Revenue during the quarter grew 5.99 percent to $101.70 million from $95.96 million in the previous year period. Gross margin for the quarter expanded 50 basis points over the previous year period to 59.85 percent. Total expenses were 98.76 percent of quarterly revenues, up from 98.03 percent for the same period last year. That has resulted in a contraction of 73 basis points in operating margin to 1.24 percent.

Operating income for the quarter was $1.26 million, compared with $1.89 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $9.22 million compared with $8.21 million in the prior year period. At the same time, adjusted EBITDA margin improved 51 basis points in the quarter to 9.06 percent from 8.55 percent in the last year period.

Aylwin Lewis, Chairman and Chief Executive Officer of Potbelly Corporation, commented, "During the first quarter, we delivered revenue growth of 6% and adjusted net income growth of approximately 17%. The operating environment remained highly challenging for restaurants, and our business performance was reflective of these negative traffic trends experienced throughout most of the industry. Our comparable store sales decline of 3.1% fell short of our expectations, as traffic at the end of 2016 continued to decline into 2017."

For the fiscal year 2017, Potbelly Corporation forecasts adjusted net income to be in the range of $9 million to $10 million. The company forecasts diluted earnings per share to be in the range of $0.35 to $0.38 on adjusted basis.