Potbelly (NASDAQ:PBPB) Corporation (NASDAQ:PBPB), a well-known chain of sandwich restaurants with a market capitalization of $271 million and annual revenue of $472 million, has announced a change in its certifying accountant. According to InvestingPro data, the company trades at an attractive P/E ratio of 7x and has maintained profitability over the last twelve months.
On Monday, the company's Audit Committee completed a competitive selection process, appointing KPMG LLP as the new independent registered public accounting firm for the fiscal year ending December 27, 2025. This decision is contingent on KPMG completing standard client acceptance procedures and the finalization of an engagement letter.
The transition to KPMG will take place following the completion and issuance of an audit report on Potbelly's consolidated financial statements and internal control over financial reporting for the fiscal year ended December 29, 2024, by the outgoing auditor, Deloitte & Touche LLP.
Deloitte's reports for the fiscal years ended December 31, 2023, and December 25, 2022, did not contain any adverse opinions or qualifications regarding the company's financial statements.
Potbelly has confirmed that there were no disagreements or reportable events, as defined by SEC regulations, with Deloitte during the fiscal years in question or the subsequent interim period through January 3, 2025. Furthermore, Potbelly has not consulted with KPMG on any accounting principles or auditing matters during these periods.
In compliance with SEC procedures, Potbelly provided Deloitte with a draft of the 8-K filing, which includes these changes. Deloitte has furnished a letter to the SEC, attached as Exhibit 16.1 in the filing, confirming their agreement with the statements made by Potbelly in the report.
This change in Potbelly's financial oversight comes as the company prepares its annual report for the fiscal year 2024. Potbelly's decision to switch auditors reflects a common practice among public companies to periodically evaluate and select accounting firms that best fit their auditing needs.
With analyst price targets ranging from $14 to $16, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports.
The information for this article is based on a recent SEC filing by Potbelly Corporation.
In other recent news, Potbelly Corporation reported an increase in system-wide sales and a significant rise in franchise revenue during its Third Quarter 2024 Earnings Call. The company's revenues hit $115.1 million, while system-wide sales reached approximately $139.2 million, marking a 1% growth. Potbelly also reported a 19% year-over-year growth in adjusted EBITDA to $8.7 million and a net income of $3.7 million.
The company's strategy of focusing on digital sales, which now constitute over 38% of total shop sales, and the opening of 8 new shops were key factors in this growth. Potbelly's franchise revenue surged 79% to $4.4 million due to a 30% increase in franchised units. However, the company projects 2024 to be the best year for unit growth since 2017, with a record number of franchise shops.
These recent developments reflect Potbelly's resilience and strategic growth, as highlighted by CEO Bob Wright. Despite a challenging consumer environment, the company continues to strategically grow through its 5-pillar plan, digital sales, and refranchising efforts. The company's updated loyalty program and value offerings position it well for future growth.
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