What Happened?

Shares of casual sandwich chain Potbelly (NASDAQ:PBPB) jumped 14.8% in the morning session after the company reported strong preliminary Q4 2024 guidance. Same-store sales are now projected to grow slightly by 0.2% to 0.3% y/y, a sharp turnaround from the earlier forecasted decline of 2.5% to 0.5%. Adjusted EBITDA is expected to reach between $8.0 million and $8.4 million, up from the previous estimate of $7.0 million to $8.0 million. Management expressed positive sentiment about the improvements in both sales and profits and plans to add 38 new shop sites in 2025 to better meet rising market demand. Overall, the results underscore management's improved execution capabilities.

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What The Market Is Telling Us

Potbelly’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Potbelly and indicate this news significantly impacted the market’s perception of the business.

Potbelly is up 6.9% since the beginning of the year, but at $10.02 per share, it is still trading 29% below its 52-week high of $14.12 from February 2024. Investors who bought $1,000 worth of Potbelly’s shares 5 years ago would now be looking at an investment worth $2,414.

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