Portillo’s(PTLO)2025-02-25 18:38Financial Data and Key Metrics Changes - Same restaurant sales increased by 0.4% in Q4 2024, while full-year comparable sales were down 0.6% [8][9] - Total revenue for Q4 2024 was 3.2 million or 1.7% year-over-year, but grew 6.1% when excluding the impact of an additional operating week in Q4 2023 [26][27] - Restaurant-level adjusted EBITDA for Q4 2024 was 26.1 million in Q4 2023 [9][36][39] Business Line Data and Key Metrics Changes - Revenue growth in Q4 was driven by non-comparable restaurants contributing 600,000 [27] - Average check increased by 4.1%, driven by a 4.7% increase in certain menu prices, partially offset by a 3.7% decrease in transactions [28] Market Data and Key Metrics Changes - The company plans to open twelve new restaurants in 2025, focusing on Texas and Georgia, with a new compact restaurant format expected to lower build costs significantly [14][15][134] - The advertising campaign launched in Dallas-Fort Worth aims to increase brand awareness in Texas, targeting a market with previously low recognition [16][88] Company Strategy and Development Direction - The company is focusing on four key traffic-driving strategies: expanding kiosk usage, advertising beyond Chicagoland, launching the Portillo's Perks loyalty program, and improving operational efficiency [12] - The new compact restaurant format aims to reduce average build costs by over a million dollars, with expectations for strong returns [13][134] Management's Comments on Operating Environment and Future Outlook - Management acknowledged industry headwinds, including weather impacts in February, but expressed confidence in the underlying strength of the business and anticipated improvements in the latter half of 2025 [11][50] - The company expects revenue growth to continue driven by new restaurant openings and modest same-store sales growth in the range of flat to 2% [30] Other Important Information - Commodity inflation is estimated at 3% to 5% for 2025, with significant pressures expected from beef [33][78] - The company has reduced its term loan from 250 million, increasing financial flexibility to support growth strategies [40][41] Q&A Session Summary Question: Weather impact on Q1 performance - Management has not quantified the weather impact but remains confident in achieving full-year guidance of 0% to 2% growth despite early challenges [48][50] Question: Drive-through speed improvements - Every thirty seconds of improved throughput in the drive-through is equivalent to one point of comp, and management is optimistic about deploying improvements quickly if tests continue to perform well [52][54] Question: Restaurant of the Future prototype performance - Initial performance of the new restaurant format is promising, with expectations for improved operational efficiency and capital returns [57][60] Question: Menu streamlining effects - Streamlining the menu has reduced complexity and improved throughput, with positive feedback from customers on key items being reintroduced [62][64] Question: Traffic growth expectations - Management anticipates steady improvement in traffic throughout the year, with a conservative approach to pricing and mix [110][112] Question: New restaurant openings in Atlanta - The new restaurant in Atlanta is expected to open in the back half of 2025, with uncertain volume predictions due to being a first-in-market location [115][116] Question: Loyalty program rollout - The loyalty program is in soft launch and expected to fully launch in March, with anticipated positive impacts on traffic in Q2 [122] Question: New store maturity in Texas - New restaurants in Texas are performing more consistently with mature market expectations, with a focus on achieving density for effective marketing [128][131] Question: Non-traditional restaurant formats - The company is fine-tuning the drive-through only format and exploring additional locations, including walk-up options [96][98]