Portillo's Inc.

Previous wording

The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under theheading “Cautionary Statements Concerning Forward-Looking Statements” in this report and under the heading “Risk Factors” in Part I, Item IA of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 and Part II, Item 1A of this Form 10-Q. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 and the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Form 10-Q. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Current wording

The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under theheading “Cautionary Note Regarding Forward-Looking Information” in this report and under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 and Part II, Item 1A of this Form 10-Q. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 and the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Form 10-Q. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Previous 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.

Current wording

Portillo’s serves a menu of iconic Chicago-style favorites in high-energy, multichannel restaurants designed to create joy for our guests. Since our founding in 1963 in a small trailer that Dick Portillo called “The Dog House,” we have grown into a brand with a passionate (some might say obsessed) nationwide following. Our diverse menu features craveable 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. Beyond the menu, our restaurants combine 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 to quickly and efficiently serve our guests any way they want to enjoy their Portillo's, including dine-in, carryout, delivery and catering. We believe the combination of our craveable food, multichannel sales model, dedication to operational excellence, and team member-driven culture gives us a competitive advantage.

Previous wording

Financial Highlights for the Two Quarters Ended June 28, 2026 vs. Two Quarters Ended June 29, 2025:

Current wording

Financial Highlights for the Three Quarters Ended September 27, 2026 vs. Three Quarters Ended September 28, 2025:

Previous 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.

Current wording

In the quarter and three quarters ended September 27, 2026, total revenue grew 7.0% or $12.6 million and 5.4% or $29.3 million, respectively, primarily due to new restaurant openings in 2025 and 2026. Same-restaurant sales increased 1.4% during the quarter ended September 27, 2026, compared to a 0.8% decrease during the quarter ended September 28, 2025. Same-restaurant sales were flat during the three quarters ended September 27, 2026, compared to an increase of 0.5% during the three quarters ended September 28, 2025. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.

Previous 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.

Current wording

In the quarter and three quarters ended September 27, 2026, commodity inflation was 2.2% and 3.7%, respectively, compared to 6.3% and 3.9% for the quarter and three quarters ended September 28, 2025. Labor, as a percentage of revenue, net, decreased 0.6% and 0.1% during the quarter and three quarters ended September 27, 2026, respectively, compared to the quarter and three quarters ended September 28, 2025. The decrease in labor as a percentage of revenue for the quarter and three quarters ended September 27, 2026 was primarily driven by labor efficiencies and an increase in our average check.

Previous 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.

Current wording

During the three quarters ended September 27, 2026, we opened seven new 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 quarter and two quarters ended June 28, 2026 and June 29, 2025 (in thousands):

Current wording

The following table summarizes our results of operations for the quarter and three quarters ended September 27, 2026 and September 28, 2025 (in thousands):

Previous 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.

Current wording

Revenues for the quarter ended September 27, 2026 were $194.1 million compared to $181.4 million for the quarter ended September 28, 2025, an increase of $12.6 million or 7.0%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026 and an increase in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined in "Selected Operating Data" below) contributed $10.3 million of the total year-over-year increase. Same-restaurant sales increased 1.4%, or $2.4 million in the quarter. The same-restaurant sales increase was attributable to an increase in average check of 2.1%, partially offset by a decrease in transactions of 0.7%. The higher average check was driven by an approximate 2.1% increase in certain menu prices. For the purpose of calculating same-restaurant sales for the quarter ended September 27, 2026, sales for 87 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.

Previous wording

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 wording

Revenues for the three quarters ended September 27, 2026 were $575.7 million compared to $546.3 million for the three quarters ended September 28, 2025, an increase of $29.3 million or 5.4%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. Restaurants not in our Comparable Restaurant Base contributed $31.3 million of the total year-over-year increase. Same-restaurant sales were flat. Flat same-restaurant sales were attributable to a 1.1% increase in average check, offset by a decrease in transactions of 1.1%. The increase in average check was driven by an approximate 1.6% increase in certain menu prices, partially offset by a 0.5% 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 three quarters ended September 27, 2026, sales for 87 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 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.

Current wording

Food, beverage and packaging costs for the quarter ended September 27, 2026 were $66.8 million compared to $62.6 million for the quarter ended September 28, 2025, an increase of $4.2 million or 6.7%. This increase was primarily driven by a 2.2% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. As a percentage of revenues, net, food, beverage and packaging costs decreased 0.1% during the quarter ended September 27, 2026. The decrease was primarily due to an increase in average check, partially offset by an increase in certain commodity prices.

Previous wording

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 wording

Food, beverage and packaging costs for the three quarters ended September 27, 2026 were $199.7 million compared to $187.5 million for the three quarters ended September 28, 2025, an increase of $12.2 million or 6.5%. This increase was primarily driven by a 3.7% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. As a percentage of revenues, net, food, beverage and packaging costs increased 0.4% during the three quarters ended September 27, 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 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 wording

Labor expenses for the quarter ended September 27, 2026 were $50.4 million compared to $48.3 million for the quarter ended September 28, 2025, an increase of $2.2 million or 4.5%. This increase was primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. As a percentage of revenues, net, labor decreased 0.6% during the quarter ended September 27, 2026. The decrease was primarily due to labor efficiencies and an increase in our average check, partially offset by higher benefit costs, lower transactions, and revenue deleverage from new restaurants.

Previous 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.

Current wording

Labor expenses for the three quarters ended September 27, 2026 were $150.7 million compared to $143.5 million for the three quarters ended September 28, 2025, an increase of $7.3 million or 5.1%. This increase was primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026, and higher benefit costs. As a percentage of revenues, net, labor decreased 0.1% during the three quarters ended September 27, 2026. The decrease was primarily driven by labor efficiencies and an increase in our average check, partially offset by lower transactions, revenue deleverage from new restaurants, and higher benefit costs.

Previous 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.

Current wording

Occupancy expenses for the quarter ended September 27, 2026 were $11.7 million compared to $10.5 million for the quarter ended September 28, 2025, an increase of $1.1 million or 10.9%, primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. As a percentage of revenues, net, occupancy expenses increased 0.2% primarily driven by revenue deleverage at new restaurants.

Previous wording

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 wording

Occupancy expenses for the three quarters ended September 27, 2026 were $34.5 million compared to $30.5 million for the three quarters ended September 28, 2025, an increase of $4.0 million or 13.2%, primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026. As a percentage of revenues, net, occupancy expenses increased 0.4% primarily driven by higher lease expense and revenue deleverage at new restaurants.

Previous 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.

Current wording

Other operating expenses for the three quarters ended September 27, 2026 were $72.5 million compared to $67.0 million for the three quarters ended September 28, 2025, an increase of $5.5 million or 8.1%, primarily due to the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026 as well as higher insurance and building repair and maintenance expenses, partially offset by lower cleaning expenses. As a percentage of revenues, net, other operating expenses increased 0.3% due primarily to the aforementioned increases in expenses.

Previous 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.

Current wording

Pre-opening expenses for the quarter ended September 27, 2026 were $0.6 million compared to $3.3 million for the quarter ended September 28, 2025, a decrease of $2.6 million or 81.2%. The decrease was due to the number and timing of activities related to our planned restaurant openings for the quarter ended September 27, 2026 as compared to the quarter ended September 28, 2025.

Previous wording

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 wording

Pre-opening expenses for the three quarters ended September 27, 2026 were $4.1 million compared to $5.5 million for the three quarters ended September 28, 2025, a decrease of $1.4 million or 24.9%. This decrease was due to the number and timing of planned restaurant openings, for the three quarters ended September 27, 2026 as compared to the three quarters ended September 28, 2025.

Previous 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.

Current wording

Depreciation and amortization expense for the quarter ended September 27, 2026 was $8.3 million compared to $7.3 million for the quarter ended September 28, 2025, an increase of $1.0 million or 14.0%. 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 three quarters ended September 27, 2026, partially offset by a reduction in depreciation expense due to fully depreciated assets and disposals.

Previous wording

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 wording

Depreciation and amortization expense for the three quarters ended September 27, 2026 was $24.5 million compared to $21.5 million for the three quarters ended September 28, 2025, an increase of $3.0 million or 14.1%. 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 three quarters ended September 27, 2026, partially offset by a reduction in depreciation expense due to fully depreciated assets and disposals.

Previous wording

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 wording

Net income attributable to equity method investment for the quarter ended September 27, 2026 was $0.4 million compared to $0.5 million for the quarter ended September 28, 2025, a decrease of $0.1 million or 13.1%. This decrease was primarily driven by a decrease in sales.

Previous wording

Net income attributable to equity method investment for both the quarters ended June 28, 2026 and June 29, 2025 was $0.4 million.

Current wording

Net income attributable to equity method investment for both the three quarters ended September 27, 2026 and three quarters ended September 28, 2025 was $1.0 million.

Previous 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.

Current wording

Other (income) loss, net, includes among other items, certain legal contingencies, 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

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.

Current wording

Interest expense for the three quarters ended September 27, 2026 was $16.8 million compared to $17.1 million for the three quarters ended September 28, 2025, a decrease of $0.3 million or 1.9%. This decrease was primarily driven by a lower effective interest rate.

Previous wording

Our effective interest rate was 6.47%as of June 28, 2026 and 6.90% as of June 29, 2025.

Current wording

Our effective interest rate was 6.53%as of September 27, 2026 and 6.90% as of September 28, 2025.

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 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.

Previous 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.

Current wording

The Tax Receivable Agreement liability adjustment for the quarter ended September 27, 2026 was a benefit of $0.2 million compared to an expense of $0.4 million for the quarter ended September 28, 2025. The change was related to a remeasurement primarily due to activity under equity-based compensation plans and prior year impacts from Public Law 119-21, popularly known as the "One Big Beautiful Bill Act".

Previous wording

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 wording

The Tax Receivable Agreement liability adjustment was $1.4 million for the three quarters ended September 27, 2026 and $2.1 million for the three quarters ended September 28, 2025 related to a remeasurement primarily due to activity under equity-based compensation plans.

Previous 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.

Current wording

Income tax expense for the quarter ended September 27, 2026 was $1.8 million compared to income tax benefit of $1.2 million for the quarter ended September 28, 2025, an increase of $3.0 million or 244.1%. Our effective income tax rate for the quarter ended September 27, 2026 was 27.4%, compared to 268.2% for the quarter ended September 28, 2025. The decrease in our effective income tax rate for the quarter ended September 27, 2026 compared to the quarter ended September 28, 2025 was primarily driven by prior year valuation allowance movement related to the separation of our former Chief Executive Officer. 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.

Previous wording

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 wording

Income tax expense for the three quarters ended September 27, 2026 was $3.4 million compared to income tax expense of $3.8 million for the three quarters ended September 28, 2025, a decrease of $0.4 million or 10.3%. Our effective income tax rate for the three quarters ended September 27, 2026 was 23.0%, compared to 20.4% for the three quarters ended September 28, 2025. The increase in our effective income tax rate for the three quarters ended September 27, 2026 compared to the three quarters ended September 28, 2025 was primarily driven 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.

Previous 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.

Current wording

Net income attributable to non-controlling interests for the quarter ended September 27, 2026 was $0.3 million, compared to net loss attributable to non-controlling interests of $0.4 million for the quarter ended September 28, 2025, an increase of $0.7 million or 158.1%. The increase in net income attributable to non-controlling interests for the quarter ended September 27, 2026 was primarily due to an increase in net income for the quarter ended September 27, 2026, partially offset by the decrease in the pre-IPO LLC Members non-controlling interest holders' weighted average ownership to 4.5% for the quarter ended September 27, 2026 from 4.6% for the quarter ended September 28, 2025.

Previous wording

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 wording

Net income attributable to non-controlling interests for the three quarters ended September 27, 2026 was $0.4 million, compared to net income attributable to non-controlling interest of $1.6 million for the three quarters ended September 28, 2025, a decrease of $1.2 million or 77.6%. The decrease in net income attributable to non-controlling interests for the three quarters ended September 27, 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 three quarters ended September 27, 2026 from 9.6% for the three quarters ended September 28, 2025 and a decrease in net income for the three quarters ended September 27, 2026.

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”). 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.

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 September 27, 2026 and September 28, 2025, there were 87 and 76 restaurants in our Comparable Restaurant Base, respectively. The Comparable Restaurant Base excludes C&O.

Previous wording

A change in same-restaurant sales is the result of a change in restaurant transactions, average guest check, or a combination of the two. We gather daily sales data and regularly analyze the guest transaction counts and the mix of menu items sold to strategically evaluate menu pricing and demand. Measuring our change in same-restaurant sales allows management to evaluate the performance of our existing restaurant base. We believe this measure provides a consistent comparison of restaurant sales results and trends across periods within our core, established restaurant base, unaffected by results of restaurant openings and enables investors to better understand and evaluate the Company’s historical and prospective operating performance.

Current wording

A change in same-restaurant sales is the result of a change in restaurant transactions, average guest check, or a combination of the two. We gather daily sales data and regularly analyze the guest transaction counts and the mix of menu items sold to strategically evaluate menu pricing and demand. Measuring our change in same-restaurant sales allows management to evaluate the performance of our existing restaurant base. We believe this measure provides a consistent comparison of restaurant sales results and trends across periods within our core, established restaurant base, and enables investors to better understand and evaluate the Company’s historical and prospective operating performance.

Previous wording

(2) Represents non-capitalized third party consulting and software licensing costs incurred in connection with the implementation of a new HCM system 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 Human Capital Management (" HCM") system which are included within general and administrative expenses.

Previous wording

(3) Represents amortization of capitalized cloud-based ERP and HCM system implementation costs that are included within general and administrative expenses.

Current wording

(3) Represents amortization of capitalized cloud-based Enterprise Resource Planning and HCM system implementation costs that are included within general and administrative expenses.

Previous wording

(4) Represents loss on disposal of property and equipment included within other loss (income), net.

Current wording

(4) Represents loss on disposal of property and equipment included within other (income) loss, net. The prior-year periods also include a legacy Barnelli's trade name impairment charge, included within other (income) loss, net.

Previous wording

(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 wording

(6) Represents a legal contingency recorded in connection with the Maverick arbitration as discussed in Note 13. Contingencies, included within other (income) loss, 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 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.

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 September 27, 2026, we maintained a cash and cash equivalents and restricted cash balance of $24.8 million and had $60.8 million of availability under our 2025 Revolver Facility, after giving effect to $4.2 million in outstanding letters of credit.

Previous wording

Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, capital expenditures, and general Restaurant Support Center needs. Our requirements for working capital are not significant because our guests pay for their food and beverage purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening of new restaurants, existing capital investments (both for remodels and maintenance), as well as investments in our Restaurant Support Center infrastructure. Additionally, we continue to invest in technology, including upgrades to our IT infrastructure, to improve operational efficiency and the guest experience.

Current wording

Our primary requirements for liquidity are to fund our working capital needs, operating lease obligations, capital expenditures, and general Restaurant Support Center needs. Our requirements for working capital are not significant because our guests pay for their food and beverage purchases in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the supplier of such items. Our ongoing capital expenditures are principally related to opening of new restaurants, existing capital investments (both for remodels and maintenance), as well as investments in our Restaurant Support Center infrastructure.