Portillo's (NasdaqGS:PTLO) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Speaker9Hello. Thank you for standing by. Welcome to the Portillo's fourth quarter 2025 conference call and webcast. I would now like to turn the call over to Chris Brandon, Vice President of Investor Relations at Portillo's, to begin.Speaker3Thanks, operator. Good morning, everyone. Welcome to the Portillo's fourth quarter and full year 2025 earnings call. With me today are Mike Miles, Chairman of the Board and Principal Executi ...

Core Insights - Portillo's has appointed Brett Patterson as President and CEO, effective February 23, 2026, who will also join the Board of Directors [1] - Patterson has extensive leadership experience in the restaurant industry, focusing on operations, team development, and sustainable growth [2] - The Board believes Patterson possesses the necessary qualities to lead Portillo's into its next growth phase while maintaining the brand's unique identity [3] Company Overview - Portillo's is a fast-casual restaurant chain based in Chicago, known for its Italian beef sandwiches, Chicago-style hot dogs, and other menu items, with over 100 locations across 11 states [5] - The company operates a model that combines dine-in, drive-thru, takeout, and delivery, aiming to provide an experience-focused dining environment [5] - Portillo's is committed to expanding its brand and bringing its iconic food to a wider audience across the country [5] Leadership Vision - Patterson aims to enhance the company's overall strategy, focusing on market positioning, new restaurant growth, and operational excellence [3] - He emphasizes the importance of investing in team members and improving the guest experience as part of the company's growth strategy [3][4] - Patterson expresses excitement about joining Portillo's, highlighting the brand's strong culture and passionate fan base [4]

Core Insights - Marco's Pizza has appointed Bill Schaffler as Chief Financial Officer and Steve Kennedy as Chief Marketing Officer to support its growth strategy [8] - Both executives bring over two decades of experience in restaurant finance and marketing, which will aid in maintaining disciplined financial leadership and innovative marketing [8] - The pizza chain opened 41 restaurants in the first half of 2025 and is projected to achieve a 28% year-over-year increase in new store openings [8] Group 1: Executive Appointments - Bill Schaffler has a background in multi-unit expansion and financial performance, previously serving as CFO at Hopdoddy Burger Bar [3][4] - Steve Kennedy has experience in marketing and digital transformation, having served as EVP and head of marketing at Noodles & Company [5][6] - Both executives are expected to enhance Marco's growth through data-driven marketing and operational efficiencies [7][8] Group 2: Growth Strategy - Marco's Pizza aims to accelerate growth by emphasizing quality, people, and franchisee relationships [7] - The company is focused on maintaining a disciplined approach to financial leadership while pursuing aggressive expansion plans [8] - The chain's recent performance indicates a strong trajectory with significant new store openings planned [8]

Financial Data and Key Metrics Changes - System-wide sales decreased by 3.3% to $181.9 million compared to the previous year [19] - Total revenue for the quarter was $87.8 million, a 4.1% decrease from $91.6 million in the prior year [20] - Net loss for the quarter was $20.8 million, compared to a loss of $10.7 million in the previous year [26] - Adjusted EBITDA decreased to $5.2 million from $7 million in the prior year [26] Business Line Data and Key Metrics Changes - Twin Peaks revenue increased by 5.8% to $51.1 million, driven by new lodge openings, despite a decline in same-store sales [20] - Smoky Bones revenue decreased by 15.2% to $36.7 million due to strategic conversions and temporary closures [21] - Restaurant level contribution margin for Twin Peaks decreased to 17.7% from 18% in the prior year [25] - Smoky Bones restaurant level contribution margin decreased to 4.9% from 9% in the prior year [25] Market Data and Key Metrics Changes - The second quarter experienced softer sales and traffic due to less favorable sports calendaring, impacting engagement [20] - The absence of key market teams in the NBA and NHL playoffs contributed to lower sales [20] Company Strategy and Development Direction - The company is focusing on operational excellence, reducing complexity, and enhancing guest experience [7][8] - A streamlined menu is being tested to improve execution and speed of service [10] - The company plans to accelerate growth with a robust pipeline of 100 committed lodges, with 75% from existing franchise partners [14] - The strategy includes positioning Twin Peaks as a premier destination for sports events and enhancing community engagement [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and the potential for growth despite current challenges [17] - The company anticipates stronger revenue gains in the second half of the year due to an improved sports calendar [14][16] - Management is committed to protecting the brand's core values while exploring new opportunities for innovation [17] Other Important Information - The US Department of Justice dropped all charges against FAT Brands, the parent company, which is seen as a positive development [18] - Twin Peaks ranked 97th on the 2025 Technomic Top 500 list of the largest restaurant chains in the US [29] - The company raised over $100,000 for Texas flood relief efforts, highlighting its commitment to community support [29] Q&A Session Summary Question: What is the outlook for Smoky Bones over the next six months? - Management indicated there will be moderate changes, with minimal adjustments expected until performance assessments are completed [35][36] Question: What is the increase in General and Administrative (G&A) expenses attributed to? - The increase in G&A expenses was primarily due to equity grants following the public listing, which is expected to decrease significantly going forward [41][42] Question: Is there room for improvement in store-level margins? - Management expressed confidence in finding improvements in sales and bottom-line performance as the sports calendar improves [43][44]