Portillo’s Inc. Announces First Quarter Financial Results

Core Insights - Portillo's Inc. reported a 6.4% increase in total revenue for Q1 2025, amounting to $176.4 million, compared to $165.8 million in Q1 2024, driven by new restaurant openings and an increase in same-restaurant sales [4][8][9] - Same-restaurant sales rose by 1.8% in Q1 2025, a recovery from a 1.2% decline in the same period last year, attributed to a 4.9% increase in average check despite a 3.1% decrease in transactions [4][8][9] - The company experienced commodity inflation of 3.4% in Q1 2025, down from 4.8% in Q1 2024, while labor costs as a percentage of revenue increased by 0.5% due to lower transactions and higher benefit expenses [5][10] Financial Performance - Operating income increased by $0.3 million to $10.4 million, reflecting a 2.8% rise compared to the previous year [12] - Net income decreased by $1.4 million to $4.0 million, a decline of 25.3%, primarily due to a $2.5 million increase in income tax expense [13] - Restaurant-Level Adjusted EBITDA rose by $0.3 million to $36.7 million, while Adjusted EBITDA decreased by $0.6 million to $21.2 million [14] Operational Developments - The company opened ten new restaurants in 2024, contributing $7.9 million to the revenue increase [8] - Portillo's is focusing on traffic-driving strategies, including the launch of the "Portillo's Perks" loyalty program and testing breakfast offerings at five locations [7][17] - The company plans to open 12 new restaurants in fiscal 2025, with a focus on markets outside Chicagoland, particularly in Texas and Atlanta [17] Financial Targets - Updated financial targets for fiscal 2025 include same-restaurant sales growth of 1% to 3% and revenue growth of 10% to 12% [18] - Long-term financial targets project annual unit growth of 12% to 15% and mid-teens revenue growth [20] Key Metrics - Total restaurants increased to 94 as of March 30, 2025, from 85 a year earlier [41] - Average Unit Volume (AUV) decreased to $8.7 million from $9.0 million [41] - Restaurant-Level Adjusted EBITDA Margin was 20.8%, down from 21.9% in the previous year [41]