Potbelly Shares Surge 120% in Market Debut
Potbelly, a Chicago-based sandwich franchise, surged nearly 120 percent in its first day as a publicly-traded company, securing a spot as one of the top IPO debuts of 2013.
The stock was priced at $14 a share but quickly jumped to $28.79 at Friday's open. Shares reached an intraday high of $33.78 before ending the day at $30.68, up 119.8 percent.
Potbelly isn't the first casual restaurant chain to harness IPO debut success this year. Noodles & Co., which went public in June, saw its stock surge 104 percent in its first trading day. Shares of Noodles are currently at $43.46, trading 141 percent above their IPO price.
The chain, known for its toasted sandwiches and freshly baked cookies, has expanded rapidly in recent years. Potbelly opened its 300th store in 2013, with a domestic base of 295. In the last year, total shop growth was 16 percent. The company reports that it plans to grow the number of Potbelly shops at least 10 percent annually in the long term. Potbelly reported total revenue in 2012 of more than $274 million, a 15% increase from 2011, according to regulatory filings.
Potbelly started offering franchise opportunities in 2010. However, the vast majority of its restaurants are company-owned. Franchisees operate six shops in the United States and 12 shops in the Middle East. The company stated in its offering documents that it doesn't expect franchise revenue to be significant in the near future – right now franchise royalties and fee represent less than 1 percent of total revenue – but Potbelly says it plans to grow that in the long term.
The sandwich chain began in a small antique store in Chicago in 1977. In 1996, Bryan Keil bought the shop from the original owner and began to swiftly expand. By 2005, the chain comprised of 100 shops, reaching 200 by 2008. Keil now serves as a director of the company. Former Sears Holdings chief executive Aylwin Lewis runs the company as CEO.