Portillo’s reported first quarter results that drew a positive market response, with management crediting sales growth to increased brand awareness, successful advertising campaigns in Dallas-Fort Worth, and the rollout of the new Portillo’s Perks loyalty program. CEO Michael Osanloo noted that robust guest engagement and targeted marketing efforts, especially in new markets, helped offset weather-related challenges and lower consumer confidence. The company’s ability to maintain steady operating margins despite ongoing inflation and macroeconomic headwinds was also highlighted as a key factor in the quarter’s performance.
Is now the time to buy PTLO? Find out in our full research report (it’s free).
Portillo's (PTLO) Q1 CY2025 Highlights:
- Revenue: $176.4 million vs analyst estimates of $180.7 million (6.4% year-on-year growth, 2.4% miss)
- Adjusted EPS: $0.06 vs analyst estimates of $0.05 (33.1% beat)
- Adjusted EBITDA: $21.21 million vs analyst estimates of $22.55 million (12% margin, 6% miss)
- Operating Margin: 5.9%, in line with the same quarter last year
- Locations: 94 at quarter end, up from 85 in the same quarter last year
- Same-Store Sales rose 1.8% year on year (-1.2% in the same quarter last year)
- Market Capitalization: $730.5 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Portillo's’s Q1 Earnings Call
- Sharon Zackfia (William Blair) asked about underperformance in new Houston locations and whether it reflected macroeconomic factors or brand awareness. CEO Michael Osanloo responded that lower awareness, not operational issues, was the primary challenge, and outlined increased marketing efforts to address it.
- Brian Harbour (Morgan Stanley) inquired about the back-loaded timing of new restaurant openings in 2025. CFO Michelle Hook explained the shift was due to permitting delays, but affirmed no broader concerns with the pipeline and expected a more balanced cadence in future years.
- David Tarantino (Baird) questioned whether new restaurant formats or streamlined menus contributed to slower starts. Osanloo said site-specific factors, such as local construction and limited pre-opening marketing, were more influential, and expressed confidence in the new formats.
- Jim Salera (Stephens Inc.) asked how management justified higher same-store sales guidance amid a challenging consumer environment. Hook cited increased pricing, kiosk adoption, and the potential for the Perks program and targeted advertising to improve transaction trends through the year.
- Chris O’Cull (Stifel) sought details on sustaining sales momentum in Dallas and advertising plans for new markets. Osanloo described a strategy of ongoing, social-media-driven campaigns tied to loyalty sign-ups, with similar approaches being rolled out in Phoenix and planned for other regions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the effectiveness of Portillo’s Perks in driving repeat visits and personalized marketing, (2) the performance of new restaurant openings in Texas and Florida as brand awareness-building efforts intensify, and (3) the impact of continued kiosk adoption on average check and operational efficiency. The evolution of breakfast testing and the company’s response to inflationary pressures will also be important markers of progress.
Portillo's currently trades at $11.57, up from $10.40 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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