Portillo’s Inc. Announces Second Quarter 2024 Financial Results
Portillo's Inc. (NASDAQ: PTLO) reported its Q2 2024 financial results, showing a 7.5% increase in total revenue to $181.9 million. The company experienced a 0.6% decrease in same-restaurant sales but saw improvements in operating income, Restaurant-Level Adjusted EBITDA, and Adjusted EBITDA. Key highlights include:
- Net income decreased by $1.4 million to $8.5 million
- Operating income increased by $0.7 million to $18.1 million
- Restaurant-Level Adjusted EBITDA rose by $1.8 million to $44.6 million
- Adjusted EBITDA increased by $0.6 million to $29.9 million
Portillo's opened two new restaurants in Q2 2024 and plans to open at least 10 new locations in 2024. The company updated its fiscal 2024 targets, projecting flat to slightly positive same-restaurant sales and maintaining its Restaurant-Level Adjusted EBITDA margin forecast of 23-24%.
Portillo's Inc. (NASDAQ: PTLO) ha riportato i risultati finanziari per il secondo trimestre del 2024, registrando un aumento del 7,5% del fatturato totale a $181,9 milioni. L'azienda ha subito un calo dello 0,6% delle vendite negli stessi ristoranti, ma ha visto miglioramenti nell'utile operativo, nell'EBITDA rettificato a livello di ristorante e nell'EBITDA rettificato. I punti salienti includono:
- L'utile netto è diminuito di $1,4 milioni, raggiungendo i $8,5 milioni
- L'utile operativo è aumentato di $0,7 milioni, arrivando a $18,1 milioni
- L'EBITDA rettificato a livello di ristorante è salito di $1,8 milioni, toccando i $44,6 milioni
- L'EBITDA rettificato è aumentato di $0,6 milioni, raggiungendo i $29,9 milioni
Portillo's ha aperto due nuovi ristoranti nel secondo trimestre del 2024 e prevede di aprire almeno 10 nuove sedi nel 2024. L'azienda ha aggiornato i suoi obiettivi fiscali per il 2024, prevedendo vendite negli stessi ristoranti stabili o leggermente positive e mantenendo la previsione del margine EBITDA rettificato a livello di ristorante tra il 23% e il 24%.
Portillo's Inc. (NASDAQ: PTLO) informó sus resultados financieros del segundo trimestre de 2024, mostrando un aumento del 7,5% en los ingresos totales a $181,9 millones. La compañía experimentó una disminución del 0,6% en las ventas de restaurantes comparables, pero observó mejoras en el ingreso operativo, el EBITDA ajustado a nivel de restaurante y el EBITDA ajustado. Los aspectos más destacados incluyen:
- El ingreso neto disminuyó en $1,4 millones a $8,5 millones
- El ingreso operativo aumentó en $0,7 millones a $18,1 millones
- El EBITDA ajustado a nivel de restaurante subió en $1,8 millones a $44,6 millones
- El EBITDA ajustado aumentó en $0,6 millones a $29,9 millones
Portillo's abrió dos nuevos restaurantes en el segundo trimestre de 2024 y planea abrir al menos 10 nuevas ubicaciones en 2024. La compañía actualizó sus objetivos fiscales de 2024, proyectando ventas de restaurantes comparables estables o ligeramente positivas y manteniendo su pronóstico de margen EBITDA ajustado a nivel de restaurante del 23% al 24%.
Portillo's Inc. (NASDAQ: PTLO)는 2024년 2분기 재무 결과를 발표했습니다. 여기에서는 총 매출이 7.5% 증가하여 1억 8190만 달러에 달했다고 보도했습니다. 회사는 동일 매장 판매가 0.6% 감소했지만, 운영 소득, 레스토랑 수준의 조정 EBITDA 및 조정 EBITDA에서 개선이 있었습니다. 주요 하이라이트는 다음과 같습니다:
- 순이익은 140만 달러 감소하여 850만 달러가 되었습니다.
- 운영 소득은 70만 달러 증가하여 1810만 달러에 이릅니다.
- 레스토랑 수준의 조정 EBITDA는 180만 달러 증가하여 4460만 달러에 도달했습니다.
- 조정 EBITDA는 60만 달러 증가하여 2990만 달러가 되었습니다.
Portillo's는 2024년 2분기에 두 개의 새로운 레스토랑을 열었으며, 2024년에 최소 10개의 새로운 위치를 열 계획입니다. 이 회사는 2024년 재정 목표를 업데이트하며, 동일 매장 판매가 평탄하거나 약간 긍정적일 것으로 예상하고 있으며, 레스토랑 수준의 조정 EBITDA 마진 예측을 23-24%로 유지하고 있습니다.
Portillo's Inc. (NASDAQ: PTLO) a annoncé ses résultats financiers pour le deuxième trimestre de 2024, montrant une augmentation de 7,5% des revenus totaux à 181,9 millions de dollars. L'entreprise a connu une baisse de 0,6% des ventes dans les mêmes restaurants, mais a observé des améliorations dans le revenu d'exploitation, l'EBITDA ajusté au niveau du restaurant et l'EBITDA ajusté global. Les points saillants incluent :
- Le revenu net a diminué de 1,4 million de dollars pour atteindre 8,5 millions de dollars
- Le revenu d'exploitation a augmenté de 0,7 million de dollars pour atteindre 18,1 millions de dollars
- L'EBITDA ajusté au niveau du restaurant a grimpé de 1,8 million de dollars pour atteindre 44,6 millions de dollars
- L'EBITDA ajusté a augmenté de 0,6 million de dollars pour atteindre 29,9 millions de dollars
Portillo's a ouvert deux nouveaux restaurants au deuxième trimestre de 2024 et prévoit d'ouvrir au moins 10 nouveaux établissements en 2024. L'entreprise a mis à jour ses objectifs fiscaux pour 2024, prévoyant des ventes stables ou légèrement positives dans les même restaurants et maintenant ses prévisions de marge d'EBITDA ajusté au niveau des restaurants entre 23 et 24%.
Portillo's Inc. (NASDAQ: PTLO) hat seine Finanzzahlen für das zweite Quartal 2024 veröffentlicht und einen Anstieg der Gesamterlöse um 7,5% auf 181,9 Millionen Dollar verzeichnet. Das Unternehmen erlebte einen Rückgang der Same-Restaurant-Verkäufe um 0,6%, konnte jedoch Verbesserungen beim Betriebsergebnis, dem Restaurant-Level Adjusted EBITDA und dem Adjusted EBITDA verzeichnen. Die wichtigsten Highlights umfassen:
- Der Nettogewinn sank um 1,4 Millionen Dollar auf 8,5 Millionen Dollar
- Das Betriebsergebnis stieg um 0,7 Millionen Dollar auf 18,1 Millionen Dollar
- Das Restaurant-Level Adjusted EBITDA stieg um 1,8 Millionen Dollar auf 44,6 Millionen Dollar
- Das Adjusted EBITDA erhöhte sich um 0,6 Millionen Dollar auf 29,9 Millionen Dollar
Portillo's eröffnete im zweiten Quartal 2024 zwei neue Restaurants und plant, im Jahr 2024 mindestens 10 neue Standorte zu eröffnen. Das Unternehmen hat seine finanziellen Ziele für 2024 aktualisiert und prognostiziert stabile bis leicht positive Same-Restaurant-Verkäufe, während es die EBITDA-Margenprognose auf Restaurant-Ebene von 23-24% beibehält.
- Total revenue increased by 7.5% to $181.9 million
- Operating income rose by $0.7 million to $18.1 million
- Restaurant-Level Adjusted EBITDA increased by $1.8 million to $44.6 million
- Adjusted EBITDA grew by $0.6 million to $29.9 million
- Company on track to open at least 10 new restaurants in 2024
- Successful lowering of build costs for new restaurants
- Same-restaurant sales decreased by 0.6%
- Net income declined by $1.4 million to $8.5 million
- Commodity inflation increased to 6.9% from 5.5% in the previous year
- Transactions decreased by 2.3% in same-restaurant sales
Insights
Portillo's Q2 2024 results show mixed performance. While total revenue increased by
The company's profitability metrics present a nuanced picture. Operating income increased slightly, but net income decreased by
Portillo's expansion plans remain on track, with at least 10 new restaurants planned for 2024. The company's focus on optimizing restaurant footprint and lowering build costs could potentially improve future returns on investment.
The
The company's pricing strategy is worth noting. With a
Portillo's updated fiscal 2024 targets, particularly the revision of same-restaurant sales from low-single digits to 'flat to slightly positive', reflect a more cautious outlook. This adjustment, combined with the reduction in projected capital expenditures, suggests the company is adopting a more conservative approach in response to current market conditions.
Portillo's performance reflects broader industry challenges, including inflationary pressures and changing consumer behavior. The
The company's focus on strategic pillars unveiled in Q1 2024 appears to be yielding some positive results, as evidenced by improvements in total revenue, operating income and Adjusted EBITDA. However, the decline in net income suggests that profitability remains a challenge.
Portillo's expansion strategy, particularly its entry into new markets like Texas and Michigan, is a key growth driver. The success of these new locations will be important for offsetting the softer performance in existing restaurants. The company's emphasis on optimizing restaurant footprint and reducing build costs could enhance the long-term viability of this expansion strategy, potentially leading to improved returns on investment.
CHICAGO, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Portillo’s Inc. (“Portillo’s” or the “Company”) (NASDAQ: PTLO), the fast-casual restaurant concept known for its menu of Chicago-style favorites, today reported financial results for the second quarter ended June 30, 2024.
Michael Osanloo, President and Chief Executive Officer of Portillo’s, said, “We delivered sequential improvement in both revenue and margin this quarter as we continued to prioritize sales and transaction growth. We are confident that our strategic plan is focused on the right factors, allowing us to navigate near-term challenges and seize opportunities for continuous improvement. We're now on track to open at least 10 restaurants in 2024, including three full-service locations with an optimized footprint. We continue to successfully lower our build costs as we bring these restaurants online, which will support industry-leading returns on investment.”
Financial Highlights for the Second Quarter 2024 vs. Second Quarter 2023:
- Total revenue increased
7.5% or$12.7 million to$181.9 million ; - Same-restaurant sales* decreased
0.6% ; - Operating income increased
$0.7 million to$18.1 million ; - Net income decreased
$1.4 million to$8.5 million ; - Restaurant-Level Adjusted EBITDA** increased
$1.8 million to$44.6 million ; and - Adjusted EBITDA** increased
$0.6 million to$29.9 million .
*For the quarter ended June 30, 2024, same-restaurant sales compares the 13 weeks from April 1, 2024 through June 30, 2024 to the 13 weeks from April 3, 2023 through July 2, 2023.
**Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are non-GAAP measures. Please see definitions and the reconciliations of these non-GAAP measures accompanying this release.
Recent Developments and Trends
In the quarter, total revenue grew
In June, we re-tiered some of our restaurants in higher-cost areas, contributing to an effective price increase of approximately
In the quarter ended June 30, 2024, commodity inflation was
In the quarter ended June 30, 2024, total revenue, operating income, Restaurant-Level Adjusted EBITDA, and Adjusted EBITDA all improved, while net income decreased, versus the prior year. We believe this improvement stemmed from concentrating on the four strategic pillars we unveiled in our Q1 2024 earnings call.
Review of Second Quarter 2024 Financial Results
Revenues for the quarter ended June 30, 2024 were
Total restaurant operating expenses for the second quarter ended June 30, 2024 were
General and administrative expenses for the second quarter ended June 30, 2024 were
Operating income for the second quarter ended June 30, 2024 was
Net income for the second quarter ended June 30, 2024 was
Restaurant-Level Adjusted EBITDA* for the second quarter ended June 30, 2024 was
Adjusted EBITDA* for the second quarter ended June 30, 2024 was
*A reconciliation of Restaurant-Level Adjusted EBITDA and Adjusted EBITDA and the nearest GAAP financial measure is included under “Non-GAAP Measures” in the accompanying financial data below.
Development Highlights
During the two quarters ended June 30, 2024, we opened two restaurants in the Texas and Arizona markets. Subsequent to June 30, 2024, we opened two new restaurants in Livonia, Michigan and in Mansfield, Texas, bringing our total restaurant count to 88, including a restaurant owned by C&O of which Portillo’s owns
Below are the restaurants opened since the beginning of fiscal 2024:
Location | Opening Date | Fiscal Quarter Opened |
Denton, Texas | March 2024 | Q1 2024 |
Surprise, Arizona | May 2024 | Q2 2024 |
Livonia, Michigan | July 2024 | Q3 2024 |
Mansfield, Texas | August 2024 | Q3 2024 |
Fiscal 2024 Financial Targets
Based on current expectations, we are providing updated financial targets for 2024 as follows:
Prior Target | Current Target | ||
Unit growth | 9+ new units | → | 10+ new units |
Same-restaurant sales* | low-single digits | → | Flat to slightly positive |
Commodity inflation* | mid-single digits | → | mid-single digits |
Labor inflation* | mid-single digits | → | mid-single digits |
Restaurant-level adjusted EBITDA margin** | → | ||
General and administrative expenses | → | ||
Pre-opening expenses | → | ||
Capital expenditures | → |
*Prior target communicated during earnings call.
**We are unable to reconcile the long-term outlook for restaurant-level adjusted EBITDA margin to operating income/loss margin, the corresponding U.S. GAAP measure, due to variability and difficulty in making accurate forecasts and projections and because not all information necessary to prepare the reconciliation is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information because we cannot accurately predict all of the components of the adjusted calculations and the non-GAAP measure may be materially different than the GAAP measure.
Long-Term Financial Targets
Unit growth | |
Same-restaurant sales | Low single digits |
Revenue growth | Mid teens |
Adjusted EBITDA growth* | Low teens |
*We are unable to reconcile the long-term outlook for adjusted EBITDA growth to net income/loss, the corresponding U.S. GAAP measure, due to variability and difficulty in making accurate forecasts and projections and because not all information necessary to prepare the reconciliation is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information because we cannot accurately predict all of the components of the adjusted calculations and the non-GAAP measure may be materially different than the GAAP measure.
The following definitions apply to these terms as used in this release:
Change in Same-Restaurant Sales - The change in same-restaurant sales is the percentage change in year-over-year revenue (excluding gift card breakage) for the Comparable Restaurant Base, which is defined as the number of restaurants open for at least 24 full fiscal periods. For the quarters ended June 30, 2024 and June 25, 2023, there were 70 and 66 restaurants in our Comparable Restaurant Base, respectively.
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.
Average Unit Volume - AUV is the total revenue (excluding gift card breakage) recognized in the Comparable Restaurant Base, including C&O, divided by the number of restaurants in the Comparable Restaurant Base, including C&O, by period.
This key performance indicator allows management to assess changes in consumer spending patterns at our restaurants and the overall performance of our restaurant base.
Adjusted EBITDA and Adjusted EBITDA Margin - Adjusted EBITDA represents net income (loss) 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 (loss), the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues, net. See also “Non-GAAP Financial Measures.”
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin - Restaurant-Level Adjusted EBITDA is defined as revenue, less restaurant operating expenses, which include food, beverage and packaging costs, labor expenses, occupancy expenses and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenues, net. See also “Non-GAAP Financial Measures”.
For more information about the Company’s Non-GAAP measures, how they are calculated and reconciled and why management believes that they are useful, see “Non-GAAP Financial Measures” below.
Earnings Conference Call
The Company will host a conference call to discuss its financial results for the second quarter ended June 30, 2024 on Tuesday, August 6, 2024, at 10:00 AM ET. The conference call can be accessed live over the phone by dialing 201-493-6780. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 412-317-6671; the passcode is 13741635. The webcast will be available at www.portillos.com under the investors section and will be archived on the site shortly after the call has concluded.
About Portillo’s
In 1963, Dick Portillo invested
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business, and are based on currently available operating, financial and competitive information which are subject to various risks and uncertainties, so you should not place undue reliance on forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "commit," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other similar expressions.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:
- risks related to or arising from our organizational structure;
- risks of food-borne illness and food safety and other health concerns about our food;
- risks relating to the economy and financial markets, including inflation, fluctuating interest rates, stock market activity, or other factors;
- the impact of unionization activities of our Team Members on our reputation, operations and profitability;
- risks associated with our reliance on certain information technology systems, including our new enterprise resource planning system, and potential failures or interruptions;
- privacy and cyber security risks related to our digital ordering and payment platforms for our delivery business;
- the impact of competition, including from our competitors in the restaurant industry or our own restaurants;
- the increasingly competitive labor market and our ability to attract and retain the best talent and qualified employees;
- the impact of federal, state or local government regulations relating to privacy, data protection, advertising and consumer protection, building and zoning requirements, costs or ability to open new restaurants, or sale of food and alcoholic beverage control regulations;
- inability to achieve our growth strategy, such as the availability of suitable new restaurant sites in existing and new markets and opening of new restaurants at the anticipated rate and on the anticipated timeline;
- the impact of consumer sentiment and other economic factors on our sales;
- increases in food and other operating costs, tariffs and import taxes, and supply shortages; and
- other risks identified in our filings with the Securities and Exchange Commission (the “SEC’).
All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in the Company’s most recent Annual Report on Form 10-K, filed with the SEC. All of the Company’s SEC filings are available on the SEC’s website at www.sec.gov. The forward-looking statements included in this press release are made only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Investor Contact:
Barbara Noverini, CFA
investors@portillos.com
Media Contact:
ICR, Inc.
portillosPR@icrinc.com
PORTILLO’S INC CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except common share and per common share data) | |||||||||||||||||||||||||||
Quarter Ended | Two Quarters Ended | ||||||||||||||||||||||||||
June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 | ||||||||||||||||||||||||
REVENUES, NET | $ | 181,862 | 100.0 | % | $ | 169,182 | 100.0 | % | $ | 347,693 | 100.0 | % | $ | 325,242 | 100.0 | % | |||||||||||
COST AND EXPENSES: | |||||||||||||||||||||||||||
Restaurant operating expenses: | |||||||||||||||||||||||||||
Food, beverage and packaging costs | 61,712 | 33.9 | % | 56,229 | 33.2 | % | 118,673 | 34.1 | % | 109,856 | 33.8 | % | |||||||||||||||
Labor | 46,412 | 25.5 | % | 43,153 | 25.5 | % | 89,714 | 25.8 | % | 83,612 | 25.7 | % | |||||||||||||||
Occupancy | 9,211 | 5.1 | % | 8,237 | 4.9 | % | 18,551 | 5.3 | % | 16,688 | 5.1 | % | |||||||||||||||
Other operating expenses | 19,958 | 11.0 | % | 18,832 | 11.1 | % | 39,815 | 11.5 | % | 37,536 | 11.5 | % | |||||||||||||||
Total restaurant operating expenses | 137,293 | 75.5 | % | 126,451 | 74.7 | % | 266,753 | 76.7 | % | 247,692 | 76.2 | % | |||||||||||||||
General and administrative expenses | 17,941 | 9.9 | % | 19,609 | 11.6 | % | 36,481 | 10.5 | % | 38,387 | 11.8 | % | |||||||||||||||
Pre-opening expenses | 2,100 | 1.2 | % | 275 | 0.2 | % | 3,523 | 1.0 | % | 2,619 | 0.8 | % | |||||||||||||||
Depreciation and amortization | 7,106 | 3.9 | % | 5,941 | 3.5 | % | 14,050 | 4.0 | % | 11,610 | 3.6 | % | |||||||||||||||
Net income attributable to equity method investment | (335 | ) | (0.2)% | (381 | ) | (0.2)% | (540 | ) | (0.2)% | (588 | ) | (0.2)% | |||||||||||||||
Other income, net | (358 | ) | (0.2)% | (97 | ) | (0.1)% | (786 | ) | (0.2)% | (354 | ) | (0.1)% | |||||||||||||||
OPERATING INCOME | 18,115 | 10.0 | % | 17,384 | 10.3 | % | 28,212 | 8.1 | % | 25,876 | 8.0 | % | |||||||||||||||
Interest expense | 6,603 | 3.6 | % | 6,523 | 3.9 | % | 13,133 | 3.8 | % | 13,966 | 4.3 | % | |||||||||||||||
Interest income | (75 | ) | — | % | — | — | % | (154 | ) | — | % | — | — | % | |||||||||||||
Tax Receivable Agreement liability adjustment | (439 | ) | (0.2)% | (579 | ) | (0.3)% | (1,000 | ) | (0.3)% | (1,163 | ) | (0.4)% | |||||||||||||||
Loss on debt extinguishment | — | — | % | — | — | % | — | — | % | 3,465 | 1.1 | % | |||||||||||||||
INCOME BEFORE INCOME TAXES | 12,026 | 6.6 | % | 11,440 | 6.8 | % | 16,233 | 4.7 | % | 9,608 | 3.0 | % | |||||||||||||||
Income tax expense | 3,496 | 1.9 | % | 1,542 | 0.9 | % | 2,359 | 0.7 | % | 983 | 0.3 | % | |||||||||||||||
NET INCOME | 8,530 | 4.7 | % | 9,898 | 5.9 | % | 13,874 | 4.0 | % | 8,625 | 2.7 | % | |||||||||||||||
Net income attributable to non-controlling interests | 2,060 | 1.1 | % | 3,110 | 1.8 | % | 2,842 | 0.8 | % | 2,351 | 0.7 | % | |||||||||||||||
NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. | $ | 6,470 | 3.6 | % | $ | 6,788 | 4.0 | % | $ | 11,032 | 3.2 | % | $ | 6,274 | 1.9 | % | |||||||||||
Income per common share attributable to Portillo’s Inc.: | |||||||||||||||||||||||||||
Basic | $ | 0.10 | $ | 0.12 | $ | 0.19 | $ | 0.12 | |||||||||||||||||||
Diluted | $ | 0.10 | $ | 0.12 | $ | 0.18 | $ | 0.11 | |||||||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||||||
Basic | 61,650,118 | 54,964,649 | 59,543,950 | 52,252,053 | |||||||||||||||||||||||
Diluted | 64,608,698 | 58,550,057 | 62,577,748 | 55,806,455 |
PORTILLO’S INC. CONSOLIDATED BALANCE SHEETS (in thousands, except common share and per common share data) | |||||
June 30, 2024 | December 31, 2023 | ||||
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents and restricted cash | $ | 12,357 | $ | 10,438 | |
Accounts and tenant improvement receivables | 15,326 | 14,183 | |||
Inventory | 8,755 | 8,733 | |||
Prepaid expenses | 5,507 | 8,565 | |||
Total current assets | 41,945 | 41,919 | |||
Property and equipment, net | 314,617 | 295,793 | |||
Operating lease assets | 213,757 | 193,825 | |||
Goodwill | 394,298 | 394,298 | |||
Trade names | 223,925 | 223,925 | |||
Other intangible assets, net | 27,467 | 28,911 | |||
Equity method investment | 15,940 | 16,684 | |||
Deferred tax assets | 200,119 | 184,701 | |||
Other assets | 6,850 | 5,485 | |||
Total other assets | 868,599 | 854,004 | |||
TOTAL ASSETS | $ | 1,438,918 | $ | 1,385,541 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
CURRENT LIABILITIES: | |||||
Accounts payable | $ | 37,584 | $ | 33,189 | |
Current portion of long-term debt | 9,375 | 7,500 | |||
Short-term debt | 17,000 | 15,000 | |||
Current portion of Tax Receivable Agreement liability | 7,230 | 4,428 | |||
Deferred revenue | 4,712 | 7,180 | |||
Short-term lease liability | 5,791 | 5,577 | |||
Accrued expenses | 27,573 | 32,039 | |||
Total current liabilities | 109,265 | 104,913 | |||
LONG-TERM LIABILITIES: | |||||
Long-term debt, net of current portion | 278,679 | 283,923 | |||
Tax Receivable Agreement liability | 320,849 | 295,390 | |||
Long-term lease liability | 263,229 | 238,414 | |||
Other long-term liabilities | 2,774 | 2,791 | |||
Total long-term liabilities | 865,531 | 820,518 | |||
Total liabilities | 974,796 | 925,431 | |||
COMMITMENTS AND CONTINGENCIES | |||||
STOCKHOLDER’S EQUITY: | |||||
Preferred stock, | — | — | |||
Class A common stock, | 617 | 555 | |||
Class B common stock, | — | — | |||
Additional paid-in-capital | 344,937 | 308,212 | |||
Retained earnings | 24,644 | 13,612 | |||
Total stockholders' equity attributable to Portillo's Inc. | 370,198 | 322,379 | |||
Non-controlling interest | 93,924 | 137,731 | |||
Total stockholders' equity | 464,122 | 460,110 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,438,918 | $ | 1,385,541 |
PORTILLO’S INC CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||
Two Quarters Ended | |||||||
June 30, 2024 | June 25, 2023 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 13,874 | $ | 8,625 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 14,050 | 11,610 | |||||
Amortization of debt issuance costs and discount | 380 | 620 | |||||
Loss on sales of assets | 66 | 496 | |||||
Equity-based compensation | 5,717 | 7,720 | |||||
Deferred income tax expense | 2,359 | 983 | |||||
Tax Receivable Agreement liability adjustment | (1,000 | ) | (1,163 | ) | |||
Gift card breakage | (502 | ) | (528 | ) | |||
Loss on debt extinguishment | — | 3,465 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivables | (681 | ) | (906 | ) | |||
Receivables from related parties | (158 | ) | (141 | ) | |||
Inventory | (22 | ) | 894 | ||||
Other current assets | 1,916 | (218 | ) | ||||
Operating lease asset | 4,461 | 3,880 | |||||
Accounts payable | 6,833 | (2,779 | ) | ||||
Accrued expenses and other liabilities | (6,365 | ) | (559 | ) | |||
Operating lease liabilities | (1,908 | ) | (1,359 | ) | |||
Deferred lease incentives | 2,101 | 850 | |||||
Other assets and liabilities | 507 | (181 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 41,628 | 31,309 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment | (33,905 | ) | (37,359 | ) | |||
Proceeds from the sale of property and equipment | 77 | 33 | |||||
NET CASH USED IN INVESTING ACTIVITIES | (33,828 | ) | (37,326 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from short-term debt, net | 2,000 | 10,000 | |||||
Proceeds from long-term debt | — | 300,000 | |||||
Payments of long-term debt | (3,750 | ) | (322,428 | ) | |||
Proceeds from equity offering, net of underwriting discounts | 114,960 | 179,306 | |||||
Repurchase of outstanding equity / Portillo's OpCo units | (114,960 | ) | (179,306 | ) | |||
Distributions paid to non-controlling interest holders | (838 | ) | (399 | ) | |||
Proceeds from stock option exercises | 1,109 | 1,015 | |||||
Employee withholding taxes related to net settled equity awards | (279 | ) | (56 | ) | |||
Proceeds from Employee Stock Purchase Plan purchases | 306 | 297 | |||||
Payments of Tax Receivable Agreement liability | (4,429 | ) | (813 | ) | |||
Payment of deferred financing costs | — | (3,569 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (5,881 | ) | (15,953 | ) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 1,919 | (21,970 | ) | ||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 10,438 | 44,427 | |||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | $ | 12,357 | $ | 22,457 |
PORTILLO’S INC SELECTED OPERATING DATA AND NON-GAAP FINANCIAL MEASURES | |||||||||||||||
Quarter Ended | Two Quarters Ended | ||||||||||||||
June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 | ||||||||||||
Total Restaurants (a) | 86 | 76 | 86 | 76 | |||||||||||
AUV (in millions) (a) | N/A | N/A | $ | 9.0 | $ | 8.8 | |||||||||
Change in same-restaurant sales (b)(c) | (0.6) | % | 5.9 | % | (0.9 | )% | 7.4 | % | |||||||
Adjusted EBITDA (in thousands) (b) | $ | 29,866 | $ | 29,223 | $ | 51,643 | $ | 48,856 | |||||||
Adjusted EBITDA Margin (b) | 16.4 | % | 17.3 | % | 14.9 | % | 15.0 | % | |||||||
Restaurant-Level Adjusted EBITDA (in thousands) (b) | $ | 44,569 | $ | 42,731 | $ | 80,940 | $ | 77,550 | |||||||
Restaurant-Level Adjusted EBITDA Margin (b) | 24.5 | % | 25.3 | % | 23.3 | % | 23.8 | % |
(a) Includes a restaurant that is owned by C&O of which Portillo’s owns
(b) Excludes a restaurant that is owned by C&O of which Portillo’s owns
(c) For the quarter ended June 30, 2024, same-restaurant sales compares the 13 weeks from April 1, 2024 through June 30, 2024 to the 13 weeks from April 3, 2023 through July 2, 2023. For the two quarters ended June 30, 2024, same-restaurant sales compares the 26 weeks from January 1, 2024 through June 30, 2024 to the 26 weeks from January 2, 2023 through July 2, 2023.
PORTILLO’S INC.
NON-GAAP FINANCIAL MEASURES
To supplement the consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA Margin, and Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin. Accordingly, Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are not required by, nor presented in accordance with GAAP, but rather are supplemental measures of operating performance of our restaurants. You should be aware that these measures are not indicative of overall results for the Company and that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin do not accrue directly to the benefit of stockholders because of corporate-level expenses excluded from such measures. These measures are supplemental measures of operating performance and our calculations thereof may not be comparable to similar measures reported by other companies. These measures are important measures to evaluate the performance and profitability of our restaurants, individually and in the aggregate, but also have important limitations as analytical tools and should not be considered in isolation as substitutes for analysis of our results as reported under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents net income (loss) 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 (loss), the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of total revenues.
We use Adjusted EBITDA and Adjusted EBITDA Margin (i) to evaluate our operating results and the effectiveness of our business strategies, (ii) internally as benchmarks to compare our performance to that of our competitors and (iii) as factors in evaluating management’s performance when determining incentive compensation.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important measures of operating performance because they eliminate the impact of expenses that do not relate to our core operating performance.
We are unable to reconcile the long-term outlook for Adjusted EBITDA to net income (loss), the corresponding U.S. GAAP measure, due to variability and difficulty in making accurate forecasts and projections and because not all information necessary to prepare the reconciliation is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information because we cannot accurately predict all of the components of the adjusted calculations and the non-GAAP measure may be materially different than the GAAP measure.
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin
Restaurant-Level Adjusted EBITDA is defined as revenue, less restaurant operating expenses, which include cost of goods sold (excluding depreciation and amortization), labor expenses, occupancy expenses and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenue.
We believe that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are important measures to evaluate the performance and profitability of our restaurants, individually and in the aggregate.
See below for a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA and Adjusted EBITDA Margin (in thousands):
Quarter Ended | Two Quarters Ended | ||||||||||||||
June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 | ||||||||||||
Net income | $ | 8,530 | $ | 9,898 | $ | 13,874 | $ | 8,625 | |||||||
Net income margin | 4.7 | % | 5.9 | % | 4.0 | % | 2.7 | % | |||||||
Depreciation and amortization | 7,106 | 5,941 | 14,050 | 11,610 | |||||||||||
Interest expense | 6,603 | 6,523 | 13,133 | 13,966 | |||||||||||
Interest income | (75 | ) | — | (154 | ) | — | |||||||||
Loss on debt extinguishment | — | — | — | 3,465 | |||||||||||
Income tax expense | 3,496 | 1,542 | 2,359 | 983 | |||||||||||
EBITDA | 25,660 | 23,904 | 43,262 | 38,649 | |||||||||||
Deferred rent (1) | 1,296 | 1,169 | 2,466 | 2,393 | |||||||||||
Equity-based compensation | 2,890 | 4,184 | 5,717 | 7,720 | |||||||||||
ERP implementation costs (2) | 325 | — | 450 | — | |||||||||||
Amortization of cloud-based software implementation costs (3) | 146 | — | 146 | — | |||||||||||
Other (income) loss (4) | (9 | ) | 377 | 66 | 496 | ||||||||||
Transaction-related fees and expenses (5) | (3 | ) | 168 | 536 | 761 | ||||||||||
Tax Receivable Agreement liability adjustment (6) | (439 | ) | (579 | ) | (1,000 | ) | (1,163 | ) | |||||||
Adjusted EBITDA | $ | 29,866 | $ | 29,223 | $ | 51,643 | $ | 48,856 | |||||||
Adjusted EBITDA Margin (7) | 16.4 | % | 17.3 | % | 14.9 | % | 15.0 | % |
(1) Represents the difference between cash rent payments and the recognition of straight-line rent expense recognized over the lease term.
(2) Represents non-capitalized third-party consulting and software licensing costs incurred in connection with the implementation of a new ERP system.
(3) Represents amortization of capitalized cloud-based ERP system implementation costs that are included within general and administrative expenses.
(4) Represents (gain) loss on disposal of property and equipment.
(5) Represents certain expenses that management believes are not indicative of ongoing operations, consisting primarily of certain professional fees.
(6) Represents remeasurement of the Tax Receivable Agreement liability.
(7) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Revenues, net.
See below for a reconciliation of operating income, the most directly comparable GAAP measure, to Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin (in thousands):
Quarter Ended | Two Quarters Ended | ||||||||||||||
June 30, 2024 | June 25, 2023 | June 30, 2024 | June 25, 2023 | ||||||||||||
Operating income | $ | 18,115 | $ | 17,384 | $ | 28,212 | $ | 25,876 | |||||||
Operating income margin | 10.0 | % | 10.3 | % | 8.1 | % | 8.0 | % | |||||||
Plus: | |||||||||||||||
General and administrative expenses | 17,941 | 19,609 | 36,481 | 38,387 | |||||||||||
Pre-opening expenses | 2,100 | 275 | 3,523 | 2,619 | |||||||||||
Depreciation and amortization | 7,106 | 5,941 | 14,050 | 11,610 | |||||||||||
Net income attributable to equity method investment | (335 | ) | (381 | ) | (540 | ) | (588 | ) | |||||||
Other income, net | (358 | ) | (97 | ) | (786 | ) | (354 | ) | |||||||
Restaurant-Level Adjusted EBITDA | $ | 44,569 | $ | 42,731 | $ | 80,940 | $ | 77,550 | |||||||
Restaurant-Level Adjusted EBITDA Margin (1) | 24.5 | % | 25.3 | % | 23.3 | % | 23.8 | % |
(1) Restaurant-Level Adjusted EBITDA Margin is defined as Restaurant-Level Adjusted EBITDA divided by Revenues, net
FAQ
What was Portillo's (PTLO) total revenue for Q2 2024?
How did Portillo's (PTLO) same-restaurant sales perform in Q2 2024?
How many new restaurants does Portillo's (PTLO) plan to open in 2024?