Financial Data and Key Metrics Changes - System-wide sales increased by 13.9% to $1.3 billion, while same-store sales declined by 1.9% for the quarter [7][25] - Total revenue increased by 12% to $174.3 million compared to the prior year [25] - Adjusted EBITDA rose by 14.3% to $59.2 million, and adjusted EPS was $1 per diluted share, a 1.6% increase year-over-year [27] Business Line Data and Key Metrics Changes - Company-owned restaurant sales increased by $2.6 million due to same-store sales growth of 3.6% [25] - Cost of sales as a percentage of company-owned sales was 75.2%, a decline of 70 basis points [26] - The implementation of the Wingstop Smart Kitchen has led to a consistent average ticket time of ten minutes [26][15] Market Data and Key Metrics Changes - The company opened 129 net new restaurants globally in the second quarter, marking a nearly 20% growth rate [9][20] - The international business is showing strong demand, with new restaurants in Sydney and Paris exceeding expectations [21][22] Company Strategy and Development Direction - The company aims to scale brand awareness, drive menu innovation, expand delivery channels, and invest in digital transformation [9][19] - The long-term target is to achieve average unit volumes (AUVs) of $3 million, supported by the success of the Wingstop Smart Kitchen [17][19] - The company has updated its guidance for unit growth to 17% to 18% for 2025, reflecting strong demand from brand partners [20][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged uncertainty in consumer behavior and spending habits but remains focused on executing strategies [10][22] - The company expects to return to positive same-store sales growth as the year progresses, particularly in the latter half of the third quarter [38][86] - Management expressed confidence in the long-term strategies and the potential of the Wingstop Smart Kitchen to enhance operational efficiency [41][43] Other Important Information - The company has increased its quarterly dividend from $0.27 to $0.30 per share, reflecting the strength of its business model [28] - The digital database has grown by 30%, now approaching 60 million, which will support the upcoming loyalty program [18][56] Q&A Session Summary Question: Clarification on third quarter guidance - Management noted some softness in consumer demand but expects to return to growth as comparisons ease in the latter half of the third quarter [36][38] Question: Impact of Smart Kitchen on sales - Early results from the Smart Kitchen indicate improvements in speed and guest satisfaction, with sales outperformance noted in the Dallas Fort Worth market [41][43] Question: Unit growth and franchisee demand - The company is encouraged by the pace of development and the record level of sold commitments, indicating strong franchisee demand [46][50] Question: Details on the loyalty program - The loyalty program is designed to create an emotional connection with guests, leveraging insights from the growing digital database [56][57] Question: Impact of value deals on customer behavior - The 20 for 20 bundle performed well, leading to higher average checks and demonstrating the company's ability to offer value without sacrificing margins [62][63] Question: Changes in delivery mix with Smart Kitchen - Restaurants with Smart Kitchen are seeing mid-single-digit growth in delivery sales, indicating improved performance [69] Question: Future unit growth normalization - Management is focused on disciplined and sustainable growth, with a strong pipeline of sold commitments supporting future expansion [98][100]

Financial Data and Key Metrics Changes - Total revenue for Q1 reached $176.4 million, reflecting an increase of $10.6 million or 6.4% compared to the previous year [18][19] - Same restaurant sales increased by 1.8%, contributing approximately $2.6 million to revenue growth [20] - Restaurant level adjusted EBITDA was $36.7 million with a margin of 20.8%, a decrease of 110 basis points from the previous year [27] - Adjusted EBITDA for Q1 was $21.2 million, down 2.6% from the previous year [29] - General and administrative expenses increased to $18.9 million, representing 10.7% of revenue [28] Business Line Data and Key Metrics Changes - New restaurants not in the comparable base contributed $7.9 million in revenue growth [19] - The average check increased by 4.9%, partially offset by a 3.1% decrease in transactions [20] - The company plans to open 12 new restaurants this year, with 10 in the new Restaurant of the Future format [16] Market Data and Key Metrics Changes - The advertising campaign in Dallas Fort Worth increased brand awareness by about 10% and drove high single-digit sales increases [10] - The company is running a similar campaign in Phoenix to boost brand awareness [10] Company Strategy and Development Direction - The company is focusing on four key tactics: advertising beyond Chicagoland, launching the Portillo's Perks loyalty program, continuous operational improvements, and optimizing kiosks [9] - The loyalty program aims for a personalized, data-driven approach based on guest behavior, with a goal of 1.6 million sign-ups by mid-year [56] - The company is testing breakfast offerings in five Chicagoland restaurants, with positive early feedback [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macro pressures but expressed confidence in the brand's resilience and strategies to drive traffic [17] - The company expects comp sales growth in the range of 1% to 3% and total revenue growth of 10% to 12% for the year [22][23] - Management noted that newer restaurants are experiencing slower starts but are optimistic about their long-term performance [23][54] Other Important Information - Food, beverage, and packaging costs as a percentage of revenues increased to 34.6% due to commodity price increases [24] - Labor costs as a percentage of revenues increased to 26.6%, driven by lower transactions and increased wage rates [25] - The company ended the quarter with $12.9 million in cash and plans to use cash generated from operations to fund new restaurant growth [32] Q&A Session Summary Question: Concerns about new restaurant performance in Houston - Management indicated that the slower performance is due to brand awareness and not operational issues, emphasizing a focus on field marketing to build awareness [38][39] Question: Impact of recent openings on revenue guidance - The widening of the revenue range is primarily related to the class of '24 openings rather than expectations for '25 [40][41] Question: Testing breakfast offerings - The breakfast test is being conducted quietly to ensure operational execution, with plans for broader marketing if successful [90] Question: Performance of new units and marketing strategies - Management noted that marketing efforts in Houston were less aggressive compared to Dallas, which contributed to slower starts [54][98] Question: Insights on the Portillo's Perks program - Initial metrics indicate strong guest responsiveness to offers, exceeding internal expectations [56][108]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 reached $176.4 million, reflecting an increase of $10.6 million or 6.4% compared to the previous year [16] - Same restaurant sales increased by 1.8%, contributing approximately $2.6 million to revenue growth [17] - Restaurant level adjusted EBITDA was $36.7 million with a margin of 20.8%, a decrease of 110 basis points from the previous year [24] - Adjusted EBITDA decreased by 2.6% to $21.2 million compared to Q1 2024 [25] - General and administrative expenses increased to $18.9 million, representing 10.7% of revenue [25] Business Line Data and Key Metrics Changes - New restaurants not in the comparable base contributed $7.9 million to revenue growth [16] - The average check increased by 4.9%, driven by a 4.4% increase in menu prices [17] - Labor costs as a percentage of revenues increased to 26.6% due to lower transactions and increased wage rates [22] Market Data and Key Metrics Changes - The Dallas Fort Worth advertising campaign increased brand awareness by about 10% and drove high single-digit sales increases in that region [8] - Newer markets remain vulnerable until brand awareness is established, as seen in Houston [36] Company Strategy and Development Direction - The company plans to open 12 new restaurants in 2025, with 10 in the new Restaurant of the Future format [14] - The Portillo's Perks loyalty program aims to enhance customer engagement through personalized offers [9] - The company is focusing on operational excellence, including hospitality, speed, and accuracy [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures but expressed confidence in the brand's resilience and strategies [15] - The company expects comp sales growth to be in the range of 1% to 3% for the remainder of the year [19] - Commodity inflation is forecasted at 3% to 5% for 2025, with significant pressures from beef prices [21] Other Important Information - Cash from operations increased by 4.1% year over year to $9.5 million [28] - The effective interest rate decreased to 7% from 8.4% in 2024 [26] Q&A Session Summary Question: Concerns about new restaurant performance in Houston - Management indicated that the slower performance is due to brand awareness issues rather than operational problems, and they are increasing marketing efforts to build awareness [36] Question: Impact of recent openings on revenue guidance - The widening of the revenue range is primarily related to the class of '24 openings rather than expectations for '25 [38] Question: Update on breakfast test in Chicago - The breakfast test is being conducted quietly to ensure operational execution, with plans for broader marketing if successful [42][86] Question: Performance of new units and marketing strategies - Management noted that marketing efforts were less aggressive in Houston compared to Dallas, which contributed to slower initial performance [94] Question: Insights on the Portillo's Perks program - Initial metrics indicate strong guest responsiveness to offers, exceeding internal expectations [104]