pbpb-20250629

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________

FORM 10-Q

______________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 29, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ____to ____

Commission File Number: 001-36104

______________________________________________

Potbelly Corporation

(Exact name of registrant as specified in its charter)

______________________________________________


Delaware						36-4466837
(State or Other Jurisdiction of Incorporation)						(IRS Employer Identification Number)
500 W Madison St, Suite 1000 Chicago, Illinois						60606
(Address of Principal Executive Offices)						(Zip Code)

Registrant’s Telephone Number, Including Area Code: (312) 951-0600

______________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

PBPB

The NASDAQ Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of July 27, 2025, the registrant had 30,260,672 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

Potbelly Corporation and Subsidiaries

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations (Unaudited)	4
	Condensed Consolidated Statements of Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signature	33

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Potbelly Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(amounts in thousands, except par value data, unaudited)


	June 29, 2025		December 29, 2024
Assets
Current assets
Cash and cash equivalents	$	16,187	$	11,663
Accounts receivable, net of allowances of $40 and $22 as of June 29, 2025 and December 29, 2024, respectively	10,127		9,765
Inventories	3,697		3,744
Prepaid expenses and other current assets	6,983		7,882
Assets classified as held-for-sale	—		147
Total current assets	36,994		33,201

Property and equipment, net	54,391		50,533
Right-of-use assets for operating leases	127,204		133,207
Indefinite-lived intangible assets	3,404		3,404
Goodwill	2,049		2,049
Restricted cash	815		815
Deferred tax assets	33,816		33,816
Deferred expenses, net and other assets	6,568		6,121
Total assets	$	265,241	$	263,146

Liabilities and equity
Current liabilities
Accounts payable	$	9,870	$	9,552
Accrued expenses	37,361		32,872
Short-term operating lease liabilities	26,161		22,809

Total current liabilities	73,392		65,233

Long-term debt, net of current portion	—		4,000
Long-term operating lease liabilities	121,508		127,929
Other long-term liabilities	9,244		8,036
Total liabilities	204,144		205,198

Commitments and contingencies (Note 11)

Equity
Common stock, $0.01 par value—authorized 200,000 shares; outstanding 30,256 and 29,893 shares as of June 29, 2025, and December 29, 2024, respectively	406		398
Warrants	1,437		1,745
Additional paid-in-capital	474,606		470,085
Treasury stock, held at cost, 10,836 and 10,445 shares as of June 29, 2025, and December 29, 2024, respectively	(124,017)		(120,338)
Accumulated deficit	(291,077)		(293,503)
Total stockholders’ equity	61,355		58,387
Non-controlling interest	(258)		(439)
Total equity	61,097		57,948

Total liabilities and equity	$	265,241	$	263,146

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

Potbelly Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data, unaudited)


	For the Quarter Ended				For the Year to Date Ended
	June 29, 2025		June 30, 2024		June 29, 2025		June 30, 2024
Revenues
Sandwich shop sales, net	$	118,396	$	115,536	$	227,398	$	223,113
Franchise royalties, fees and rent income	5,313		4,161		9,992		7,737
Total revenues	123,709		119,697		237,390		230,850

Expenses
Sandwich shop operating expenses, excluding depreciation
Food, beverage and packaging costs	31,110		31,306		59,561		60,576
Labor and related expenses	33,210		32,313		66,307		64,566
Occupancy expenses	12,522		12,543		24,549		24,257
Other operating expenses	21,808		21,264		42,299		41,093
Franchise support, rent and marketing expenses	3,375		3,001		6,473		5,538
General and administrative expenses	13,362		11,866		25,734		23,413
Depreciation expense	3,928		3,016		7,649		6,027
Pre-opening costs	152		96		264		96
Loss on Franchise Growth Acceleration Initiative activities	60		28		95		161
Impairment, loss on disposal of property and equipment and shop closures	480		145		507		886
Total operating expenses	120,007		115,578		233,438		226,613
Income from operations	3,702		4,119		3,952		4,237

Interest expense, net	123		181		290		545
Loss on extinguishment of debt	—		—		—		2,376
Income before income taxes	3,579		3,938		3,662		1,316
Income tax expense (benefit)	665		(30,982)		663		(30,931)
Net income	2,914		34,920		2,999		32,247
Net income attributable to non-controlling interest	426		208		573		302
Net income attributable to Potbelly Corporation	$	2,488	$	34,712	$	2,426	$	31,945

Net income per common share attributable to common stockholders:
Basic	$	0.08	$	1.16	$	0.08	$	1.07
Diluted	$	0.08	$	1.13	$	0.08	$	1.04
Weighted average shares outstanding:
Basic	30,192		29,926		30,041		29,903
Diluted	30,811		30,714		30,785		30,842

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

Potbelly Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

(amounts and shares in thousands, unaudited)


	Common Stock			Treasury Stock		Warrants		Additional Paid-In- Capital		Accumulated Deficit		Non- Controlling Interest		Total Equity
	Shares	Amount
Balance at December 31, 2023	29,364	$	389	$	(116,701)	$	2,219	$	462,583	$	(333,797)	$	(600)	$	14,093
Net (loss) income	—	—		—		—		—		(2,767)		94		(2,673)
Shares issued under equity compensation plan	81	3		(665)		—		(3)		—		—		(665)
Proceeds from exercise of warrants	240	2		—		(474)		1,781		—		—		1,309
Distributions to non-controlling interest	—	—		—		—		—		—		(179)		(179)
Stock-based compensation expense	—	—		—		—		1,771		—		—		1,771
Balance at March 31, 2024	29,685	$	394	$	(117,366)	$	1,745	$	466,132	$	(336,564)	$	(685)	$	13,656
Net income	—	—		—		—		—		34,712		208		34,920
Shares issued under equity compensation plan	345	3		(1,469)		—		(3)		—		—		(1,469)
Distributions to non-controlling interest	—	—		—		—		—		—		(123)		(123)
Stock-based compensation expense	—	—		—		—		1,421		—		—		1,421
Repurchases of common stock	(86)	—		(703)		—		—		—		—		(703)
Balance at June 30, 2024	29,944	$	397	$	(119,538)	$	1,745	$	467,550	$	(301,852)	$	(600)	$	47,702









Balance at December 29, 2024	29,893	$	398	$	(120,338)	$	1,745	$	470,085	$	(293,503)	$	(439)	$	57,948
Net (loss) income	—	—		—		—		—		(62)		147		85
Shares issued under equity compensation plan	114	1		(236)		—		(1)		—		—		(236)
Proceeds from exercise of warrants	—	1		—		(131)		488		—		—		358
Distributions to non-controlling interest	—	—		—		—		—		—		(222)		(222)