Stock Market Watch

Potbelly Shares Soar about 120% on First Trading Day

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Shares of Potbelly Corp. (NASDAQ: PBPB) catapulted more than 100% on their first trading day on Friday.  Not surprising, given that the sandwich chain’s low-priced menus have been drawing high customer traffic amid weak macroeconomic environment.

Several other food companies have also made successful initial public offerings (IPOs) in the recent past. Natural and organic grocery chain, Sprout Farmers, which made its IPO in August, saw shares skyrocket 123% on the first trading day. Likewise, restaurant chain, Noodles & Co. stock more than doubled after it went public in June.

Potbelly, which made its IPO at $14 per share, raised $105 million, which was more than company anticipated. The stock soared almost 120% to close at $30.77 on Friday.

Restaurant chains such as Potbelly and Noodles & Co. are mainly benefitting from two factors: low price and high -quality nutritional menus even as fast food chains and casual dining chains such as Olive Garden struggle to retain customers as they get more health conscious and thrifty.

According to Technomic, a consulting firm, sales at these low-priced high nutritional chains have climbed 13.2% in 2012, which is more than double compared to sales of other fast-food chains. Sales at casual dining chains rose just 2% in the same period.

In 2012, Potbelly’s sales climbed more than 15% to $274.9 million while income trebled to $24 million. Same-store-sales, a key gauge on restaurant chain’s performance, have been consistently strong, showing positive growth in 12 of the preceding 13 quarters.

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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