Portillo's Inc.
For the period ended Jun 28, 2026. Filed Aug 5, 2026.
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.
Jun 28, 2026 · Filed Aug 5, 2026
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 2026-03-29; filed 2026-05-05.
0001871509-26-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-28; filed 2026-08-05.
0001871509-26-000056
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 137 previous paragraphs and 161 current paragraphs.
81 unchanged; 39 reworded; 36 added; 17 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 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 (36)
Current report
•Same-restaurant sales decrease of 1.2%
Current report
•Operating income of $13.8 million, a decrease of $3.8 million
Current report
•Net income of $7.2 million, a decrease of $2.9 million
Current report
•Restaurant-Level Adjusted EBITDA* of $43.2 million, a decrease of $1.2 million
Current report
•Adjusted EBITDA* of $29.8 million, a decrease of $0.2 million
Current report
Financial Highlights for the Two Quarters Ended June 28, 2026 vs. Two Quarters Ended June 29, 2025:
Current report
•Total revenue of $381.6 million, an increase of 4.6% or $16.7 million
Current report
•Same-restaurant sales decrease of 0.7%
Current report
•Operating income of $18.3 million, a decrease of $9.6 million
Current report
•Net income of $6.6 million, a decrease of $7.4 million
Current report
•Restaurant-Level Adjusted EBITDA* of $78.1 million, a decrease of $3.0 million
Current report
•Adjusted EBITDA* of $48.3 million, a decrease of $3.0 million
Current report
From a development perspective, the Company opened its first airport location in Dallas-Fort Worth International Airport (DFW) during the quarter, utilizing a smaller-format kitchen and equipment enhancements. The Company also announced plans to expand within its home market of Chicago, including the opening of its first in-line restaurant in downtown Chicago later in 2026 and its first Wrigleyville location in 2027.
Current report
In addition, the Company commenced a project-based spend optimization initiative. Also, our previously announced assessment of our brand strategy and market positioning remains ongoing. The Company expects the results of these initiatives to help inform future operational and investment decisions. Subsequent to the quarter-end, the Company implemented a reduction in force affecting employees at its corporate headquarters and a limited number of field management roles. See "Restructuring Plan" in Part II Item 5. Other Information.
Current report
*nm - not meaningful
Current report
Revenues for the two quarters ended June 28, 2026 were $381.6 million compared to $364.9 million for the two quarters ended June 29, 2025, an increase of $16.7 million or 4.6%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base contributed $21.0 million of the total year-over-year increase. This increase in revenues was offset by a same-restaurant sales decrease of 0.7%, or $2.4 million. The same-restaurant sales decline was attributable to a 1.4% decrease in transactions, partially offset by an increase in average check of 0.7%. The increase in average check was driven by an approximate 1.4% increase in certain menu prices, partially offset by a 0.7% decrease in product mix. To address inflationary cost pressures, we increased select menu prices by approximately 2.0% in April 2026. For the purpose of calculating same-restaurant sales for the two quarters ended June 28, 2026, sales for 85 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.
Current report
*nm - not meaningful
Current report
Food, beverage and packaging costs for the two quarters ended June 28, 2026 was $132.9 million compared to $124.9 million for the two quarters ended June 29, 2025, an increase of $8.0 million or 6.4%. This increase was primarily driven by a 4.5% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026. As a percentage of revenues, net, food, beverage and packaging costs increased 0.6% during the two quarters ended June 28, 2026. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in average check.
Current report
Labor expenses for the quarter ended June 28, 2026 were $51.1 million compared to $48.3 million for the quarter ended June 29, 2025, an increase of $2.8 million or 5.7%. This increase was primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026, and incremental investments to support our team members. As a percentage of revenues, net, labor was flat during the quarter ended June 28, 2026.
Current report
Occupancy expenses for the two quarters ended June 28, 2026 were $22.9 million compared to $20.0 million for the two quarters ended June 29, 2025, an increase of $2.9 million or 14.5%, primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026. As a percentage of revenues, net, occupancy expenses increased 0.5% primarily driven by higher occupancy costs and revenue deleverage at new restaurants.
Current report
Other operating expenses for the quarter ended June 28, 2026 were $23.3 million compared to $21.9 million for the quarter ended June 29, 2025, an increase of $1.4 million or 6.5%, primarily due to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026, partially offset by lower utilities and insurance costs. As a percentage of revenues, net, other operating expenses increased 0.1% primarily due to revenue deleverage at new restaurants.
Current report
General and administrative expenses for the quarter ended June 28, 2026 were $19.6 million compared to $18.8 million for the quarter ended June 29, 2025, an increase of $0.8 million or 4.1%. This increase was primarily driven by higher professional fees, including $0.9 million of dead site costs, and increased software licensing fees. These increases were partially offset by lower legal expenses.
Current report
General and administrative expenses for the two quarters ended June 28, 2026 were $39.9 million compared to $37.7 million for the two quarters ended June 29, 2025, an increase of $2.2 million or 5.9%. This increase was primarily driven by higher professional fees, including $1.4 million of dead site costs, increased equity-based compensation expense, and higher advertising expense associated with the Company's assessment of our brand strategy and market positioning. These increases were partially offset by lower legal fees and reduced vacation-related wage expenses.
Current report
Depreciation and amortization expense for the two quarters ended June 28, 2026 was $16.2 million compared to $14.2 million for the two quarters ended June 29, 2025, an increase of $2.0 million or 14.2%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026.
Current report
Net income attributable to equity method investment for the two quarters ended June 28, 2026 was $0.6 million compared to $0.5 million for the two quarters ended June 29, 2025, an increase of $0.1 million or 11.7%. This increase was primarily driven by increased sales and labor efficiencies.
Current report
Other Loss (Income), Net
Current report
Other loss (income), net for the two quarters ended June 28, 2026 was a loss of $0.8 million compared to income of $0.3 million for the two quarters ended June 29, 2025, a decrease of $1.1 million. This decrease was primarily attributable to a legal contingency of $1.7 million as discussed in Note 13. Contingencies, and was partially offset by insurance proceeds.
Current report
Interest expense for both the quarters ended June 28, 2026 and June 29, 2025 was $5.7 million.
Current report
Interest income for the two quarters ended June 28, 2026 was $0.1 million compared to $0.2 million for the two quarters ended June 29, 2025, a decrease of $0.04 million or 26.7% .
Current report
The Tax Receivable Agreement liability adjustment was $1.2 million for the two quarters ended June 28, 2026 and $2.5 million for the two quarters ended June 28, 2026 related to a remeasurement primarily due to activity under equity-based compensation plans.
Current report
Income Tax Expense
Current report
We also consolidate AP Dogs, LLC, which operates our restaurant at Dallas-Fort Worth International Airport, and recognize a non-controlling interest representing the ownership interest held by our joint venture partner. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to Portillo's Inc. and the non-controlling interest holders.
Current report
Net income attributable to non-controlling interests for the two quarters ended June 28, 2026 was $0.1 million, compared to net income attributable to non-controlling interest of $2.0 million for the two quarters ended June 29, 2025, a decrease of $1.9 million or 94.8%. The decrease in net income attributable to non-controlling interests for the two quarters ended June 28, 2026 was primarily due to a decrease in the pre-IPO LLC Members non-controlling interest holders' weighted average ownership to 4.5% for the two quarters ended June 28, 2026 from 12.2% for the two quarters ended June 29, 2025 and a decrease in net income for the two quarters ended June 28, 2026.
Current report
(5) Represents certain expenses that management believes are not indicative of ongoing operations, consisting primarily of certain professional fees included within general and administrative expenses.
Current report
(6) Represents a legal contingency recorded in connection with the Maverick arbitration as discussed in Note 13. Contingencies, included within other loss (income), net.
Current report
(8) Represents fees incurred for discrete, project-based strategic initiatives that are not part of the Company's ongoing operations and are included within general and administrative expense. These costs consist primarily of third-party consulting fees related to a brand study and a spend optimization study. Given the magnitude and scope of these initiatives and that they are not expected to recur in the foreseeable future, the Company considers the associated consulting fees not reflective of the ongoing costs to operate its business.
Removed paragraphs (17)
Previous report
•Same-restaurant sales decrease of -0.1%
Previous report
•Operating income of $4.5 million, a decrease of $5.9 million
Previous report
•Net loss of $0.5 million, a decrease of $4.5 million from net income of $4.0 million
Previous report
•Restaurant-Level Adjusted EBITDA* of $34.8 million, a decrease of $1.8 million
Previous report
•Adjusted EBITDA* of $18.5 million, a decrease of $2.8 million
Previous report
We have announced the following leadership and governance changes:
Previous report
•Brett Patterson was appointed President and Chief Executive Officer, effective February 23, 2026, and as principal executive officer effective February 25, 2026.
Previous report
•Eugene I. Lee, Jr. was appointed Chair of the Board of Directors, effective March 10, 2026.
Previous report
•Jennifer Pecoraro‑Striepling was appointed Chief Development Officer, effective March 16, 2026.
Previous report
Additionally, during the first quarter of 2026, we introduced select permanent and limited time menu enhancements, intended to support guest engagement and increase attachment, consistent with our ongoing focus on menu innovation.
Previous report
We will concentrate our strategic priorities on three key areas: operational excellence across all channels; a more integrated and targeted marketing approach; and a disciplined development strategy. These priorities support our commitment to improving transactions and Restaurant-Level Adjusted EBITDA, positive free cash flow and delivering long-term shareholder value.
Previous report
During April, we have experienced negative same-restaurant sales trends, driven primarily by negative transaction and mix trends as we are lapping the benefit of our breakfast pilot from the prior year. We expect to have continued headwinds in May as we will be lapping our buy-one-get-one beef promotion from the prior year.
Previous report
Other operating expenses for the quarter ended March 29, 2026 were $24.1 million compared to $21.8 million for the quarter ended March 30,
Previous report
General and administrative expenses for the quarter ended March 29, 2026 were $20.4 million compared to $18.9 million for the quarter ended March 30, 2025, an increase of $1.5 million or 7.7%. This increase was primarily driven by higher equity‑based compensation and an increase in advertising and professional fees, including $0.5 million of dead site costs. The increase was partially offset by lower vacation-related wage expense, software licensing and legal expenses.
Previous report
Other Income, Net
Previous report
Income Tax (Benefit) Expense
Previous report
Net (Loss) Income Attributable to Non-controlling Interests
Reworded paragraphs (39)
Previous wording
As of March 29, 2026, we owned and operated 106 Portillo’s restaurants across eleven 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 June 28, 2026, we owned and operated 109 Portillo’s restaurants across 11 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
•Total revenue of $182.6 million, an increase of 3.5% or $6.2 million
Current wording
•Total revenue of $199.0 million, an increase of 5.6% or $10.5 million
Previous wording
Restaurant-Level Adjusted EBITDA and Adjusted EBITDA are non-GAAP measures. Definitions and reconciliations of Adjusted EBITDA to net (loss) income and Restaurant-Level Adjusted EBITDA to operating income, the most directly comparable financial measures presented in accordance with GAAP, are set forth under the section "Key Performance Indicators and Non-GAAP Financial Measures".
Current wording
Restaurant-Level Adjusted EBITDA and Adjusted EBITDA are non-GAAP measures. Definitions and reconciliations of Adjusted EBITDA to net income and Restaurant-Level Adjusted EBITDA to operating income, the most directly comparable financial measures presented in accordance with GAAP, are set forth under the section "Key Performance Indicators and Non-GAAP Financial Measures".
Previous wording
•Michelle Hook announced that she will depart from her role as Chief Financial Officer, effective May 5, 2025.
Current wording
During the second quarter of 2026, Michelle Hook departed from her role as Chief Financial Officer, effective May 5, 2026. The Board of Directors engaged a leading executive search firm to assist in the identification and recruitment of a permanent Chief Financial Officer. The Company appointed Pamela Smith to serve as Interim Chief Financial Officer, effective May 20, 2026. On August 4, 2026, the Company announced that Kevin Kalicak, 53, who most recently served as an Officer of Darden Restaurants and Senior Vice President of Finance for Olive Garden, will join the Company and serve as the Company’s Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer), effective September 7, 2026.
Previous wording
In the quarter ended March 29, 2026, total revenue grew 3.5% or $6.2 million, primarily due to new restaurant openings in 2025 and 2026, partially offset by a decline in same-restaurant sales. Same-restaurant sales declined 0.1% during the quarter ended March 29, 2026, compared to a 1.8% increase during the quarter ended March 30, 2025. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.
Current wording
In the quarter and two quarters ended June 28, 2026, total revenue grew 5.6% or $10.5 million and 4.6% or $16.7 million, respectively, primarily due to new restaurant openings in 2025 and 2026, partially offset by a decline in same-restaurant sales. Same-restaurant sales declined 1.2% during the quarter ended June 28, 2026, compared to a 0.7% increase during the quarter ended June 29, 2025. Same-restaurant sales declined 0.7% during the two quarters ended June 28, 2026, compared to a 1.2% increase during the two quarters ended June 29, 2025. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.
Previous wording
In the quarter ended March 29, 2026, commodity inflation was 1.8%, compared to 3.4% for the quarter ended March 30, 2025. Labor, as a percentage of revenue, net increased 0.3% during the quarter ended March 29, 2026, compared to the quarter ended March 30, 2025, primarily due to higher benefit costs, incremental wage rate increases and deleverage from our newer restaurant openings, partially offset by labor efficiencies. We increased certain menu prices by approximately 2.0% in April 2026.
Current wording
In the quarter and two quarters ended June 28, 2026, commodity inflation was 7.0% and 4.5%, respectively, compared to 1.9% and 2.6% for the quarter and two quarters ended June 29, 2025. Labor, as a percentage of revenue, net, remained flat and increased 0.2% during the quarter and two quarters ended June 28, 2026, respectively, compared to the quarter and two quarters ended June 29, 2025. The increase in labor as a percentage of revenue for the two quarters ended June 28, 2026 was primarily driven by revenue deleverage from new restaurants and incremental wage rate increases, partially offset by labor efficiencies.
Previous wording
During the quarter ended March 29, 2026, we opened four restaurants. Subsequent to March 29, 2026, we opened one additional restaurant, bringing our total restaurant count to 107, 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 three additional restaurants in the remainder of fiscal 2026, including our first airport location at Dallas–Fort Worth International Airport and our second in-line location which will be in Chicago.
Current wording
During the quarter ended June 28, 2026, we opened three restaurants for a total of 109 restaurants, including a restaurant owned by C&O, of which Portillo’s owns 50% of the equity. We plan to open one additional restaurant in the fourth quarter of 2026, which will be our second in-line location and will be located in Chicago, Illinois.
Previous wording
The following table summarizes our results of operations for the quarters ended March 29, 2026 and March 30, 2025 (in thousands):
Current wording
The following table summarizes our results of operations for the quarter and two quarters ended June 28, 2026 and June 29, 2025 (in thousands):
Previous wording
Revenues for the quarter ended March 29, 2026 were $182.6 million compared to $176.4 million for the quarter ended March 30, 2025, an increase of $6.2 million or 3.5%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and four restaurants during the quarter ended March 29, 2026, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined in "Selected Operating Data" below) contributed $7.7 million of the total year-over-year increase. Same-restaurant sales decreased 0.1%, or $0.2 million in the quarter. The same-restaurant sales decline was attributable to a decrease in average check of 0.9%, partially offset by an increase in transactions of 0.8%. The lower average check was driven by an approximate 1.0% decrease in product mix, partially offset by a 0.1% increase in certain menu prices, net of promotional offers. For the purpose of calculating same-restaurant sales for the quarter ended March 29, 2026, sales for 83 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.
Current wording
Revenues for the quarter ended June 28, 2026 were $199.0 million compared to $188.5 million for the quarter ended June 29, 2025, an increase of $10.5 million or 5.6%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined in "Selected Operating Data" below) contributed $13.3 million of the total year-over-year increase. Same-restaurant sales decreased 1.2%, or $2.2 million in the quarter. The same-restaurant sales decline was attributable to a decrease in transactions of 3.4%, partially offset by an increase in average check of 2.2%. The higher average check was driven by an approximate 2.6% increase in certain menu prices, partially offset by a 0.4% decrease in product mix. We increased select menu prices by approximately 2.0% in April 2026. For the purpose of calculating same-restaurant sales for the quarter ended June 28, 2026, sales for 85 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 for the quarter ended March 29, 2026 were $63.3 million compared to $61.1 million for the quarter ended March 30, 2025, an increase of $2.2 million or 3.6%. This increase was primarily driven by a 1.8% increase in commodity prices and the opening of eight restaurants in 2025 and four restaurants during the quarter ended March 29, 2026. As a percentage of revenues, net, food, beverage and packaging costs increased 0.1% during the quarter ended March 29, 2026. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in certain menu prices, net of promotional offers.
Current wording
Food, beverage and packaging costs for the quarter ended June 28, 2026 were $69.6 million compared to $63.8 million for the quarter ended June 29, 2025, an increase of $5.8 million or 9.1%. This increase was primarily driven by a 7.0% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026. As a percentage of revenues, net, food, beverage and packaging costs increased 1.2% during the quarter ended June 28, 2026. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in average check.
Previous wording
Labor expenses include hourly and management wages, bonuses and equity-based compensation, payroll taxes, workers’ compensation expense, and team member benefits. Factors that influence labor costs include wage inflation and payroll tax legislation, health care costs and the staffing needs of our restaurants.
Current wording
Labor expenses include hourly and management wages, bonuses and equity-based compensation, payroll taxes, workers’ compensation expense, and team member benefits. Factors that influence labor costs include wage inflation and payroll tax and minimum wage legislation, health care costs and the staffing needs of our restaurants.
Previous wording
Labor expenses for the quarter ended March 29, 2026 were $49.2 million compared to $46.9 million for the quarter ended March 30, 2025, an increase of $2.3 million or 5.0%. This increase was primarily driven by the opening of eight restaurants in 2025 and four restaurants during the quarter ended March 29, 2026, and incremental investments to support our team members. As a percentage of revenues, net, labor increased 0.3% during the quarter ended March 29, 2026. The increase was primarily due to deleverage from our newer restaurant openings, higher benefit costs, and incremental wage rate increases, partially offset by labor efficiencies.
Current wording
Labor expenses for the two quarters ended June 28, 2026 were $100.3 million compared to $95.2 million for the two quarters ended June 29, 2025, an increase of $5.1 million or 5.3%. This increase was primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026, and incremental investments to support our team members. As a percentage of revenues, net, labor increased 0.2% during the two quarters ended June 28, 2026. The increase was primarily driven by revenue deleverage from new restaurants and incremental wage rate increases, partially offset by labor efficiencies.
Previous wording
Occupancy expenses for the quarter ended March 29, 2026 were $11.2 million compared to $10.0 million for the quarter ended March 30, 2025, an increase of $1.2 million or 11.6%, primarily driven by the opening of eight restaurants in 2025 and four restaurants during the quarter ended March 29, 2026. As a percentage of revenues, net, occupancy expenses increased 0.4% primarily driven by higher occupancy costs and revenue deleverage at new restaurants.
Current wording
Occupancy expenses for the quarter ended June 28, 2026 were $11.7 million compared to $10.0 million for the quarter ended June 29, 2025, an increase of $1.7 million or 17.3%, primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026. As a percentage of revenues, net, occupancy expenses increased 0.6% primarily driven by higher occupancy costs and revenue deleverage at new restaurants.
Previous wording
2025, an increase of $2.3 million or 10.7%, primarily due to the opening of eight restaurants in 2025 and four restaurants during the quarter ended March 29, 2026, and an increase in repairs and maintenance, operating supplies and insurance expense partially offset by lower cleaning expenses. As a percentage of revenues, net, operating expenses increased 0.8% primarily due to the aforementioned increases in expenses and revenue deleverage at new restaurants.
Current wording
Other operating expenses for the two quarters ended June 28, 2026 were $47.5 million compared to $43.7 million for the two quarters ended June 29, 2025, an increase of $3.7 million or 8.6%, primarily due to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026 as well as higher operating supplies and repair and maintenance expenses, partially offset by lower cleaning expenses. As a percentage of revenues, net, other operating expenses increased 0.5% due primarily to the aforementioned increases in expenses and revenue deleverage at new restaurants.
Previous wording
Pre-opening expenses for the quarter ended March 29, 2026 were $2.6 million compared to $0.5 million for the quarter ended March 30, 2025, an increase of $2.0 million or 402.0%. The increase was due to the number and timing of activities related to our planned restaurant openings, including higher pre-opening activity associated with new market locations, for the quarter ended March 29, 2026 as compared to the quarter ended March 30, 2025.
Current wording
Pre-opening expenses for the quarter ended June 28, 2026 were $0.9 million compared to $1.7 million for the quarter ended June 29, 2025, a decrease of $0.8 million or 44.7%. The decrease was due to the number and timing of activities related to our planned restaurant openings for the quarter ended June 28, 2026 as compared to the quarter ended June 29, 2025.
Previous wording
Depreciation and amortization expense for the quarter ended March 29, 2026 was $7.9 million compared to $7.0 million for the quarter ended March 30, 2025, an increase of $0.9 million or 12.7%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of eight restaurants in 2025 and four restaurants during the quarter ended March 29, 2026.
Current wording
Depreciation and amortization expense for the quarter ended June 28, 2026 was $8.3 million compared to $7.1 million for the quarter ended June 29, 2025, an increase of $1.1 million or 15.7%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of eight restaurants in fiscal 2025 and seven restaurants during the two quarters ended June 28, 2026.
Previous wording
Net income attributable to equity method investment for both the quarters ended March 29, 2026 and March 30, 2025 was $0.2 million.
Current wording
Net income attributable to equity method investment for both the quarters ended June 28, 2026 and June 29, 2025 was $0.4 million.
Previous wording
Other income, net, includes among other items, management fee income associated with our investment in C&O, trading gains or losses on our deferred compensation plan, gains or losses on asset disposals, and income resulting from discounts received for timely filing of sales tax returns.
Current wording
Other loss (income), net, includes among other items, legal expenses, management fee income associated with our investment in C&O, trading gains or losses on our deferred compensation plan, gains or losses on asset disposals, and income resulting from discounts received for timely filing of sales tax returns.
Previous wording
Other income, net, for the quarter ended March 29, 2026 was $0.3 million compared to $0.01 million for the quarter ended March 30, 2025, an increase of $0.3 million. This increase was primarily attributable to insurance proceeds received and a vendor settlement.
Current wording
Other loss (income), net for the quarter ended June 28, 2026 was a loss of $1.1 million compared to income of $0.3 million for the quarter ended June 29, 2025, a decrease of $1.4 million. This decrease was primarily attributable to a legal contingency of $1.7 million as discussed in Note 13. Contingencies.
Previous wording
Interest expense for the quarter ended March 29, 2026 was $5.6 million compared to $5.7 million for the quarter ended March 30, 2025, a decrease of $0.1 million or 2.1%. This decrease was primarily driven by a year-over-year lower effective interest rate.
Current wording
Interest expense for the two quarters ended June 28, 2026 was $11.3 million compared to $11.5 million for the two quarters ended June 29, 2025, a decrease of $0.2 million or 1.5%. This decrease was primarily driven by a lower effective interest rate attributable to the improved lending terms associated with our 2025 Credit Agreement.
Previous wording
Our effective interest rate was 6.52%as of March 29, 2026 and 7.02% as of March 30, 2025.
Current wording
Our effective interest rate was 6.47%as of June 28, 2026 and 6.90% as of June 29, 2025.
Previous wording
The Tax Receivable Agreement liability adjustment for the quarter ended March 29, 2026 was $0.4 million compared to $0.6 million for the quarter ended March 30, 2025. The change was related to a remeasurement primarily due to activity under equity-based compensation plans.
Current wording
The Tax Receivable Agreement liability adjustment for the quarter ended June 28, 2026 was $0.8 million compared to $1.8 million for the quarter ended June 29, 2025. The change was related to a remeasurement primarily due to activity under equity-based compensation plans.
Previous wording
Income tax benefit for the quarter ended March 29, 2026 was $0.2 million compared to income tax expense of $1.4 million for the quarter ended March 30, 2025, a decrease of $1.5 million or 112.1%. Our effective income tax rate for the quarter ended March 29, 2026 was 24.4%, compared to 25.4% for the quarter ended March 30, 2025. The decrease in our effective income tax rate for the quarter ended March 29, 2026 compared to the quarter ended March 30, 2025 was primarily driven by an increase in the valuation allowance related to equity-based compensation expense for certain executive officers. This decreases the effective income tax rate because the Company recorded a pre-tax loss for the quarter ended March 29, 2026. This decrease is 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 June 28, 2026 was $1.8 million compared to income tax expense of $3.7 million for the quarter ended June 29, 2025, a decrease of $1.9 million or 51.9%. Our effective income tax rate for the quarter ended June 28, 2026 was 19.8%, compared to 26.8% for the quarter ended June 29, 2025. The decrease in our effective income tax rate for the quarter ended June 28, 2026 compared to the quarter ended June 29, 2025 was primarily driven by a decrease in the valuation allowance related to equity-based compensation expense for certain executive officers. This decrease is partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income of Portillo's OpCo.
Previous wording
We are the sole managing member of Portillo's OpCo. We manage and operate the business and control the strategic decisions and day-to-day operations of Portillo’s OpCo and we also have a substantial financial interest in Portillo’s OpCo. Accordingly, we consolidate the financial results of Portillo’s OpCo, and a portion of our net (loss) income is allocated to non-controlling interests to reflect the entitlement of the pre-IPO LLC Members who retained their equity ownership in Portillo's OpCo (the "pre-IPO LLC Members"). The weighted average ownership percentages for the applicable reporting periods are used to attribute net (loss) income to Portillo's Inc. and the non-controlling interest holders.
Current wording
We are the sole managing member of Portillo's OpCo. We manage and operate the business and control the strategic decisions and day-to-day operations of Portillo’s OpCo and we also have a substantial financial interest in Portillo’s OpCo. Accordingly, we consolidate the financial results of Portillo’s OpCo, and a portion of our net income is allocated to non-controlling interests to reflect the entitlement of the pre-IPO LLC Members who retained their equity ownership in Portillo's OpCo (the "pre-IPO LLC Members").
Previous wording
Net loss attributable to non-controlling interests for the quarter ended March 29, 2026 was $0.1 million, compared to net income attributable to non-controlling interests of $0.7 million for the quarter ended March 30, 2025, a decrease of $0.8 million or 115.8%. The decrease in net income attributable to non-controlling interests for the quarter ended March 29, 2026 was primarily due to a decrease in net income for the quarter ended March 29, 2026, partially offset by a decrease in the pre-IPO LLC Members non-controlling interest holders' weighted average ownership to 4.6% for the quarter ended March 29, 2026 from 14.4% for the quarter ended March 30, 2025.
Current wording
Net income attributable to non-controlling interests for the quarter ended June 28, 2026 was $0.2 million, compared to net income attributable to non-controlling interests of $1.3 million for the quarter ended June 29, 2025, a decrease of $1.1 million or 84.2%. The decrease in net income attributable to non-controlling interests for the quarter ended June 28, 2026 was primarily due to a decrease in the pre-IPO LLC Members non-controlling interest holders' weighted average ownership to 4.5% for the quarter ended June 28, 2026 from 9.9% for the quarter ended June 29, 2025 and a decrease in the net income for the quarter ended June 28, 2026.
Previous wording
(a) Includes a restaurant that is owned by C&O, of which Portillo’s owns 50% of the equity. AUVs for the quarters ended March 29, 2026 and March 30, 2025 represent AUVs for the twelve months ended March 29, 2026 and March 30, 2025, respectively. Total restaurants indicated are as of March 29, 2026.
Current wording
(a) Includes a restaurant that is owned by C&O, of which Portillo’s owns 50% of the equity. AUVs for the quarters ended June 28, 2026 and June 29, 2025 represent AUVs for the twelve months ended June 28, 2026 and June 29, 2025, respectively. Total restaurants indicated are as of June 28, 2026 and June 29, 2025, respectively.
Previous wording
The change in same-restaurant sales is the percentage change in year-over-year revenue 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 29, 2026 and March 30, 2025, there were 83 and 74 restaurants in our Comparable Restaurant Base, respectively. The Comparable Restaurant Base excludes C&O.
Current wording
The change in same-restaurant sales is the percentage change in year-over-year revenue 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”). As of June 28, 2026 and June 29, 2025, there were 85 and 75 restaurants in our Comparable Restaurant Base, respectively. The Comparable Restaurant Base excludes C&O.
Previous wording
Adjusted EBITDA represents net (loss) income before depreciation and amortization, interest expense, interest income and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net (loss) income, the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues, net.
Current wording
Adjusted EBITDA represents net income before depreciation and amortization, interest expense, interest income and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net income, the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues, net.
Previous wording
The following table reconciles net (loss) income to Adjusted EBITDA and Adjusted EBITDA margin (in thousands):
Current wording
The following table reconciles net income to Adjusted EBITDA and Adjusted EBITDA margin (in thousands):
Previous wording
(4) Represents 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 loss (income), net.
Previous wording
(5) Represents $0.5 million of costs related to the Company's strategic reset of its development and growth plans and $0.2 million related to CEO transition and replacement costs. These costs are included within general and administrative expenses.
Current wording
(7) Represents costs related to the Company's strategic reset of its development and growth plans and CEO transition and replacement costs. These costs are included within general and administrative expenses.
Previous wording
(1) Restaurant-Level Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Revenues, net.
Current wording
(1) Restaurant-Level Adjusted EBITDA Margin is defined as Restaurant-Level Adjusted EBITDA divided by Revenues, net.
Previous 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 29, 2026, we maintained a cash and cash equivalents and restricted cash balance of $24.0 million and had $41.6 million of availability under our 2025 Revolver Facility, after giving effect to $4.4 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 June 28, 2026, we maintained a cash and cash equivalents and restricted cash balance of $21.3 million and had $48.8 million of availability under our 2025 Revolver Facility, after giving effect to $4.2 million in outstanding letters of credit.
Previous wording
As of March 29, 2026, we estimate that our obligation for future payments under the TRA totaled $344.2 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 $404.9 million as of March 29, 2026. Under this scenario, we would be required to pay the TRA Parties approximately 85% of such amount, or $344.2 million, primarily over the next 15 years, substantially declining in year 16 through year 47. In the quarter ended March 29, 2026 and March 30, 2025, we made TRA payments of $7.9 million relating to tax year 2024 and $7.7 million relating to tax year 2023, respectively. We expect a payment of $1.3 million relating to tax year 2025 to be paid within the next 12 months.
Current wording
As of June 28, 2026, we estimate that our obligation for future payments under the TRA totaled $343.4 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 $404.0 million as of June 28, 2026. Under this scenario, we would be required to pay the TRA Parties approximately 85% of such amount, or $343.4 million, primarily over the next 15 years, substantially declining in year 16 through year 47. In the two quarters ended June 28, 2026 and June 29, 2025, we made TRA payments of $7.9 million relating to tax year 2024 and $7.7 million relating to tax year 2023, respectively. We expect a payment of $1.3 million relating to tax year 2025 to be paid within the next 12 months.
Previous wording
Net cash provided by operating activities for the quarter ended March 29, 2026 was $17.6 million compared to net cash provided by operating activities of $9.5 million for the quarter ended March 30, 2025, an increase of $8.1 million or 85.8%. This increase was primarily driven by the change in operating assets and liabilities of $11.7 million and the change in non-cash items of $0.9 million, partially offset by a net loss of $0.5 million in the quarter ended March 29, 2026 compared to net income of $4.0 million in the quarter ended March 30, 2025.
Current wording
Net cash provided by operating activities for the two quarters ended June 28, 2026 was $35.1 million compared to net cash provided by operating activities of $28.7 million for the two quarters ended June 29, 2025, an increase of $6.4 million or 22.4%. This increase was primarily driven by the change in operating assets and liabilities of $12.7 million and the change in non-cash items of $1.1 million, partially offset by a decrease in net income of $7.4 million.
Previous wording
The $11.7 million change in our operating assets and liabilities balances was primarily driven by operating assets and liabilities being a source of net cash of $7.6 million in the quarter ended March 29, 2026, compared to a use of net cash of $4.2 million in quarter ended March 30, 2025 driven by the change in accounts payable, accrued expenses and other liabilities, and deferred lease incentives in the quarter ended March 29, 2026. The $0.9 million change from the quarter ended March 29, 2026 in non-cash charges is primarily driven by higher equity-based compensation expense and depreciation and amortization expense, partially offset by a decrease in deferred income tax expense. The change in net (loss) income for the quarter ended March 29, 2026 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 29, 2026 compared to the quarter ended March 30, 2025.
Current wording
The $12.7 million change in our operating assets and liabilities balances was primarily driven by operating assets and liabilities being a source of net cash of $6.0 million in the two quarters ended June 28, 2026, compared to a use of net cash of $6.7 million in two quarters ended June 29, 2025 driven by the change in accounts payable, deferred lease incentives, and accrued expenses and other liabilities in the two quarters ended June 28, 2026. The $1.1 million change from the two quarters ended June 28, 2026 in non-cash charges is primarily driven by higher depreciation and amortization expense, a decrease in our tax receivable agreement liability adjustment, and an increase in equity-based compensation expense, partially offset by a decrease in deferred income tax expense. The change in net income for the two quarters ended June 28, 2026 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 two quarters ended June 28, 2026 compared to the two quarters ended June 29, 2025.
Previous wording
Net cash used in investing activities was $18.3 million for the quarter ended March 29, 2026 compared to $19.0 million for the quarter ended March 30, 2025, a decrease of $0.7 million or 3.9%. This decrease was primarily due to the number, format and timing of builds in process.
Current wording
Net cash used in investing activities was $30.0 million for the two quarters ended June 28, 2026 compared to $33.1 million for the two quarters ended June 29, 2025, a decrease of $3.1 million or 9.4%. This decrease was primarily due to the number, format and timing of restaurant builds in process.
Previous wording
Net cash provided by financing activities was $4.8 million for the quarter ended March 29, 2026 compared to net cash used in financing activities of $0.4 million for the quarter ended March 30, 2025, an increase of $5.1 million or 1466.0%. This increase is primarily due to increased short-term borrowings under the 2025 Credit Agreement, as well as lower distributions to noncontrolling interest holders and the absence of deferred financing costs, partially offset by higher payments under the Tax Receivable Agreement liability and lower proceeds from activity under equity-based compensation plans.
Current wording
Net cash used in financing activities was $3.9 million for the two quarters ended June 28, 2026 compared to net cash used in financing activities of $1.9 million for the two quarters ended June 29, 2025, a decrease of $2.0 million or 106.0%. This increase was primarily driven by lower net short-term borrowings under the 2025 Credit Agreement and reduced proceeds from equity-based compensation plan activity, partially offset by the absence of deferred financing costs and lower distributions to noncontrolling interest holders.
Previous wording
As of March 29, 2026, we had $104.0 million of borrowings under the 2025 Revolver Facility, and letters of credit issued under the 2025 Revolver Facility totaled $4.4 million. As a result, as of March 29, 2026, the Company had $41.6 million available under the 2025 Revolver Facility.
Current wording
As of June 28, 2026, we had $97.0 million of borrowings under the 2025 Revolver Facility, and letters of credit issued under the 2025 Revolver Facility totaled $4.2 million. As a result, as of June 28, 2026, the Company had $48.8 million available under the 2025 Revolver Facility.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
(1) Total restaurants indicated are as of June 28, 2026. Excludes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity.
Current report — wording carried from elsewhere
(2) Includes revenue from direct shipping sales and non-traditional locations.
Current report — wording carried from elsewhere
Pre-opening expenses for the two quarters ended June 28, 2026 were $3.5 million compared to $2.2 million for the two quarters ended June 29, 2025, an increase of $1.3 million or 58.2%. This increase was due to the number and timing of planned restaurant openings, including higher pre-opening activity associated with new market locations, for the two quarters ended June 28, 2026 as compared to the two quarters ended June 29, 2025.
Current report — wording carried from elsewhere
Income tax expense for the two quarters ended June 28, 2026 was $1.6 million compared to income tax expense of $5.0 million for the two quarters ended June 29, 2025, a decrease of $3.4 million or 68.1%. Our effective income tax rate for the two quarters ended June 28, 2026 was 19.5%, compared to 26.4% for the two quarters ended June 29, 2025. The decrease in our effective income tax rate for the two quarters ended June 28, 2026 compared to the two quarters ended June 29, 2025 was primarily driven by a decrease in the valuation allowance related to equity-based compensation expense for certain executive officers. This decrease is partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income of Portillo's OpCo.
Current report — wording carried from elsewhere
Net Income Attributable to Non-controlling Interests