through Wednesday, August 13, 2025, via phone and a web-based archive on the company's investor relations website[10](index=10&type=chunk) [About Potbelly Corporation](index=2&type=section&id=About%20Potbelly%20Corporation) Potbelly Corporation is an iconic neighborhood sandwich shop concept known for its warm, toasty sandwiches and friendly service, operating for over 40 years with a significant presence across the United States - Potbelly Corporation is a neighborhood sandwich concept established in Chicago in 1977, offering warm sandwiches, salads, and shakes[11](index=11&type=chunk) - The company operates more than **440** shops in the United States, including over **90** franchised locations[11](index=11&type=chunk) [Definitions of Key Terms](index=2&type=section&id=Definitions%20of%20Key%20Terms) This section provides clear definitions for various financial and operational terms used throughout the press release, including revenue components, sales metrics, and non-GAAP measures, to ensure consistent understanding - Revenues are defined as net company-operated sandwich shop sales and franchise royalties and fees[12](index=12&type=chunk) - Company-operated same-store sales represent the year-over-year change in sales for comparable company-operated stores open for **15 months** or longer[15](index=15&type=chunk) - System-wide sales include sales from both company-operated and franchised shops, net of promotional allowances, discounts, and employee meals[15](index=15&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes several non-GAAP financial measures, such as Adjusted EBITDA, Adjusted Net Income, and Shop-Level Profit, to provide investors with greater transparency and a clearer view of underlying business performance, excluding certain non-cash and non-recurring items - Non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are used by management to evaluate performance and ensure comparability of financial results by excluding certain non-cash charges and other items not reflective of underlying business performance[13](index=13&type=chunk)[14](index=14&type=chunk) - Shop-level profit and shop-level profit margin are key metrics for evaluating the profitability of incremental sales and overall shop performance[15](index=15&type=chunk)[16](index=16&type=chunk) - The presentation of these non-GAAP measures is intended to assist investors in assessing operating performance but should not be considered in isolation or as a substitute for GAAP results[17](index=17&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, outlining the inherent risks and uncertainties that could cause actual results to differ materially from projections, and advises against undue reliance on such statements - Forward-looking statements represent the Company's expectations or beliefs concerning future events and include statements related to future financial position, results of operations, growth, profitability, and guidance[18](index=18&type=chunk) - These statements involve risks and uncertainties, such as competition, economic conditions, labor costs, consumer preferences, and the success of business strategies, which could cause actual results to differ materially[19](index=19&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by law[19](index=19&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents Potbelly's detailed consolidated financial statements, including statements of operations, balance sheets, cash flows, and reconciliations of non-GAAP measures [Consolidated Statements of Operations and Margin Analysis](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Margin%20Analysis) The consolidated statements of operations show a 3.4% increase in total revenues for Q2 2025 compared to Q2 2024, driven by higher sandwich shop sales and franchise income. However, GAAP net income attributable to Potbelly Corporation significantly decreased due to a prior-year income tax benefit Q2 2025 vs Q2 2024 Consolidated Statements of Operations (amounts in thousands) | Metric | Q2 2025 | % of Revenues | Q2 2024 | % of Revenues | YoY Change | | :------------------------------------------ | :------ | :------------ | :------ | :------------ | :--------- | | Sandwich shop sales, net | $118,396 | 95.7% | $115,536 | 96.5% | +2.5% | | Franchise royalties, fees and rent income | $5,313 | 4.3% | $4,161 | 3.5% | +27.7% | | **Total revenues** | **$123,709** | **100.0%** | **$119,697** | **100.0%** | **+3.4%** | | Food, beverage and packaging costs | $31,110 | 26.3% (of shop sales) | $31,306 | 27.1% (of shop sales) | -0.6% | | Labor and related expenses | $33,210 | 28.0% (of shop sales) | $32,313 | 28.0% (of shop sales) | +2.8% | | General and administrative expenses | $13,362 | 10.8% (of total revenues) | $11,866 | 9.9% (of total revenues) | +12.6% | | Income from operations | $3,702 | 3.0% | $4,119 | 3.4% | -10.2% | | Income tax expense (benefit) | $665 | 0.5% | $(30,982) | (25.9%) | N/A | | **Net income attributable to Potbelly Corporation** | **$2,488** | **2.1%** | **$34,712** | **29.0%** | **-92.8%** | | Diluted EPS | $0.08 | N/A | $1.13 | N/A | -92.9% | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 29, 2025, shows an increase in total assets and stockholders' equity compared to December 29, 2024, with notable changes in cash and cash equivalents and a reduction in long-term debt Consolidated Balance Sheet Highlights (amounts in thousands) | Asset/Liability/Equity | Jun 29, 2025 | Dec 29, 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $16,187 | $11,663 | +$4,524 | | Total current assets | $36,994 | $33,201 | +$3,793 | | Property and equipment, net | $54,391 | $50,533 | +$3,858 | | Total assets | $265,241 | $263,146 | +$2,095 | | Total current liabilities | $73,392 | $65,233 | +$8,159 | | Long-term debt, net of current portion | $0 | $4,000 | -$4,000 | | Total liabilities | $204,144 | $205,198 | -$1,054 | | Total stockholders' equity | $61,355 | $58,387 | +$2,968 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year-to-date ended June 29, 2025, Potbelly generated significantly more cash from operating activities compared to the prior year, while cash used in investing and financing activities also saw changes, resulting in a positive net change in cash YTD Cash Flow Summary (amounts in thousands) | Cash Flow Activity | YTD Jun 29, 2025 | YTD Jun 30, 2024 | Change | | :----------------------------------- | :--------------- | :--------------- | :----- | | Net cash provided by operating activities | $22,366 | $3,850 | +$18,516 | | Net cash used in investing activities | $(10,755) | $(8,460) | -$2,295 | | Net cash used in financing activities | $(7,087) | $(20,856) | +$13,769 | | Net change in cash and cash equivalents and restricted cash | $4,524 | $(25,466) | +$29,990 | | Cash and cash equivalents and restricted cash at end of period | $17,002 | $9,071 | +$7,931 | [Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20to%20GAAP%20Financial%20Measures) This section provides detailed reconciliations of non-GAAP financial measures, including Adjusted Net Income, Adjusted EBITDA, and Shop-Level Profit, to their most directly comparable GAAP measures, highlighting adjustments for items like impairment, debt extinguishment, and legal settlements Adjusted Net Income Attributable to Potbelly Corporation (amounts in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net income attributable to Potbelly Corporation, as reported | $2,488 | $34,712 | $2,426 | $31,945 | | Total adjustments after income tax | $435 | $(32,188) | $540 | $(29,192) | | **Adjusted net income attributable to Potbelly Corporation** | **$2,923** | **$2,524** | **$2,966** | **$2,753** | | Adjusted diluted EPS | $0.09 | $0.08 | $0.10 | $0.09 | Adjusted EBITDA (amounts in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Net income attributable to Potbelly Corporation, as reported | $2,488 | $34,712 | $2,426 | $31,945 | | EBITDA | $7,204 | $6,927 | $11,028 | $7,586 | | Total adjustments to EBITDA | $2,428 | $1,594 | $4,126 | $6,615 | | **Adjusted EBITDA** | **$9,632** | **$8,521** | **$15,154** | **$14,201** | Shop-level Profit and Margin (amounts in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------- | :------- | | Shop-level profit | $19,746 | $18,110 | $34,682 | $32,621 | | Shop-level profit margin | 16.7% | 15.7% | 15.3% | 14.6% | [Selected Operating Data](index=11&type=section&id=Selected%20Operating%20Data) The selected operating data provides key performance indicators for Potbelly's operations, including company-operated same-store sales growth, system-wide sales, and detailed shop count changes for both company-operated and franchised locations Selected Operating Data Highlights | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Company-operated same store sales | 3.2% | 0.4% | 2.1% | 0.1% | | Sales from company-operated shops, net (in thousands) | $118,396 | $115,536 | $227,398 | $223,113 | | Sales from franchise shops, net (in thousands) | $35,774 | $28,934 | $67,433 | $55,545 | | System-wide sales (in thousands) | $154,170 | $144,470 | $294,831 | $278,658 | Shop Count Changes | Shop Type | Beginning of Q2 2025 | Openings (Q2) | Closures (Q2) | End of Q2 2025 | | :-------------------- | :------------------- | :------------ | :------------ | :------------- | | Company-operated shops | 341 | 2 | (3) | 340 | | Franchised shops | 103 | 6 | (2) | 107 | | System-wide shops | 444 | 8 | (5) | 447 | [Footnotes to Financial Statements](index=12&type=section&id=Footnotes%20to%20Financial%20Statements) This section provides explanatory footnotes detailing the nature of adjustments made in the reconciliation of non-GAAP financial measures, clarifying specific costs and their impact on reported figures - Adjustment (1) includes costs related to impairment of long-lived assets, loss on disposal of property and equipment, and shop closure expenses[34](index=34&type=chunk) - Adjustment (3) covers costs associated with the Franchise Growth Acceleration Initiative, aimed at growing franchise units through multi-unit development agreements, potentially including refranchising company-operated shops[34](index=34&type=chunk) - Adjustment (5) accounts for the income tax impacts of the other listed adjustments based on the Company's effective tax rate[34](index=34&type=chunk)

Core Insights - Potbelly Corporation reported a strong second quarter with system-wide sales growth of 6.7%, including a 3.2% increase in company-operated same-store sales and positive traffic growth [1][4] - The company opened eight new shops and secured 54 additional franchise commitments during the second quarter [6][8] - Potbelly raised its full-year guidance and introduced guidance for Q3 2025, projecting same-store sales growth of 3.25% to 4.25% [5] Financial Performance - Total revenues for the second quarter increased by 3.4% to $123.7 million compared to $119.7 million in the prior year [7] - Adjusted EBITDA rose by 13.0% to $9.6 million, up from $8.5 million [7][32] - GAAP net income was reported at $2.5 million, a decrease from $34.7 million in the previous year, primarily due to a prior year tax benefit [7][30] Operational Highlights - Average Weekly Sales (AWS) increased by 3.6% to $27,040 compared to $26,110 [7] - The total number of open and committed shops reached 816 as of June 29, 2025 [8] - The company repurchased approximately 113,000 shares of common stock for about $1.0 million during the second quarter [9] Future Outlook - For Q3 2025, Potbelly expects adjusted EBITDA between $9.0 million and $10.0 million, with full-year adjusted EBITDA guidance set at $34 million to $35 million [5] - The company aims to open at least 38 new shops in 2025 [5]

Core Viewpoint - Potbelly Corporation is set to release its second quarter 2025 financial results on August 6, 2025, after market close, followed by a conference call for investors to discuss the results [2][3]. Financial Results Announcement - Potbelly will report its financial results for the fiscal second quarter 2025 on Wednesday, August 6, 2025, after market close [2]. - A conference call is scheduled for the same day at 5:00 p.m. Eastern Time, hosted by President and CEO Bob Wright and CFO Steve Cirulis [2][3]. Conference Call Details - Date: Wednesday, August 6, 2025 [3] - Time: 5:00 p.m. Eastern Time [3] - Dial-In Numbers: 844-676-5533 (U.S. & Canada), 412-634-6942 (International) [3] - The call will be webcast live on the company's corporate website, with an audio replay available until August 13, 2025 [3]. Company Overview - Potbelly Corporation has been serving customers with warm, toasty sandwiches and other fresh menu items for over 40 years, emphasizing Fresh, Fast & Friendly service [4]. - The company has expanded to over 440 shops across the United States, including more than 90 franchised locations [4].

Company Overview - Potbelly (NASDAQ: PBPB) has experienced a significant turnaround since reaching all-time lows in 2020, particularly following the appointment of CEO Robert Wright in July 2020 [1]. Strategic Changes - Under CEO Robert Wright's leadership, Potbelly has undergone numerous changes aimed at revitalizing the brand and improving performance [1]. Investment Perspective - The analysis emphasizes a long-term investment perspective, focusing on identifying companies with a competitive advantage that can adapt to industry changes without losing their edge [1].

Summary of Potbelly (PBPB) FY Conference Call - June 04, 2025 Company Overview - Potbelly is a fast casual restaurant chain known for its sandwich-based menu, with a strong brand presence and customer loyalty [11][20][21] - The company has experienced significant growth and transformation since 2020, moving from a turnaround phase to a growth phase [23][72] Key Metrics and Financial Performance - As of Q1 2025, Potbelly had 444 open locations and 766 open and committed locations, including 103 franchise locations [22] - System sales growth of 34% over the past three years, with nearly 700 basis points of margin expansion at the shop level [27] - Digital sales now account for 42% of total business, up from 9% at the beginning of the pandemic [74] - Adjusted EBITDA increased from near zero to approximately $30 million last year [28] - The company aims to reach 2,000 units in the U.S., projecting system sales to exceed $3 billion at that scale [55][72] Strategic Initiatives - Potbelly's growth strategy is built on five pillars: great food, great value, great people, digital growth, and franchise expansion [29][30] - Menu innovation has been a key focus, with recent additions including new sandwiches and beverages that have resonated well with customers [33][35][74] - The company is replatforming its digital customer experience to enhance user engagement and streamline operations [41][43] Franchise Growth - Potbelly has a strong franchise development pipeline, with 322 committed locations not yet open and 70% of franchisees actively developing new units [46][50] - The franchise model is seen as a significant driver of future growth, with attractive unit-level economics and support for new franchisees [50][72] Market Position and Competitive Advantage - Potbelly has outperformed the fast casual industry in same-store sales and traffic over the last three quarters [59] - The company emphasizes a three-layered value approach, focusing on intrinsic value, everyday value, and promotional value to enhance customer experience [38][39] Future Outlook - The company maintains a positive outlook for continued growth, with guidance for low to mid-single-digit same-store sales growth and unit growth in the low double digits [70][72] - Potbelly is committed to leveraging its digital capabilities and franchise model to drive profitability and expand its market presence [72][76] Additional Insights - The management team has a clear focus on maintaining alignment across the organization regarding growth objectives and performance metrics [30] - Potbelly's unique brand cachet and customer loyalty are seen as critical assets for future expansion [20][21]

Company Overview - Potbelly Corporation is a neighborhood sandwich concept that has been serving customers for over 40 years, offering warm sandwiches, signature salads, hand-dipped shakes, and other fresh menu items [2] - The company operates more than 440 shops across the United States, including over 90 franchised locations [2] Upcoming Investor Conferences - The company will participate in the Craig-Hallum 22nd Annual Institutional Investor Conference in Minneapolis, MN on May 28, 2025, holding one-on-one meetings with investors [3] - On June 4, 2025, Potbelly will present at the William Blair 45th Annual Growth Stock Conference in Chicago, IL, with the presentation scheduled to begin at 4:40 PM Central Time, which will be webcast live [3]

Group 1 - The company specializes in analyzing restaurant stocks in the U.S. market, covering various segments such as QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] - The founder actively engages in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] Group 2 - The company has no stock, option, or similar derivative position in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not receiving compensation from any company mentioned [2] - Seeking Alpha clarifies that past performance is not a guarantee of future results and that no investment recommendations are being made [3]

Group 1 - Potbelly (NASDAQ: PBPB) reported a +0.9% growth in company-operated same-store sales for Q1 2025, despite facing an estimated 1.5% negative impact from severe winter weather, indicating strong performance that exceeded expectations by a couple of percent [2] - The positive sales growth positions Potbelly well for future performance and reflects resilience in challenging weather conditions [2] - The company is part of a broader investment focus on value opportunities and distressed plays, particularly in the energy sector, as highlighted by the Distressed Value Investing group [2]

Company Performance - Potbelly (PBPB) reported break-even quarterly earnings per share, surpassing the Zacks Consensus Estimate of a loss of $0.02, and compared to earnings of $0.01 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $113.68 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.96%, and showing an increase from year-ago revenues of $111.15 million [2] - Over the last four quarters, Potbelly has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - Potbelly shares have declined approximately 10.4% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.08 on revenues of $123.2 million, and for the current fiscal year, it is $0.21 on revenues of $479.2 million [7] Industry Context - The Retail - Restaurants industry, to which Potbelly belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - System-wide sales for Q1 2025 increased approximately 4.8% year over year to $140.7 million, with total revenue rising approximately 2.3% year over year to $113.7 million [21] - First quarter adjusted EBITDA was $5.5 million, representing 4.9% of total revenue, a 2.8% decrease year over year due to a prior year settlement payment benefit [21][26] - Company-operated shop revenue increased approximately 1.3% year over year to $109 million, while franchise revenue surged approximately 30.8% year over year to $4.7 million [22] Business Line Data and Key Metrics Changes - Same store sales growth was 0.9% for the full quarter, driven by a 1.1% increase in average check, partially offset by a 0.2% decrease in transactions [22] - Franchise units increased by 26%, contributing to the significant rise in franchise revenue [22] Market Data and Key Metrics Changes - Digital sales represented over 42% of total shop sales during the first quarter, an increase of approximately 200 basis points compared to the previous year [14] - The company expects to open at least six new shops in Q2 2025, with a total of at least 38 new shops anticipated for the year [17][28] Company Strategy and Development Direction - The company is focused on driving same store sales growth through menu innovation, digital investments, and prudent cost controls [10][20] - Plans include modernizing the shop footprint and accelerating unit openings through franchising efforts, aiming for a total of 2,000 units in the U.S. [19][30] - The company is also investing in digital assets and data analytics to enhance customer engagement and operational efficiency [14][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth plan despite potential pressures from tariffs and a challenging consumer environment [27] - The company anticipates same store sales growth of 1.5% to 2.5% for the full year 2025, with adjusted EBITDA projected at approximately $33 million to $34 million [28] Other Important Information - The company reported a slight net loss of $62,000 for the quarter, an improvement of $2.7 million over the prior year [26] - The company purchased approximately 117,000 shares of common stock for about $1.1 million during the first quarter [26] Q&A Session Summary Question: What is driving the outsized performance in same store sales? - Management attributed the performance to menu innovation, digital marketing efforts, and improved value offerings [34][35] Question: Can you provide insights on franchising initiatives and unit level economics? - Management noted strong interest from franchisees due to positive trends in unit level economics and the brand's appeal [41][42] Question: What are the trends in digital ordering and loyalty penetration? - Digital sales increased significantly, and the company is investing in enhancing its digital platforms and loyalty programs [51][52] Question: What are the expectations for inflation and pricing for the rest of the year? - The company anticipates a full-year gross price increase of just over 3%, aligning with inflation expectations [66] Question: What is the status of the PDK rollout and its impact on labor costs? - The company is on track to retrofit half of its company shops with the new system, which is expected to yield labor savings [70][71]