Portillo’s(US:PTLO)2025-02-25 18:38Financial Data and Key Metrics Changes - Same restaurant sales increased by 0.4% in Q4 2024, while full-year comp sales were down 0.6% [8][9] - Total revenue for Q4 was $184.6 million, a decrease of $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 [9][26] - Restaurant-level adjusted EBITDA for Q4 was $45.2 million, with a margin of 24.5%, compared to $26.1 million in Q4 2023 [9][36][39] - Adjusted EBITDA decreased by 3.6% year-over-year, but grew 6.3% when excluding the impact of the extra week [39] Business Line Data and Key Metrics Changes - Revenue growth in Q4 was driven by non-comparable restaurants contributing $8.6 million, while same restaurant sales growth contributed approximately $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 anticipates commodity inflation of 3% to 5% in 2025, with significant pressures expected from beef [33][78] - Labor as a percentage of revenues decreased to 24.6% in Q4 2024 from 25.4% in Q4 2023, driven by an increase in average check and lower variable-based compensation [33] Company Strategy and Development Direction - The company plans to open twelve new restaurants in 2025, focusing on a smaller footprint to reduce build costs [14][134] - Key traffic-driving strategies include expanding kiosk usage, advertising beyond Chicagoland, launching a loyalty program, and improving operational efficiency [12][16] - The company is developing additional restaurant formats, including a more efficient operating model and walk-up locations [15][134] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the plans for 2025, despite challenges such as weather impacting early momentum [11][30] - The company expects revenue growth to be driven by new restaurant openings and modest same-store sales growth in the range of flat to 2% [30][110] Other Important Information - The company has implemented a new app-less loyalty program aimed at driving traffic and engagement [17][100] - Cash from operations increased by 38.5% year-over-year to $98 million year-to-date, with $22.9 million in cash at the end of the quarter [43][44] 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 [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 the company is working to reclaim 45 seconds of lost time [52][53] Question: Restaurant of the Future prototype performance - Initial performance of the new prototype is promising, with no significant difference in revenue or traffic compared to traditional formats [57][58] Question: Menu streamlining effects - Streamlining the menu has reduced complexity and improved throughput, with positive feedback from customers on key items [61][62] Question: Traffic growth expectations for 2025 - Management expects steady improvement in traffic throughout the year, with a conservative guide reflecting modest pricing and mix improvements [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 [115][116] Question: Loyalty program rollout - The loyalty program is in soft launch and expected to fully launch in March, with anticipated positive impacts in Q2 [122] Question: New store maturity curve in Texas - New restaurants in Texas are performing more consistently with mature market expectations, with a focus on achieving density quickly [128][131] Question: Development of non-traditional formats - The company is fine-tuning the drive-through only format and exploring new locations, including walk-up options [96][98]