Portillos Inc
For the period ended Mar 30, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2025 · Filed May 6, 2025
PTLO$6.64-5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-29; filed 2024-11-05.
0001871509-24-000139
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-30; filed 2025-05-06.
0001871509-25-000094
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 168 previous paragraphs and 137 current paragraphs.
81 unchanged; 31 reworded; 24 added; 51 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
•Total revenue increased 6.4% or $10.6 million to $176.4 million;
Current report
•Same restaurant sales increased 1.8%;
Current report
•Operating income increased $0.3 million to $10.4 million;
Current report
•Net income decreased $1.4 million to $4.0 million;
Current report
•Restaurant-Level Adjusted EBITDA* increased $0.3 million to $36.7 million; and
Current report
•Adjusted EBITDA* decreased $0.6 million to $21.2 million.
Current report
In the quarter ended March 30, 2025, total revenue, operating income, and restaurant-level adjusted EBITDA improved versus the prior year. Our strategy is guided by the following four key pillars, each with a focus on driving traffic, improving margins, and maximizing returns:
Current report
•Running world class operations: excellence in hospitality, drive-thru optimization, accuracy & guest recovery, optimize new restaurant openings
Current report
•Innovating and amplifying the Portillo's experience: new market awareness, loyalty-driven value, expand guest base via digital engagement, purposeful menu innovation
Current report
•Building restaurants with industry-leading returns: smarter spaces, optimized investments, maximize unit economics, scale quickly, standardize processes
Current report
•Taking great care of our teams: meaningful work environment, igniting talent and careers, total rewards that matter, enhanced
Current report
In 2025, our traffic driving strategies include (1) the launch of our "Portillo's Perks”TM loyalty program, (2) advertising beyond Chicagoland, (3) operational improvements in speed of service, accuracy and hospitality, and (4) driving kiosk usage. Additionally, early in the second quarter, we announced that we are testing breakfast at five locations in Chicagoland.
Current report
No new restaurants were opened during the quarter ended March 30, 2025.
Current report
In fiscal 2025, we plan to open 12 new restaurants. Our near-term restaurant growth strategy is focused on leveraging our proven unit economic
Current report
model in markets primarily outside Chicagoland with favorable macro-economic tailwinds where we already have a presence. Particularly, our
Current report
current focus continues to be in the Sunbelt, primarily in Texas, with plans to enter the Atlanta, Georgia and San Antonio, Texas markets in the second half of 2025. Additionally, we plan to open our first in-line, walk-up restaurant format later this year. Simultaneously, we will continue to fill-in existing markets, including Chicagoland and adjacent markets as opportunities come available.
Current report
General and administrative expenses for the quarter ended March 30, 2025 were $18.9 million compared to $18.5 million for the quarter ended March 31, 2024, an increase of $0.4 million or 2.0%. This increase was primarily driven by higher software license fees related to our enterprise resource planning ("ERP") and human capital management ("HCM") system implementations and advertising expenses driven by advertising campaigns in Dallas-Fort Worth and Phoenix markets, partially offset by lower equity-based compensation.
Current report
Net income attributable to equity method investment for both the first quarters ended March 30, 2025 and March 31, 2024 was $0.2 million.
Current report
Our effective interest rate was 7.02%as of March 30, 2025 and 8.37% as of March 31, 2024.
Current report
Income Tax Expense (Benefit)
Current report
(b) Excludes C&O.
Current report
On January 27, 2025, PHD Intermediate LLC, Portillo’s Holdings LLC, the other Guarantors party thereto, the Lenders from time to time party thereto and Fifth Third Bank, National Association, as Administrative Agent, the L/C Issuer and the Swing Line Lender entered into an amendment (the “Amendment”) to the 2023 Credit Agreement (as amended by the Amendment and as may be amended, restated, supplemented or otherwise modified from time to time thereafter, the “2025 Credit Agreement”).
Current report
The Amendment provides for, among other things, (i) a $250 million term loan A facility (the “2025 Term Loan”) and (ii) revolving credit commitments in an initial aggregate principal amount of $150 million (the “2025 Revolver Facility” and, together with the Term Loan Facility, the “2025 Facilities”), the proceeds of which will be used to refinance indebtedness under the 2023 Credit Agreement, for general corporate purposes and working capital needs and for other activities permitted under the 2025 Credit Agreement. The loans under each of the 2025 Facilities mature on January 27, 2030.
Current report
The 2025 Credit Agreement contains customary representations and warranties, events of default, reporting and other affirmative covenants and negative covenants, including limitations on indebtedness, liens, investments, negative pledges, dividends, junior financings and other fundamental changes. As of March 30, 2025, the Company was in compliance with financial covenants in the 2025 Credit Agreement.
Removed paragraphs (51)
Previous report
•Total revenue increased 6.9% or $11.4 million to $178.3 million;
Previous report
•Same restaurant sales* decreased 0.9%;
Previous report
•Operating income increased $0.9 million to $16.0 million;
Previous report
•Net income increased $2.2 million to $8.8 million;
Previous report
•Restaurant-Level Adjusted EBITDA** increased $0.1 million to $41.9 million; and
Previous report
•Adjusted EBITDA** increased $0.6 million to $27.9 million.
Previous report
Financial Highlights for the Three Quarters Ended September 29, 2024 vs. Three Quarters Ended September 24, 2023:
Previous report
•Total revenue increased 6.9% or $33.9 million to $525.9 million;
Previous report
•Same restaurant sales* decreased 0.9%;
Previous report
•Operating income increased $3.2 million to $44.2 million;
Previous report
•Net income increased $7.5 million to $22.6 million;
Previous report
•Restaurant-Level Adjusted EBITDA** increased $3.5 million to $122.9 million; and
Previous report
•Adjusted EBITDA** increased $3.4 million to $79.6 million.
Previous report
*For the quarter ended September 29, 2024, same-restaurant sales compares the 13 weeks from July 1, 2024 through September 29, 2024 to the 13 weeks from July 3, 2023 through October 1, 2023. For the three quarters ended September 29, 2024, same-restaurant sales compares the 39 weeks from January 1, 2024 through September 29, 2024 to the 39 weeks from January 2, 2023 through October 1, 2023.
Previous report
In the quarter and three quarters ended September 29, 2024, total revenue, operating income, net income, Restaurant-Level Adjusted EBITDA, and Adjusted EBITDA all improved versus the prior year. We believe this improvement stemmed from maintaining concentration on our four strategic pillars, which guide our short-term objectives and form the basis for long-term growth:
Previous report
•Running world class operations: In the third quarter, we continued to focus on enhancing our guest experience. We redirected our general managers' efforts toward the key factors that drive transactions and sales growth, placing renewed emphasis on training our Team Members to improve speed and cultivate a sense of urgency.
Previous report
•Innovating and amplifying the Portillo's experience: In the third quarter, we introduced self-service kiosks at select locations, enhancing guest convenience and providing an additional ordering channel. We also re-launched our advertising in the Chicagoland market, consisting of TV commercials, billboards, and more. Our comprehensive advertising campaign coincided with the start of the NFL season. In late August, we also launched our first new cake flavor in 20 years: the Salted Caramel Spice Cake.
Previous report
•Building restaurants with industry leading returns: We continued our progress on our Restaurant of the Future concept, a 6,200 square foot prototype restaurant. We will have two Texas restaurants with this footprint by the end of 2024.
Previous report
•Taking great care of our teams: In the third quarter, we hosted our annual General Manager Summit to motivate, inspire, and celebrate our team members.
Previous report
During the three quarters ended September 29, 2024, we opened four new restaurants. Subsequent to September 29, 2024, we opened one additional restaurant, bringing our total restaurant count to 89, as of the filing of this Quarterly Report on Form 10-Q, including a restaurant owned by C&O of which Portillo’s owns 50% of the equity. We plan to open five more restaurants, all in December, for a total of 10 new restaurants opened in the fiscal year 2024, including further expansion into the Houston and Dallas-Fort Worth markets in Texas.
Previous report
Below are the restaurants opened since the beginning of fiscal 2024:
Previous report
(1) We use a 52- or 53-week fiscal year ending on the Sunday on or prior to December 31. Fiscal 2024 consists of 52 weeks and fiscal 2023 consisted of 53 weeks. In order to compare like-for-like periods for the quarter ended September 29, 2024, same-restaurant sales compares the 13 weeks from July 1, 2024 through September 29, 2024 to the 13 weeks from July 3, 2023 through October 1, 2023.
Previous report
(2) Represents the impact from shifting comparable weeks for all periods in fiscal 2023 to compare like-for-like periods. For the quarter ended September 24, 2023, same-restaurant sales includes sales from the 13 weeks from July 3, 2023 through October 1, 2023 rather than the 13 weeks from June 26, 2023 through September 24, 2023.
Previous report
*nm - not meaningful
Previous report
Revenues for the three quarters ended September 29, 2024 were $525.9 million compared to $492.0 million for the three quarters ended September 24, 2023, an increase of $33.9 million or 6.9%. The increase in revenues was primarily attributed to the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base contributed $40.2 million of the total year-over-year increase. This increase in revenues was offset by a same-restaurant sales decrease of 0.9%, or $4.0 million. The same-restaurant sales decline was attributable to a 3.0% decrease in transactions, partially offset by an increase in average check of 2.1%. The higher average check was primarily driven by an approximate 4.6% increase in menu prices partially offset by product mix. To address inflationary cost pressures, we increased select menu prices by approximately 1.5% in January 2024 and again at the end of March 2024. In June 2024, we implemented a 1% price increase primarily by re-tiering some of our restaurants in higher-cost areas. Revenue was negatively impacted by $1.8 million in the third quarter due to the shifting of comparable weeks. For the purpose of calculating same-restaurant sales for the three quarters ended September 29, 2024, sales for 70 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.
Previous report
(1) We use a 52- or 53-week fiscal year ending on the Sunday on or prior to December 31. Fiscal 2024 consists of 52 weeks and fiscal 2023 consisted of 53 weeks. In order to compare like-for-like periods for the three quarters ended September 29, 2024, same-restaurant sales compares the 39 weeks from January 1, 2024 through September 29, 2024 to the 39 weeks from January 2, 2023 through October 1, 2023.
Previous report
(2) Represents the impact from shifting comparable weeks for all periods in fiscal 2023 to compare like-for-like periods. For the three quarters ended September 24, 2023, same-restaurant sales includes sales from the 39 weeks from January 2, 2023 through October 1, 2023 rather than the 39 weeks from December 26, 2022 through September 24, 2023.
Previous report
*nm - not meaningful
Previous report
Food, beverage and packaging costs for the three quarters ended September 29, 2024 was $178.8 million compared to $165.4 million for the three quarters ended September 24, 2023, an increase of $13.4 million or 8.1%. This increase was primarily driven by the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024 and a 5.1% increase in commodity prices, partially offset by lower third-party delivery commissions. As a percentage of revenues, net, food, beverage and packaging costs increased 0.4% during the three quarters ended September 29, 2024. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in average check and lower third-party delivery commissions.
Previous report
Labor expenses for the three quarters ended September 29, 2024 were $135.7 million compared to $126.2 million for the three quarters ended September 24, 2023, an increase of $9.5 million or 7.5%. This increase was primarily driven by the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024 and incremental investments to support our team members, partially offset by lower variable-based compensation. As a percentage of revenues, net, labor increased 0.2% primarily due to lower transactions and incremental wage rate investments, partially offset by an increase in our average check and lower variable-based compensation.
Previous report
Occupancy expenses for the three quarters ended September 29, 2024 were $27.7 million compared to $24.9 million for the three quarters ended September 24, 2023, an increase of $2.8 million or 11.3%, primarily driven by the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024. As a percentage of revenues, net, occupancy expenses increased 0.2%.
Previous report
Other operating expenses for the quarter ended September 29, 2024 were $21.1 million compared to $18.6 million for the quarter ended
Previous report
September 24, 2023, an increase of $2.5 million or 13.4%, primarily due to the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024, and an increase in repairs and maintenance, partially offset by a decrease in insurance expenses. As a percentage of revenues, net, operating expenses increased 0.7%.
Previous report
General and administrative expenses for the quarter ended September 29, 2024 were $18.3 million compared to $18.9 million for the quarter ended September 24, 2023, a decrease of $0.6 million or 3.1%. This decrease was primarily driven by lower variable-based and equity compensation, partially offset by an increase in advertising expenses and software license expenses related to our enterprise resource planning system ("ERP") implementation.
Previous report
General and administrative expenses for the three quarters ended September 29, 2024 were $54.8 million compared to $57.3 million for the three quarters ended September 24, 2023, a decrease of $2.5 million or 4.4%. This decrease was primarily driven by lower equity and variable-based compensation and insurance expenses, partially offset by an increase in advertising expenses, professional fees and software license fees related to our ERP implementation and travel.
Previous report
Pre-opening expenses for the three quarters ended September 29, 2024 were $5.3 million compared to $5.0 million for the three quarters ended September 24, 2023, an increase of $0.2 million or 4.8%. This increase was due to the number and timing of activities related to our planned restaurant openings for the three quarters ended September 29, 2024 as compared to the three quarters ended September 24, 2023.
Previous report
Depreciation and amortization expense for the three quarters ended September 29, 2024 was $20.7 million compared to $17.8 million for the three quarters ended September 24, 2023, an increase of $2.9 million or 16.5%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024.
Previous report
Net income attributable to equity method investment was $0.4 million for both the quarter ended September 29, 2024 and September 24, 2023.
Previous report
Net income attributable to equity method investment for the three quarters ended September 29, 2024 was $0.9 million compared to $1.0 million for the three quarters ended September 24, 2023, a decrease of $0.1 million or 8.6%. This decrease was primarily driven by an increase in restaurant-level operating expenses, partially offset by an increase in sales.
Previous report
Other income, net, for the three quarters ended September 29, 2024 was $1.2 million compared to $0.6 million for the three quarters ended September 24, 2023, an increase of $0.5 million or 86.7%. This increase was primarily due to a decrease in loss on sale of assets and higher trading gains in the rabbi trust used to fund our deferred compensation plan.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Reworded paragraphs (31)
Previous wording
Portillo’s serves iconic Chicago street food through high-energy, multichannel restaurants designed to ignite the senses and create a memorable dining experience. Since our founding in 1963 in a small trailer which Dick Portillo called “The Dog House,” we have grown to become a treasured brand with a passionate (some might say obsessed) nationwide following. Our diverse menu features all-American favorites such as Chicago-style hot dogs and sausages, Italian beef sandwiches, char-broiled burgers, chopped salads, crinkle-cut fries, homemade chocolate cake and our signature chocolate cake shake. We create a consumer experience like no other by combining the best attributes of fast casual and quick service concepts with an exciting, energy-filled atmosphere and restaurant model capable of generating tremendous volumes. Nearly all of our restaurants were built with double lane drive-thrus and have been thoughtfully designed with a layout that accommodates a variety of access modes including dine-in, carryout, delivery, and catering in order to quickly and efficiently serve our guests. No matter how our guests order from us, our highly productive kitchens and team members consistently serve high quality food and deliver a memorable guest experience. We believe the combination of our craveable food, multichannel sales model, dedication to operational excellence, and distinctive culture driven by our team members gives us a competitive advantage.
Current wording
Portillo’s serves iconic Chicago street food in high-energy, multichannel restaurants designed to ignite the senses and create memorable dining experiences. Since our founding in 1963 in a small trailer that Dick Portillo called “The Dog House,” we have grown to become a treasured brand with a passionate (some might say obsessed) nationwide following. Our diverse menu features all-American favorites such as Chicago-style hot dogs and sausages, Italian beef sandwiches, char-broiled burgers, fresh chopped salads, crinkle-cut fries, homemade chocolate cake and our signature chocolate cake shake. We create a consumer experience like no other by combining the best attributes of fast-casual and quick-service concepts with an exciting energy-filled atmosphere in a restaurant model capable of generating tremendous volumes. Nearly all of our restaurants were built with double lane drive-thrus and have been thoughtfully designed with a layout that accommodates a variety of access modes including dine-in, carryout, delivery and catering to quickly and efficiently serve our guests. We believe the combination of our craveable food, multichannel sales model, dedication to operational excellence, and distinctive team member-driven culture gives us a competitive advantage.
Previous wording
As of September 29, 2024, we owned and operated 88 Portillo’s restaurants across ten states, including a restaurant owned by C&O Chicago, L.L.C. ("C&O") of which Portillo’s owns 50% of the equity.
Current wording
As of March 30, 2025, we owned and operated 94 Portillo’s restaurants across ten states, including a restaurant owned by C&O Chicago, L.L.C. ("C&O") of which Portillo’s owns 50% of the equity.
Previous wording
In the quarter and three quarters ended September 29, 2024, total revenue grew 6.9% or $11.4 million and 6.9% or $33.9 million, respectively, primarily due to new restaurant openings in 2023 and 2024. Same-restaurant sales declined 0.9% during the quarter ended September 29, 2024, compared to 3.9% same-restaurant sales growth during the same quarter in 2023. Same-restaurant sales declined 0.9% during the three quarters ended September 29, 2024, compared to 6.1% same-restaurant sales growth during the three quarters ended September 24, 2023. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.
Current wording
In the quarter ended March 30, 2025, total revenue grew 6.4% or $10.6 million primarily due to new restaurant openings in 2024 and an increase in same-restaurant sales. Same-restaurant sales increased 1.8% during the quarter ended March 30, 2025, compared to a 1.2% same-restaurant sales decline during the quarter ended March 31, 2024. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.
Previous wording
In the quarter and three quarters ended September 29, 2024, commodity inflation was 3.6% and 5.1%, respectively, compared to 3.5% and 5.8% for the quarter and three quarters ended September 24, 2023, respectively. Labor, as a percentage of revenue, net increased 0.3% and 0.2% during the quarter and three quarters ended September 29, 2024, respectively, compared to the quarter and three quarters ended September 24, 2023, primarily due to lower transactions and incremental wage rate increases, partially offset by an increase in our average check. For the full year 2024, we expect to achieve negative comparable sales of approximately 1.0% and restaurant-level margins between 23% and 24%.
Current wording
In the quarter ended March 30, 2025, commodity inflation was 3.4%, compared to 4.8% for the quarter ended March 31, 2024. Labor, as a percentage of revenue, net increased 0.5% during the quarter ended March 30, 2025, compared to the quarter ended March 31, 2024, primarily due to lower transactions, an increase in benefit expenses, and incremental wage rate increases, partially offset by an increase in our average check and labor efficiencies. We increased certain menu prices by approximately 1.5% during January of 2025 and by approximately 1.0% in April 2025. We will continue to prioritize strategies to drive higher traffic and mix at our restaurants while optimizing returns and retaining our top talent.
Previous wording
The following table summarizes our results of operations for the quarter and three quarters ended September 29, 2024 and September 24, 2023 (in thousands):
Current wording
The following table summarizes our results of operations for the quarter ended March 30, 2025 and March 31, 2024 (in thousands):
Previous wording
Revenues for the quarter ended September 29, 2024 were $178.3 million compared to $166.8 million for the quarter ended September 24, 2023, an increase of $11.4 million or 6.9%. The increase in revenues was primarily attributed to the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base contributed $13.6 million of the total year-over-year increase. This increase in revenues was offset by a same-restaurant sales decrease of 0.9%, or $1.4 million in the quarter. The same-restaurant sales decline was attributable to a 3.5% decrease in transactions, partially offset by an increase in average check of 2.6%. The higher average check was driven by an approximate 4.4% increase in certain menu prices partially offset by product mix. To address inflationary cost pressures, we increased select menu prices by approximately 1.5% in January 2024 and again at the end of March 2024. In June 2024, we implemented a 1% price increase primarily by re-tiering some of our restaurants in higher-cost areas. Revenue was negatively impacted by $1.0 million in the third quarter due to the shifting of comparable weeks. For the purpose of calculating same-restaurant sales for the quarter ended September 29, 2024, sales for 70 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base (as defined in "Selected Operating Data" below).
Current wording
Revenues for the quarter ended March 30, 2025 were $176.4 million compared to $165.8 million for the quarter ended March 31, 2024, an increase of $10.6 million or 6.4%. The increase in revenues was primarily attributed to the opening of ten restaurants in 2024 and an increase in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined in "Selected Operating Data" below) contributed $7.9 million of the total year-over-year increase. Same-restaurant sales increased 1.8%, or $2.6 million in the quarter. The same-restaurant sales increase was attributable to an increase in average check of 4.9%, partially offset by a 3.1% decrease in transactions. The higher average check was driven by an approximate 4.4% increase in certain menu prices and a 0.5% increase in product mix. To address inflationary cost pressures, we increased select menu prices by approximately 1.5% in January 2025 and by approximately 1.0% in April 2025. For the purpose of calculating same-restaurant sales for the quarter ended March 30, 2025, sales for 74 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.
Previous wording
Food, beverage and packaging costs include the direct costs associated with food and beverages, including paper products and third-party delivery commissions. The components of food, beverage and packaging costs are variable by nature, change with sales volume, are impacted by product mix and are subject to increases or decreases in commodity costs.
Current wording
Food, beverage and packaging costs include the direct costs associated with food and beverages, including paper products and third-party delivery commissions. The components of food, beverage and packaging costs are variable by nature, change with sales volume, are impacted by product mix and are subject to increases or decreases in commodity costs, as well as geographic scale and proximity.
Previous wording
Food, beverage and packaging costs for the quarter ended September 29, 2024 were $60.1 million compared to $55.6 million for the quarter ended September 24, 2023, an increase of $4.6 million or 8.3%. This increase was primarily driven by the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024 and a 3.6% increase in commodity prices. As a percentage of revenues, net, food, beverage and packaging costs increased 0.4% during the quarter ended September 29, 2024. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in average check.
Current wording
Food, beverage and packaging costs for the quarter ended March 30, 2025 were $61.1 million compared to $57.0 million for the quarter ended March 31, 2024, an increase of $4.1 million or 7.3%. This increase was primarily driven by the opening of ten restaurants in 2024 and a 3.4% increase in commodity prices. As a percentage of revenues, net, food, beverage and packaging costs increased 0.3% during the quarter ended March 30, 2025. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in average check.
Previous wording
Labor expenses for the quarter ended September 29, 2024 were $45.9 million compared to $42.6 million for the quarter ended September 24, 2023, an increase of $3.4 million or 7.9%. This increase was primarily driven by the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024 and incremental investments to support our team members, partially offset by lower variable-based compensation. As a percentage of revenues, net, labor increased 0.3% primarily due to lower transactions, incremental wage rate investments and an increase in benefit expenses, partially offset by an increase in our average check.
Current wording
Labor expenses for the quarter ended March 30, 2025 were $46.9 million compared to $43.3 million for the quarter ended March 31, 2024, an increase of $3.6 million or 8.2%. This increase was primarily driven by the opening of ten restaurants in 2024 and incremental investments to support our team members. As a percentage of revenues, net, labor increased 0.5% primarily due to lower transactions, an increase in benefit expenses, and incremental wage rate increases, partially offset by an increase in our average check and labor efficiencies.
Previous wording
Occupancy expenses primarily consist of rent, property insurance and property taxes.
Current wording
Occupancy expenses primarily consist of rent, property insurance and property taxes, and exclude occupancy expenses associated with unopened restaurants, which are recorded separately in pre-opening expenses.
Previous wording
Occupancy expenses for the quarter ended September 29, 2024 were $9.2 million compared to $8.2 million for the quarter ended September 24, 2023, an increase of $1.0 million or 11.7%, primarily driven by the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024. As a percentage of revenues, net, occupancy expenses increased 0.2%.
Current wording
Occupancy expenses for the quarter ended March 30, 2025 were $10.0 million compared to $9.3 million for the quarter ended March 31, 2024, an increase of $0.7 million or 7.3%, primarily driven by the opening of ten restaurants in 2024. As a percentage of revenues, net, occupancy expenses increased 0.1%.
Previous wording
Other operating expenses for the three quarters ended September 29, 2024 were $60.9 million compared to $56.1 million for the three quarters ended September 24, 2023, an increase of $4.8 million or 8.5%, primarily due to the opening of twelve restaurants in 2023 and four restaurants during the three quarters ended September 29, 2024, and an increase in repairs and maintenance and credit card fees, partially offset by a decrease in operating supplies, and other miscellaneous expenses. As a percentage of revenues, net, operating expenses increased 0.2%.
Current wording
Other operating expenses for the quarter ended March 30, 2025 were $21.8 million compared to $19.9 million for the quarter ended March 31, 2024, an increase of $1.9 million or 9.7%, primarily due to the opening of ten restaurants in 2024, and an increase in repairs and maintenance and utilities, partially offset by lower cleaning expenses due to vendor renegotiation. As a percentage of revenues, net, operating expenses increased 0.4%.
Previous wording
Pre-opening expenses for the quarter ended September 29, 2024 were $1.7 million compared to $2.4 million for the quarter ended September 24, 2023, an decrease of $0.7 million or 27.5%. The decrease was due to the number and timing of activities related to our planned restaurant openings for the quarter ended September 29, 2024 as compared to the quarter ended September 24, 2023.
Current wording
Pre-opening expenses for the quarter ended March 30, 2025 were $0.5 million compared to $1.4 million for the quarter ended March 31, 2024, a decrease of $0.9 million or 64.3%. The decrease was due to the number and timing of activities related to our planned restaurant openings for the quarter ended March 30, 2025 as compared to the quarter ended March 31, 2024.
Previous wording
Depreciation and amortization expenses consist of the depreciation of fixed assets, including leasehold improvements, fixtures and equipment and the amortization of definite-lived intangible assets, which are primarily comprised of recipes.
Current wording
Depreciation and amortization expenses consist of the depreciation of fixed assets, including land improvements, buildings and improvements, fixtures and equipment, leasehold improvements, and the amortization of definite-lived intangible assets, which are primarily comprised of recipes.
Previous wording
Depreciation and amortization expense for the quarter ended September 29, 2024 was $6.7 million compared to $6.2 million for the quarter ended September 24, 2023, an increase of $0.5 million or 8.1%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of eight restaurants in the third and fourth quarters of 2023 and four restaurants during the three quarters ended September 29, 2024.
Current wording
Depreciation and amortization expense for the quarter ended March 30, 2025 was $7.0 million compared to $6.9 million for the quarter ended March 31, 2024, an increase of $0.1 million or 1.4%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of ten restaurants in 2024.
Previous wording
Other income, net, for the quarter ended September 29, 2024 was $0.4 million compared to $0.3 million for the quarter ended September 24, 2023, an increase of $0.1 million or 41.3%. This increase was primarily due to higher trading gains in the rabbi trust used to fund our deferred compensation plan.
Current wording
Other income, net, for the quarter ended March 30, 2025 was $0.01 million compared to $0.4 million for the quarter ended March 31, 2024, a decrease of $0.4 million or 97.2%. This decrease was primarily driven by an increase in trading losses in the rabbi trust used to fund our deferred compensation plan and reduced sales tax filing discounts due to the new statutory cap implemented in Illinois on January 1, 2025.
Previous wording
Interest expense for the three quarters ended September 29, 2024 was $19.6 million compared to $20.5 million for the three quarters ended September 24, 2023, a decrease of $1.0 million or 4.7%. This decrease was primarily driven by a lower effective interest rate and the improved lending terms associated with our 2023 Term Loan and 2023 Revolver Facility.
Current wording
Interest expense for the quarter ended March 30, 2025 was $5.7 million compared to $6.5 million for the quarter ended March 31, 2024, a decrease of $0.8 million or 12.0%. This decrease was primarily driven by a lower effective interest rate attributable to the improved lending terms associated with our 2025 Credit Agreement amendment, partially offset by additional borrowings on the revolver facility.
Previous wording
We are party to a Tax Receivable Agreement liability with certain members of PHD Group Holdings LLC and its subsidiaries ("Portillo's OpCo”) that provides for the payment by us of 85% of the amount of tax benefits, if any, that Portillo's Inc. actually realizes or in some cases is deemed to realize as a result of certain transactions.
Current wording
We are party to a Tax Receivable Agreement liability with certain members of PHD Group Holdings LLC and its subsidiaries ("Portillo's OpCo”) that provides for the payment by us of 85% of the amount of tax benefits, if any, that Portillo's Inc. actually realizes or in some cases is deemed to realize as a result of certain transactions. On January 24, 2025, we entered into an Amendment to the Tax Receivable Agreement (the "Amendment") with Portillo's OpCo and the TRA Party Representative, as defined in the agreement. The Amendment replaces the LIBOR based interest rate with a Term Secured Overnight Financing Rate ("SOFR") based rate.
Previous wording
The Tax Receivable Agreement liability adjustment was $1.7 million for the quarter ended September 29, 2024 and $2.7 million for the three quarters ended September 29, 2024 related to a remeasurement primarily due to activity under equity-based compensation plans. The Tax Receivable Agreement liability adjustment was $0.5 million and $1.7 million for the quarter and three quarters ended September 24, 2023, respectively.
Current wording
The Tax Receivable Agreement liability adjustment was $0.6 million for both the quarters ended March 30, 2025 and March 31, 2024 related to a remeasurement primarily due to activity under equity-based compensation plans.
Previous wording
Income tax expense for the three quarters ended September 29, 2024 was $4.9 million compared to income tax expense of $3.6 million for the three quarters ended September 24, 2023, an increase of $1.3 million or 35.9%. Our effective income tax rate for the three quarters ended September 29, 2024 was 17.8%, compared to 19.2% for the three quarters ended September 24, 2023. The decrease in our effective income tax rate for the three quarters ended September 29, 2024 compared to the three quarters ended September 24, 2023 was primarily driven by a decrease in the valuation allowance recorded against a portion of the Company's deferred tax assets as a result of the secondary offering in Q1 2024 and return to provision adjustments, partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income (loss) of Portillo's OpCo.
Current wording
Income tax expense for the quarter ended March 30, 2025 was $1.4 million compared to a benefit of $1.1 million for the quarter ended March 31, 2024, an increase of $2.5 million or 219.6%. Our effective income tax rate for the quarter ended March 30, 2025 was 25.4%, compared to (27.0)% for the quarter ended March 31, 2024. The increase in our effective income tax rate for the quarter ended March 30, 2025 compared to the quarter ended March 31, 2024 was primarily driven by lapping of prior year's reduction in the valuation allowance as a result of the Q1 2024 Secondary Offering.
Previous wording
Net income attributable to non-controlling interests for the quarter ended September 29, 2024 was $1.6 million, compared to net income attributable to non-controlling interests of $2.2 million for the quarter ended September 24, 2023, a decrease of $0.6 million or 28.9%. The decrease in net income attributable to non-controlling interests for the quarter ended September 29, 2024 was primarily due to a decrease in the non-controlling interest holders' weighted average ownership from 24.1% for the quarter ended September 24, 2023 to 15.8% for the quarter ended September 29, 2024, partially offset by an increase in net income for the quarter ended September 29, 2024 compared to the quarter ended September 24, 2023.
Current wording
Net income attributable to non-controlling interests for the quarter ended March 30, 2025 was $0.7 million, compared to net income attributable to non-controlling interests of $0.8 million for the quarter ended March 31, 2024, a decrease of $0.1 million or 13.4%. The decrease in net income attributable to non-controlling interests for the quarter ended March 30, 2025 was primarily due to a decrease in the non-controlling interest holders' weighted average ownership from 21.4% for the quarter ended March 31, 2024 to 14.4% for the quarter ended March 30, 2025, and a decrease in net income for the quarter ended March 30, 2025 compared to the quarter ended March 31, 2024.
Previous wording
The change in same-restaurant sales is the percentage change in year-over-year revenue (excluding gift card breakage) for the comparable restaurant base, which is defined as the number of restaurants open for at least 24 full fiscal periods (the “Comparable Restaurant Base”). For the three quarters ended September 29, 2024 and September 24, 2023, there were 70 and 66 restaurants in our Comparable Restaurant Base, respectively. The Comparable Restaurant Base excludes a restaurant that is owned by C&O, of which Portillo’s owns 50% of the equity.
Current wording
The change in same-restaurant sales is the percentage change in year-over-year revenue (excluding gift card breakage) for the comparable restaurant base, which is defined as the number of restaurants open for at least 24 full fiscal periods (the “Comparable Restaurant Base”). For the quarter ended March 30, 2025 and March 31, 2024, there were 74 and 69 restaurants in our Comparable Restaurant Base, respectively. The Comparable Restaurant Base excludes C&O.
Previous wording
(2) Represents non-capitalized third party consulting and software licensing costs incurred in connection with the implementation of new enterprise resource planning ("ERP") and human capital management ("HCM") systems which are included within general and administrative expenses.
Current wording
(2) Represents non-capitalized third party consulting and software licensing costs incurred in connection with the implementation of a new ERP and HCM systems which are included within general and administrative expenses.
Previous wording
(4) Represents (gain) loss on disposal of property and equipment included within other income, net.
Current wording
(4) Represents loss on disposal of property and equipment included within other income, net.
Previous wording
Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our 2023 Revolver Facility. As of September 29, 2024, we maintained a cash and cash equivalents and restricted cash balance of $18.5 million and had $80.7 million of availability under our 2023 Revolver Facility, after giving effect to $5.3 million in outstanding letters of credit.
Current wording
Our primary sources of liquidity are cash from operations, cash and cash equivalents on hand, and availability under our 2025 Revolver Facility. As of March 30, 2025, we maintained a cash and cash equivalents and restricted cash balance of $12.9 million and had $71.7 million of availability under our 2025 Revolver Facility, after giving effect to $5.3 million in outstanding letters of credit.
Previous wording
As of September 29, 2024, we estimate that our obligation for future payments under the TRA totaled $326.7 million. Amounts payable under the TRA are contingent upon, among other things, (i) generation of future taxable income over the term of the TRA and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we would not be required to make the related TRA payments. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us, but we expect the cash tax savings we will realize to fund the required payments. Assuming no material changes in relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we estimate that the tax savings associated with all tax attributes described above would aggregate to approximately $384.3 million as of September 29, 2024. Under this scenario, we would be required to pay the TRA Parties approximately 85% of such amount, or $326.7 million, primarily over the next 15 years, substantially declining in year 16 through year 47. In the three quarters ended September 29, 2024 and
Current wording
As of March 30, 2025, we estimate that our obligation for future payments under the TRA totaled $316.2 million. Amounts payable under the TRA are contingent upon, among other things, (i) generation of future taxable income over the term of the TRA and (ii) future changes in tax laws. If we do not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then we would not be required to make the related TRA payments. The payments that we are required to make will generally reduce the amount of overall cash flow that might have otherwise been available to us, but we expect the cash tax savings we will realize to fund the required payments. Assuming no material changes in relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we estimate that the tax savings associated with all tax attributes described above would aggregate to approximately $372.1 million as of March 30, 2025. Under this scenario, we would be required to pay the TRA Parties approximately 85% of such amount, or $316.2 million, primarily over the next 15 years, substantially declining in year 16 through year 47. In the quarter ended March 30, 2025 and March 31, 2024, we made TRA payments of $7.7 million relating to tax year 2023 and $4.4 million relating to tax year 2022, respectively. We expect a payment of $9.0 million relating to tax year 2024 to be paid within the next 12 months.
Previous wording
Net cash provided by operating activities for the three quarters ended September 29, 2024 was $72.0 million compared to net cash provided by operating activities of $53.6 million for the three quarters ended September 24, 2023, an increase of $18.4 million or 34.3%. This increase was primarily driven by the change in operating assets and liabilities of $14.6 million and an increase in net income of $7.5 million, partially offset by the change in non-cash items of $3.7 million.
Current wording
Net cash provided by operating activities for the quarter ended March 30, 2025 was $9.5 million compared to net cash provided by operating activities of $9.1 million for the quarter ended March 31, 2024, an increase of $0.4 million or 4.1%. This increase was primarily driven by the change in non-cash items of $1.6 million and operating assets and liabilities of $0.1 million, partially offset by a decrease in net income of $1.4 million.
Previous wording
The $14.6 million change in our operating assets and liabilities balances was primarily driven by operating assets and liabilities being a source of net cash of $17.1 million in the three quarters ended September 29, 2024, compared to a source of net cash of $2.6 million in three quarters ended September 24, 2023 driven by the change in accounts payable, deferred lease incentives, other current assets, and accounts receivable in the three quarters ended September 29, 2024. The increase in net income for the three quarters ended September 29, 2024 was primarily due to the factors driving the aforementioned change in revenues and expenses as described in the condensed consolidated results of operations in the three quarters ended September 29, 2024 compared to the three quarters ended September 24, 2023. The $3.7 million change from the three quarters ended September 29, 2024 in non-cash charges is primarily driven by the loss on debt extinguishment in the prior year, lower equity-based compensation expense, and lower income tax expense, partially offset by higher depreciation and amortization in the current year.
Current wording
The $1.6 million change from the quarter ended March 30, 2025 in non-cash charges is primarily driven by an increase in our deferred income tax expense, partially offset by lower equity-based compensation expense. The $0.1 million change in our operating assets and liabilities balances was primarily driven by operating assets and liabilities being a use of net cash of $4.2 million in the quarter ended March 30, 2025, compared to a use of net cash of $4.3 million in quarter ended March 31, 2024 driven by the change in accounts payable, accrued expenses and other liabilities, other current assets, and inventory in the quarter ended March 30, 2025. The decrease in net income for the quarter ended March 30, 2025 was primarily due to the factors driving the aforementioned change in revenues and expenses as described in the condensed consolidated results of operations in the quarter ended March 30, 2025 compared to the quarter ended March 31, 2024.
Previous wording
Net cash used in investing activities was $56.4 million for the three quarters ended September 29, 2024 compared to $57.6 million for the three quarters ended September 24, 2023, a decrease of $1.1 million or 2.0%. This decrease was primarily due to adopting a more cost effective restaurant format, number and timing of restaurant openings, and buildings in process during the three quarters ended September 29, 2024 compared to the three quarters ended September 24, 2023.
Current wording
Net cash used in investing activities was $19.0 million for the quarter ended March 30, 2025 compared to $16.9 million for the quarter ended March 31, 2024, an increase of $2.1 million or 12.4%. This increase was primarily due to due to the number of builds in process and planned restaurant openings in 2025, partially offset by adopting a more cost effective restaurant format.
Previous wording
Net cash used in financing activities was $7.4 million for the three quarters ended September 29, 2024 compared to net cash used in financing activities of $27.5 million for the three quarters ended September 24, 2023, a decrease of $20.0 million or 72.9%. This decrease is primarily due to the payment and borrowing of long-term debt in connection with our refinancing during the three quarters ended September 24, 2023, as described in Note 8. Debt. The decrease was partially offset by an increase in payments related to the Tax Receivable Agreement liability of 3.6 million for the three quarters ended September 29, 2024 as compared to the three quarters ended September 24, 2023.
Current wording
Net cash used in financing activities was $0.4 million for the quarter ended March 30, 2025 compared to net cash provided by financing activities of $10.6 million for the quarter ended March 31, 2024, a decrease of $11.0 million or 103.3%. This decrease is primarily due to the payment and borrowing of long-term debt in connection with our refinancing during the quarter ended March 30, 2025, as described in Note 8. Debt, and an increase of $3.3 million in payments related to the Tax Receivable Agreement liability for the quarter ended March 30, 2025 as compared to the quarter ended March 31, 2024.
Previous wording
As of September 29, 2024, we had $14.0 million of borrowings under the 2023 Revolver Facility, and letters of credit issued under the 2023 Revolver Facility totaled $5.3 million. As a result, as of September 29, 2024, the Company had $80.7 million available under the 2023 Revolver Facility.
Current wording
As of March 30, 2025, we had $73.0 million of borrowings under the 2025 Revolver Facility, and letters of credit issued under the 2025 Revolver Facility totaled $5.3 million. As a result, as of March 30, 2025, the Company had $71.7 million available under the 2025 Revolver Facility.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(c) For the quarter ended March 31, 2024, same-restaurant sales compares the 13 weeks from January 1, 2024 through March 31, 2024 to the 13 weeks from January 2, 2023 through April 2, 2023.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The following table summarizes the Company's revenue for the three quarters ended September 29, 2024 and September 24, 2023 (in thousands):
Previous report — wording carried elsewhere
(3) Total restaurants indicated are as of September 29, 2024. Excludes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity.
Previous report — wording carried elsewhere
(4) Includes revenue from direct shipping sales and non-traditional locations.
Previous report — wording carried elsewhere
(b) Excludes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity.
Previous report — wording carried elsewhere
September 24, 2023, we made TRA payments of $4.4 million relating to tax year 2022 and $0.8 million relating to tax year 2021, respectively. We expect a payment of $7.7 million relating to tax year 2023 to be paid within the next 12 months.