Portillo's Q4 revenue misses estimates

Overview

• Restaurant chain's Q4 revenue rose 0.6% yr/yr but missed analyst expectations

• Net income for Q4 decreased 49.5% yr/yr due to expense factors

• Company implemented strategic changes to improve business performance

Outlook

• Portillo's plans to open 8 new units in fiscal 2026

• Company expects mid-single-digit commodity inflation in 2026

• Portillo's forecasts 2026 labor inflation between 3% and 3.5%

• Portillo's targets 2026 restaurant-level adjusted EBITDA margin of 20.5% to 21%

• Company projects 2026 general and administrative expenses of $80-$82 mln

• Portillo's anticipates flat adjusted EBITDA vs. 2025

Result Drivers

• NEW RESTAURANT OPENINGS - Revenue increase attributed to opening of eight new restaurants in fiscal 2025, despite decline in same-restaurant sales

• SAME-RESTAURANT SALES DECLINE - Same-restaurant sales decreased 3.3% due to a decline in transactions, with average check remaining flat

• INCREASED OPERATING EXPENSES - Operating expenses rose due to new restaurant openings and higher commodity and labor costs

Company press release: ID:nGNX9J3LVr

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Portillos Inc is $6.00, about 3.6% above its February 23 closing price of $5.79

• The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 17 three months ago

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