Portillo’s (PTLO) Fell as Results Fell Short of Expectations

Core Insights - The Alger Small Cap Focus Fund's third-quarter 2025 investor letter indicates that U.S. equity markets experienced significant growth, with the S&P 500 Index rising by 8.12% due to improving economic conditions, solid corporate earnings, and expectations for monetary easing [1] - The fund's class A shares underperformed compared to the Russell 2000 Growth Index during the same period [1] Company Overview: Portillo's Inc. (NASDAQ:PTLO) - Portillo's Inc. is a fast-casual restaurant chain known for Chicago-style hot dogs and Italian beef sandwiches, operating company-owned locations across the U.S. [3] - The stock of Portillo's Inc. experienced a one-month return of -2.80% and a significant decline of 54.44% over the past 52 weeks, closing at $5.21 per share with a market capitalization of $374.767 million as of November 27, 2025 [2] Financial Performance - In the third quarter of 2025, Portillo's Inc. reported revenue of $181.4 million, which is an increase of $3.2 million compared to Q3 2024 [4] - The company reported weaker-than-expected fiscal second-quarter results, leading management to reduce full-year guidance for same-restaurant sales due to softer traffic and underperformance at newer locations [3] Investment Sentiment - Portillo's Inc. is not among the 30 most popular stocks among hedge funds, with 18 hedge fund portfolios holding the stock at the end of Q3 2025, down from 26 in the previous quarter [4] - While the potential for Portillo's Inc. as an investment is acknowledged, the fund suggests that certain AI stocks may offer greater upside potential and less downside risk [4]