Potbelly(US:PBPB)2022-03-03 18:52Financial Data and Key Metrics Changes - In Q4 2021, total revenues reached $102.8 million, a 37% increase compared to Q4 2020, with same-store sales rising approximately 34% [10][25] - For the full year 2021, revenues totaled $380 million, up 30% from 2020, with same-store sales increasing over 30% [10][35] - The company reported positive adjusted EBITDA of $2.6 million in Q4 2021, a significant improvement from an adjusted EBITDA loss of $6.9 million in the prior year [26] - Shop level margins improved to 11.2% in Q4 2021, compared to negative 0.6% in Q4 2020 [27] Business Line Data and Key Metrics Changes - Digital sales accounted for approximately 36% of total sales for the full year, growing by about 11% year-over-year [16] - The annualized average unit volume (AUV) reached $1.05 million in Q4 2021, marking the second consecutive quarter at this level [14] Market Data and Key Metrics Changes - Significant recovery was noted across all shop types, particularly in airport, CBD, and university locations, which had previously lagged [15][40] - Same-store sales for CBD locations showed improvement, with expectations for continued recovery as businesses return to offices [43] Company Strategy and Development Direction - The company is focused on executing its five-pillar strategy to drive traffic and profitability, with an emphasis on digital marketing and customer engagement [17][48] - A long-term growth plan aims for AUVs of $1.3 million by 2024, with a target of at least 10% annual unit growth through franchising [59][67] - The company plans to refranchise approximately 25% of its company-operated shops over the next three years to spur growth [69] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, expecting record AUVs and double-digit growth in same-store sales despite ongoing inflationary pressures [49][50] - The company is proactively addressing labor market challenges with competitive wages and retention programs [21][30] Other Important Information - The company ended Q4 2021 with total liquidity of $28.8 million, including $14.4 million in cash [33] - G&A expenses were $9.0 million in Q4 2021, slightly decreasing as a percentage of total revenue due to higher sales volume [27] Q&A Session Summary Question: What are the top priorities to achieve the $1.3 million AUV target? - Management highlighted recovery in shop types, incrementality of digital business, and market penetration through refranchising as key priorities [74][76] Question: How much of the gap to $1.3 million can be filled by CBD recovery? - Management indicated that while CBD recovery will contribute, it is not solely dependent on it, as overall recovery is expected to drive AUV growth [80] Question: What are the projections for food and labor inflation in 2022? - The company anticipates continued inflation pressures, with COGS inflation around 7.4% for Q4 and labor inflation over 11% [81][82] Question: What is the composition of the 2,000 unit goal? - The majority of new units are expected to be suburban and drive-through locations, with continued support for CBD locations [85][86]