Potbelly Corp (PBPB) Earnings Report: Brace for More Indigestion? COSI, BAGL & PNRA

The Q1 2014 Potbelly Corp (NASDAQ: PBPB) earnings report is scheduled for after the market closes on Tuesday, May 6th, with investors and traders alike who follow either the sandwich restaurant chain stock (which debuted last October and is down some 44% for retail investors) or who are into potential small cap peers like Cosi Inc (NASDAQ: COSI), Einstein Noah Restaurant Group, Inc (NASDAQ: BAGL) and Panera Bread Co (NASDAQ: PNRA) should be paying attention. Aside from the Potbelly Corp earnings report, it should be said that the Q1 2014 Panera Bread Co earnings report was last Tuesday while the Q1 2014 Einstein Noah Restaurant Group, Inc earnings report came last Thursday and the the Q1 2014 Cosi Inc earnings report is likely scheduled for Monday, May 12. However, Potbelly Corp has attracted a bit of attention for its potential growth trajectory as well as its vision to be the "Neighborhood Sandwich Shop."

What Should You Watch Out for With the Potbelly Corp Earnings Report?

First, here is a quick recap of Potbelly Corp recent earnings history:

Earnings History  Sep 13Dec 13

EPS Est	N/A	N/A	0.09	0.04
EPS Actual	N/A	N/A	0.15	0.06
Difference	N/A	N/A	0.06	0.02
Surprise %	N/A	N/A	66.70%	50.00%

 

Last February, Potbelly Corp fell nearly 10% after an earnings report that left investors decidedly hungry when revenues came in at $74.8M (below expectations of $76M) and the company swung into a loss, blaming winter weather for weak same-store sales – the same excuse Panera Bread used when it reported earnings that also disappointed. Moreover, Potbelly Corp also warned that the same snow and ice had already cast a chill on first-quarter store traffic.

This time around and according to Yahoo! Finance analyst estimates page, the consensus expects revenues of $73.66M (note that this is the consensus of only 4 analysts) and EPS of zero - down from expectations of EPS of $0.01 some 60 days ago and EPS of $0.05 ninety days ago. Moreover and according to HighShortInterest.com, Potbelly Corp is the tenth most shorted stock on the Nasdaq with short interest of 35.70% – meaning its going to be interesting to see what happens right after earnings.

As for recent news, William Blair analyst Sharon Zackfia did upgrade the stock to Outperform from Market Perform in early April, saying the stock is unlikely to drop a great deal further as investors are already well aware of the cold weather that's lasted well into spring time.

What do the Potbelly Corp Charts Say?

The latest technical chart for Potbelly Corp shows that the stock has been a complete dud for retail investors:

However, the performance of potential peers like Cosi Inc, Einstein Noah Restaurant Group and Panera Bread has not exactly been great tasting either if you did not get in at the right time:

And for reference, here are the latest technical charts for Cosi Inc, Einstein Noah Restaurant Group and Panera Bread:

What Should Be Your Next Move?

Obviously when you have short interest of 35.70%, there is a very good chance of an outsized move in either direction. The real question for investors and traders alike is whether or not Potbelly Corp's share price will finally find a floor to stand on.