Why Potbelly Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of sandwich-shop operator Potbelly soared 13% today after its quarterly results and outlook topped Wall Street expectations.
So what: The stock has been sluggish since its IPO in early October, but a delicious first report -- third-quarter adjusted profit surged 26.7% on a revenue jump of 11.7% -- coupled with upside guidance is prompting investors to quickly raise their growth estimates. In fact, same-store sales increased 2.5% while shop-level profit margins expanded 50 basis points, giving analysts plenty of good vibes over its competitive positioning, as well.
Now what: Management now sees full-year adjusted EPS of $7.5 million to $8.1 million on revenue of $300 million to $303 million. "We view the IPO as a significant milestone, but not a destination," said Chairman and CEO Aylwin Lewis. "Our focus remains on operating the business and delivering long-term shareholder value." More important, with the stock still off more than 10% from its IPO-day high, there might be room left to benefit from that bullishness.
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The article Why Potbelly Shares Popped originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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