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]