Group 1 - The consumer discretionary sector has identified oversold stocks, presenting potential buying opportunities for undervalued companies [1][2] - An asset is considered oversold when the Relative Strength Index (RSI) is below 30, which helps traders gauge short-term performance [1] Group 2 - Portillo's Inc (PTLO) has an RSI of 23.5, with shares closing at $6.13 after a 20% decline over the past month and a 52-week low of $6.00 [7] - America's CAR-MART Inc (CRMT) has an RSI of 27.5, with shares closing at $34.55 after a 23% decline over the past month and a 52-week low of $33.50 [7] - Cheesecake Factory Inc (CAKE) has an RSI of 23.1, with shares closing at $56.53 after a 10% decline over the past month and a 52-week low of $36.78 [7]

Summary of Portillo's Conference Call Company Overview - **Company**: Portillo's - **Industry**: Restaurant and Food Distribution Key Points and Arguments Same-Store Sales and Traffic - Portillo's has revised its same-store sales outlook due to a challenging restaurant environment, indicating a shift in consumer behavior and a slowdown in traffic [3][4][5] - The management emphasizes the importance of operational excellence and a strong value proposition to drive traffic [4][5] Financial Guidance and Unit Openings - The company lowered its guidance for the full year, reflecting a decline in top-line performance [6][7] - The number of new restaurant openings has been reduced from 12 to 8 for the year, with 6 additional locations under construction [7][21] - For 2026, Portillo's plans to open 8 new restaurants, with a focus on improving unit economics [7][22] Strategic Board Additions - New board members, including Jack Hartung and Gene Lee, are contributing to the company's strategic reset and operational improvements [9] Value Proposition in Chicagoland - Portillo's believes its value proposition in Chicagoland is strong, particularly in quality and quantity, but acknowledges the need to reassess pricing strategies [11][12] Simplifying Operations - The company is discontinuing breakfast offerings to focus on core lunch and dinner traffic, alongside eliminating 18 to 20 other internal projects that do not drive transactions [19][18] Development Strategy - Portillo's is shifting its development strategy to ensure better unit economics, with a focus on reducing build costs for new restaurants [21][22][30] - The company is exploring financing options to lower capital burdens and improve cash-on-cash returns [30][31] Marketing and Brand Awareness - A new Chief Marketing Officer, Denise, has been hired to enhance brand communication and awareness, particularly in Texas [35][39] - Portillo's is actively engaging in grassroots marketing efforts in Texas, including food sampling and community involvement [39][40] Kiosk Deployment - The kiosk initiative has been successful, with ongoing improvements to enhance customer interaction [46] Supply Chain Management - Portillo's is managing commodity inflation effectively, particularly in beef, and is about 90% locked on beef lots for 2025 [47][49] Closing Remarks - The management reiterates a strong focus on driving traffic and achieving best-in-class unit-level economics, while also emphasizing the importance of eliminating non-essential projects [51] Additional Important Content - The company is optimistic about its cash flow generation and views the current phase as a reset rather than a decline [51] - Portillo's is exploring new restaurant formats, including inline locations, to adapt to changing market dynamics [24][25]

Core Insights - Portillo's is implementing a strategic reset to focus on core markets, enhance unit economics, and ensure long-term success [1][2] - The company aims to drive sustainable traffic through consistent service and value, while also emphasizing disciplined development for strong unit economics [2] Financial Performance - Same-restaurant sales for Q3 2025 are expected to decline by 2.0% to 2.5% due to pricing and promotional dynamics [3] - Updated fiscal 2025 financial targets include: - Unit growth revised from 12 new units to 8 new units - Same-restaurant sales target adjusted from 1% to 3% to a range of (1%) to (1.5%) - Revenue target set at $730 to $733 million - Restaurant-level adjusted EBITDA margin revised from 22.5% to 23% to 21.0% to 21.5% - General and administrative expenses reduced from $78 to $80 million to $72 to $75 million - Pre-opening expenses decreased from $11 to $12 million to approximately $9 million - Adjusted EBITDA target set at $94 to $98 million [4][5] Development Outlook - The company plans to open 8 new restaurants in fiscal 2026, including its first airport location at DFW, with an average net build cost of less than $5 million per restaurant [6]

Core Viewpoint - Portillo's is implementing a strategic reset of its development and growth plans to focus on core markets, enhance unit economics, and ensure long-term success [1][2]. Financial Performance - The company anticipates same-restaurant sales for Q3 2025 to decline by 2.0% to 2.5% due to pricing and promotional dynamics in the industry [3]. - Updated fiscal 2025 financial targets include: - Unit growth revised from 12 new units to 8 new units - Same-restaurant sales target adjusted from 1% to 3% to a range of (1%) to (1.5%) - Revenue target set at $730 to $733 million - Restaurant-level adjusted EBITDA margin revised from 22.5% to 23% to a range of 21.0% to 21.5% - General and administrative expenses reduced from $78 to $80 million to a range of $72 to $75 million - Pre-opening expenses decreased from $11 to $12 million to approximately $9 million - Adjusted EBITDA target set at $94 to $98 million [4][5]. Development Outlook - For fiscal 2026, the company plans to open 8 new restaurants, including its first airport location at DFW, with an average net build cost of less than $5 million per restaurant [7]. Strategic Initiatives - The company aims to drive transactions by reinforcing value and service, simplifying operations, and optimizing capital deployment to achieve positive free cash flow in 2026 [8].

Company Overview - Portillo's, Inc. has evolved from a small hot dog trailer in Chicago to over 90 restaurants across 10 states [2] - The brand is recognized for its unique menu, which includes Italian beef sandwiches, Chicago-style hot dogs, char-grilled burgers, fresh salads, and chocolate cake [2] - Portillo's operates a company-owned model that focuses on creating experience-oriented destinations, offering dine-in, drive-thru, takeout, and delivery services [2] Upcoming Event - Portillo's Management will host a Fireside Chat and Q&A session featuring President and CEO Michael Osanloo and CFO Michelle Hook [1] - The event is scheduled for September 10 at 4:30 p.m. EDT and will be available via live webcast [1] - The webcast will be archived on the Portillo's Investor Relations website for future viewing [1]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential [1] - The popularity of insurance companies in the Philippines since 2014 indicates a shift in investment strategies among local investors [1] - The diversification of investment portfolios across various industries and market capitalizations is becoming a common practice among investors [1] Investment Trends - There is a notable trend of investing in blue-chip companies initially, followed by a broader investment strategy that includes different sectors such as banking, telecommunications, and retail [1] - The entry into the US market has been facilitated by platforms like Seeking Alpha, which provide valuable analyses for comparison with local markets [1] - The focus on retirement investments alongside trading profits suggests a dual strategy aimed at long-term financial security and short-term gains [1] Market Engagement - The logistics and shipping industries are gaining traction in both the ASEAN and US markets, indicating a robust demand for these services [1] - The experience of acting as a personal broker for a relative has enhanced awareness and understanding of the US market dynamics [1] - The continuous use of analytical tools and resources from platforms like Seeking Alpha reflects a commitment to informed investment decisions [1]

Core Insights - Portillo's has appointed Denise Lauer as Chief Marketing Officer, effective September 22, 2025, bringing over two decades of marketing experience in the foodservice and food CPG industries [1][2]. Company Overview - Portillo's is a unique restaurant brand that has expanded from a small hot dog trailer in Chicago to over 95 locations across 10 states, offering a menu that includes Italian beef sandwiches, Chicago-style hot dogs, and more [6]. Leadership and Strategy - Denise Lauer previously served as CMO for Marco's Pizza, where she led initiatives that positioned the brand as a top competitor in the U.S. pizza market, focusing on brand growth, digital marketing, and customer experience [2][3]. - Lauer's appointment is part of Portillo's strategy to strengthen its leadership team and enhance sales and transaction growth while providing exceptional dining experiences [4]. Marketing Initiatives - At Marco's Pizza, Lauer developed a multi-year innovation pipeline and a successful value platform that increased customer check and trip frequency, alongside driving digital transformation for online ordering [3]. - Lauer aims to enhance Portillo's digital capabilities and grow brand awareness as the company expands into new markets [5].

Core Insights - Portillo's has introduced two new secret menu items exclusively for Portillo's Perks members, enhancing customer loyalty and engagement [1][9] - The new offerings include Chili Cheese Fries and a Triple Cheeseburger, designed to appeal to both long-time fans and new customers [2][3] Company Overview - Portillo's operates over 95 restaurants across 10 states, evolving from a small hot dog trailer in Chicago to a beloved brand known for its diverse menu [5] - The company focuses on creating experience-oriented dining destinations that include dine-in, drive-thru, takeout, and delivery options [5] Loyalty Program - The Portillo's Perks loyalty program allows members to earn and redeem rewards, with exclusive access to the secret menu items [6] - Membership can be obtained through the Portillo's website, encouraging customer participation and enhancing brand loyalty [3][6]

Company Overview - Portillo's stock has experienced a decline, currently trading near all-time lows after an initial surge post-IPO in October 2021 [1][4] - The company has a loyal customer base in Chicago and is attempting to expand nationwide [2] Growth Potential - At a current price of approximately $7.60 per share, an investment of $1,000 would purchase 131 shares, with a target price of $38 per share representing a fivefold increase [4] - The company's P/E ratio is around 18, significantly lower than Chipotle's 39, suggesting potential for multiple expansion [5] Financial Projections - Portillo's has revised its 2025 revenue growth projection down to 5% to 7%, from a previous estimate of 10% to 12% [6] - The slowdown in financial growth may reduce the likelihood of achieving a higher P/E ratio, impacting investor sentiment [6] Expansion Plans - Despite the slowdown, Portillo's plans to add 12 new locations in the second half of the year, increasing from the current 95 restaurants [7] - The addition of only one location in the first half raises concerns about the feasibility of the expansion plan and the potential for a more significant slowdown than anticipated [8]

Financial Data and Key Metrics Changes - Revenues for the second quarter were $188.5 million, reflecting a 3.6% increase year-over-year [20] - Same restaurant sales increased by 0.7%, driven by a 2.1% increase in average check, partially offset by a 1.4% decrease in transactions [21] - Restaurant level adjusted EBITDA was $44.5 million with a margin of 23.6%, a decrease of 90 basis points from the prior year [25] - Adjusted EBITDA for the quarter was $30.1 million, an increase of 0.7% from the previous year [26] - Cash from operations decreased by 31.1% year-over-year to $28.7 million year-to-date [28] Business Line Data and Key Metrics Changes - Non-comp restaurants contributed $6.1 million in revenue during the quarter, while same restaurant sales growth was flat on a two-year stack basis [20][21] - The company is on track to open 12 restaurants in 2025, with build costs reduced to an average of $5.2 million to $5.5 million per restaurant [12][29] Market Data and Key Metrics Changes - Transactions were down 1.4% for the quarter, but there was a sequential improvement of 170 basis points over Q1 [9] - The company is focusing on multichannel marketing in key markets like Phoenix and Dallas, which have shown sales lifts [10] Company Strategy and Development Direction - The company is focused on building awareness and driving transactions while maintaining high-quality food and guest experience [6] - Key initiatives include multichannel marketing, operational improvements, kiosk adoption, and evolving the Portillo's Perks loyalty program [10][12] - The company is refining its new market playbook, with a focus on sustained marketing investment in Texas [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Texas but remains confident in mid-teens revenue growth by 2026 [36] - The company is actively managing inflationary pressures through price increases and operational efficiencies [22][23] - Management expects total revenue growth for 2025 to be in the range of 5% to 7% [28] Other Important Information - Berkshire Partners redeemed $7.3 million in LLC units for Class A common stock, reducing their ownership to approximately 5.2% [18][19] - The company is nearly 90% hedged on beef prices, which is expected to mitigate inflationary impacts [62] Q&A Session Summary Question: Mix in the quarter and path to mid-teens revenue growth - Management explained that while kiosk usage increased items per transaction, there was a trade-down effect impacting the mix [38] - They remain confident in achieving mid-teens revenue growth by 2026 through foundational work in Texas [36] Question: Performance of new stores and marketing efforts - Management noted that some restaurants are entering their second year, and marketing efforts are ongoing to improve performance [43][45] Question: Labor and commodity inflation outlook - Management expects labor inflation to remain at 3% to 4% for the year, while commodity inflation is forecasted at 3% to 5%, primarily driven by beef [62][67] Question: Breakfast testing and limited menu impact - Breakfast testing is going well, appearing to be incremental without negatively affecting lunch or dinner sales [85] - The limited menu in Houston had some learnings, and management is adding back popular items [91] Question: Portillo's Perks loyalty program - The loyalty program has nearly 2 million members, and management sees potential for it to drive repeat frequency in expansion markets [99][103]