Casual restaurant chain Portillo’s (NASDAQ: PTLO) met Wall Street’s revenue expectations in Q4 CY2025, but sales were flat year on year at $185.7 million. Its GAAP profit of $0.08 per share was 74.3% above analysts’ consensus estimates.
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Portillo's (PTLO) Q4 CY2025 Highlights:
- Revenue: $185.7 million vs analyst estimates of $185.7 million (flat year on year, in line)
- EPS (GAAP): $0.08 vs analyst estimates of $0.05 (74.3% beat)
- Adjusted EBITDA: $24.67 million vs analyst estimates of $24.57 million (13.3% margin, in line)
- Operating Margin: 5.6%, down from 7.5% in the same quarter last year
- Locations: 102 at quarter end, up from 94 in the same quarter last year
- Same-Store Sales fell 3.3% year on year (0.4% in the same quarter last year)
- Market Capitalization: $416.5 million
"Portillo's took a number of steps in the fourth quarter to change the trajectory of the business by implementing a reset of our new restaurant growth strategy, refocusing on operational fundamentals and deploying more dynamic marketing tactics," said Mike Miles, Chairman of the Board and Interim CEO.
Company Overview
Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $732.1 million in revenue over the past 12 months, Portillo's is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can grow faster because it has more white space to build new restaurants.
As you can see below, Portillo’s sales grew at a decent 7.3% compounded annual growth rate over the last six years as it opened new restaurants and expanded its reach.
This quarter, Portillo’s $185.7 million of revenue was flat year on year and in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 7.6% over the next 12 months, similar to its six-year rate. This projection is above the sector average and indicates its newer menu offerings will help sustain its historical top-line performance.
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Restaurant Performance
Number of Restaurants
The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.
Portillo's operated 102 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 11.4% annual growth, much faster than the broader restaurant sector. This gives it a chance to scale into a mid-sized business over time.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
Portillo’s demand within its existing dining locations has barely increased over the last two years as its same-store sales were flat. Portillo's should consider improving its foot traffic and efficiency before expanding its restaurant base.
In the latest quarter, Portillo’s same-store sales fell by 3.3% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.
Key Takeaways from Portillo’s Q4 Results
It was good to see Portillo's beat analysts’ EPS expectations this quarter. We were also happy its same-store sales was in line with Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock remained flat at $5.83 immediately after reporting.
Sure, Portillo's had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
