About a month after reporting a disappointing Q1 and lowering full year earnings guidance, the lead man at Potbelly (PBPB 11.80, +0.95 +8.76%) is calling it quits.
The stock, PBPB that is, trades about 16% lower off highs the day before the Q1 report and has fared modestly better YTD (-10.7%). Shares trade at about 34x FY17 EPS at this juncture compared to peer Panera Bread’s (PNRA 314.36, -0.10 -0.03%) 47x P/E and Chipotle Mexican Grill’s (CMG 477.06, +1.36 +0.29%) nearly 145x P/E multiple.
Getting back to the management news, PBPB’s CEO Aylwin Lewis announced in a press release last night that he would be departing the company on August 8, 2017, after nine years of service. Since the company went public back in 2013, Aylwin has helped PBPB expand from full year total revenues of $299.8 million to $407.1 million in full year 2016. Total company-owned restaurants in 2013 were 296, and now stand at 411 thanks to Aylwin’s expansion efforts at PBPB.
Also under Aylwin’s tenure, PBPB has made an attempt to keep up with peers in terms of technology. Whether it be the loyalty program or the mobile app, PBPB has not fallen behind its competition in the recent move to mobile. Only time will tell if these efforts will aid waning traffic and operating environment pressure.
That being said, investors seem to be taking the management move well as shares trade higher in reaction to Aylwin’s departure. The Q1 EPS and revenue miss from May 2 still seems fresh in investor’s minds. Perhaps investors also see potential for a full year EPS revision as that metric was lowered during the May 2 print. Guidance was lowered due to the challenging restaurant environment and negative traffic trends, and stands at $0.35-0.38 compared to prior guidance of $0.45-0.47.