Portillo’s Inc. Announces Third Quarter 2024 Financial Results
Portillo's (NASDAQ: PTLO) reported Q3 2024 financial results with mixed performance. Total revenue increased 6.9% to $178.3 million, while same-restaurant sales decreased 0.9%. Net income rose by $2.2 million to $8.8 million. The company faced challenges with a 3.5% decrease in transactions, partially offset by a 2.6% increase in average check driven by menu price increases. Portillo's opened four new restaurants during the first three quarters of 2024, with plans to open five more by year-end. The company updated its 2024 guidance, projecting approximately -1.0% same-restaurant sales and maintaining its Restaurant-Level Adjusted EBITDA margin target of 23-24%.
Portillo's (NASDAQ: PTLO) ha riportato i risultati finanziari del terzo trimestre 2024 con una performance mista. Il fatturato totale è aumentato del 6,9% a 178,3 milioni di dollari, mentre le vendite nei ristoranti comparabili sono diminuite dello 0,9%. L'utile netto è aumentato di 2,2 milioni di dollari, raggiungendo 8,8 milioni di dollari. L'azienda ha affrontato delle sfide con una diminuzione del 3,5% nel numero di transazioni, parzialmente compensata da un aumento del 2,6% nella spesa media per cliente, sostenuto dagli aumenti di prezzo del menu. Portillo's ha aperto quattro nuovi ristoranti durante i primi tre trimestri del 2024, con piani per aprirne altri cinque entro la fine dell'anno. L'azienda ha aggiornato le sue previsioni per il 2024, prevedendo una variazione delle vendite nei ristoranti comparabili di circa -1,0% e mantenendo il suo obiettivo di margine EBITDA rettificato a livello ristorante del 23-24%.
Portillo's (NASDAQ: PTLO) reportó los resultados financieros del tercer trimestre de 2024 con un desempeño mixto. Los ingresos totales aumentaron un 6.9% a 178.3 millones de dólares, mientras que las ventas en restaurantes comparables disminuyeron un 0.9%. El ingreso neto subió en 2.2 millones de dólares, alcanzando 8.8 millones de dólares. La empresa enfrentó desafíos con una disminución del 3.5% en transacciones, compensado en parte por un aumento del 2.6% en el ticket promedio impulsado por los incrementos de precio en el menú. Portillo's abrió cuatro nuevos restaurantes durante los primeros tres trimestres de 2024 y planea abrir cinco más para fin de año. La compañía actualizó sus pronósticos para 2024, proyectando aproximadamente un -1.0% en ventas en restaurantes comparables y manteniendo su objetivo de margen EBITDA ajustado a nivel de restaurante del 23-24%.
포르틸로스 (NASDAQ: PTLO)는 2024년 3분기 재무 결과를 혼합된 실적으로 보고했습니다. 총 수익은 1억 7,830만 달러로 6.9% 증가했으며, 동일 매장 매출은 0.9% 감소했습니다. 순이익은 220만 달러 증가하여 880만 달러에 달했습니다. 회사는 거래 수가 3.5% 감소하는 어려움을 겪었지만, 메뉴 가격 인상으로 인한 평균 결제 금액의 2.6% 증가로 부분적으로 상쇄되었습니다. 포르틸로스는 2024년 첫 세 분기 동안 네 개의 새 레스토랑을 열었으며, 연말까지 다섯 개의 추가 레스토랑을 열 계획입니다. 회사는 2024년 가이던스를 업데이트하여 동일 매장 매출이 약 -1.0%가 될 것으로 예측하고, 레스토랑 수준 조정 EBITDA 마진 목표를 23-24%로 유지하고 있습니다.
Portillo's (NASDAQ: PTLO) a annoncé des résultats financiers pour le troisième trimestre 2024 avec une performance mixte. Le chiffre d'affaires total a augmenté de 6,9% pour atteindre 178,3 millions de dollars, tandis que les ventes dans les restaurants comparables ont diminué de 0,9%. Le bénéfice net a augmenté de 2,2 millions de dollars pour atteindre 8,8 millions de dollars. L'entreprise a rencontré des difficultés avec une diminution de 3,5% des transactions, partiellement compensée par une augmentation de 2,6% du ticket moyen due aux hausses de prix du menu. Portillo's a ouvert quatre nouveaux restaurants au cours des trois premiers trimestres de 2024, avec des plans pour en ouvrir cinq autres d'ici la fin de l'année. L'entreprise a mis à jour ses prévisions pour 2024, projetant une baisse d'environ -1,0% des ventes dans les restaurants comparables tout en maintenant son objectif de marge EBITDA ajustée au niveau des restaurants entre 23-24%.
Portillo's (NASDAQ: PTLO) hat die finanziellen Ergebnisse für das dritte Quartal 2024 mit einer gemischten Leistung veröffentlicht. Der Gesamtumsatz stieg um 6,9% auf 178,3 Millionen Dollar, während die Umsätze in vergleichbaren Restaurants um 0,9% zurückgingen. Der Nettogewinn stieg um 2,2 Millionen Dollar auf 8,8 Millionen Dollar. Das Unternehmen hatte mit einem Rückgang der Transaktionen um 3,5% zu kämpfen, was teilweise durch einen Anstieg des durchschnittlichen Bestellwerts um 2,6% ausgeglichen wurde, der durch Preiserhöhungen auf der Speisekarte verursacht wurde. Portillo's eröffnete in den ersten drei Quartalen 2024 vier neue Restaurants und plant, bis zum Jahresende fünf weitere zu eröffnen. Das Unternehmen aktualisierte seine Prognose für 2024 und projizierte einen Rückgang der vergleichbaren Restaurantumsätze um etwa -1,0% und hielt sein Ziel für die bereinigte EBITDA-Marge auf Restaurantebene von 23-24% aufrecht.
- Total revenue increased 6.9% to $178.3 million
- Net income improved by $2.2 million to $8.8 million
- Operating income increased by $0.9 million to $16.0 million
- Successfully implemented menu price increases to address inflation
- Same-restaurant sales declined 0.9%
- Transaction count decreased 3.5%
- Commodity inflation rose to 3.6%
- Labor costs increased 0.3% as percentage of revenue
- Revised same-restaurant sales guidance downward to -1.0% for 2024
Insights
Portillo's Q3 2024 results present a mixed picture with some concerning trends. Total revenue grew
The company's revised guidance notably downgrades same-restaurant sales expectations from "flat to slightly positive" to approximately
The expansion strategy remains aggressive with 10 new units planned for 2024, focusing on key markets like Texas. However, the
The long-term targets of
CHICAGO, Nov. 05, 2024 (GLOBE NEWSWIRE) -- Portillo’s Inc. (“Portillo’s” or the “Company”) (NASDAQ: PTLO), the restaurant concept known for its menu of Chicago-style favorites, today reported financial results for the third quarter ended September 29, 2024.
Michael Osanloo, President and Chief Executive Officer of Portillo’s, said, “While our top line results for the quarter fell short of expectations, I’m proud of how our team protected margins and drove cash flow. We’re profitable, we’re controlling the levers we can, and we’re positioned for lasting, long-term growth.”
Financial Highlights for the Third Quarter 2024 vs. Third Quarter 2023:
- Total revenue increased
6.9% or$11.4 million to$178.3 million ; - Same-restaurant sales* decreased
0.9% ; - Operating income increased
$0.9 million to$16.0 million ; - Net income increased
$2.2 million to$8.8 million ; - Restaurant-Level Adjusted EBITDA** increased
$0.1 million to$41.9 million ; and - Adjusted EBITDA** increased
$0.6 million to$27.9 million .
*For the quarter ended September 29, 2024, same-restaurant sales compares the 13 weeks from July 1, 2024 through September 29, 2024 to the 13 weeks from July 3, 2023 through October 1, 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 ended September 29, 2024, total revenue grew
In the quarter ended September 29, 2024, commodity inflation was
In the quarter ended September 29, 2024, total revenue, operating income, net income, Restaurant-Level Adjusted EBITDA, and Adjusted EBITDA all improved versus the prior year. We believe this improvement stemmed from maintaining concentration on our four strategic pillars, which guide our short-term objectives and form the basis for long-term growth.
Review of Third Quarter 2024 Financial Results
Revenues for the quarter ended September 29, 2024 were
Total restaurant operating expenses for the third quarter ended September 29, 2024 were
General and administrative expenses for the third quarter ended September 29, 2024 were
Operating income for the third quarter ended September 29, 2024 was
Net income for the third quarter ended September 29, 2024 was
Restaurant-Level Adjusted EBITDA* for the third quarter ended September 29, 2024 and September 24, 2023 was
Adjusted EBITDA* for the third quarter ended September 29, 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 three quarters ended September 29, 2024, we opened four new restaurants. Subsequent to September 29, 2024, we opened one additional restaurant, bringing our total restaurant count to 89, 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 Month | 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 |
Richmond, Texas | October 2024 | Q4 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 | 10+ new units | → | 10 new units |
Same-restaurant sales | Flat to slightly positive | → | Approximately ( |
Commodity inflation | mid-single digits | → | mid-single digits |
Labor inflation | mid-single digits | → | Approximately |
Restaurant-level adjusted EBITDA margin* | → | ||
General and administrative expenses | → | ||
Pre-opening expenses | → | ||
Capital expenditures | → |
*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 September 29, 2024 and September 24, 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 third quarter ended September 29, 2024 on Tuesday, November 5, 2024, at 10:00 AM ET. The conference call can be accessed live over the phone by dialing 877-407-3982. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 412-317-6671; the passcode is 13741636. 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 Form 10-Q in the context of the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 27, 2024, and subsequent filings with the SEC, which are available on the SEC's website at www.sec.gov.
The forward-looking statements included in this Form 10-Q 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:
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 | Three Quarters Ended | ||||||||||||||||||||||||||
September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||||||||||||||
REVENUES, NET | $ | 178,252 | 100.0 | % | $ | 166,805 | 100.0 | % | $ | 525,945 | 100.0 | % | $ | 492,047 | 100.0 | % | |||||||||||
COST AND EXPENSES: | |||||||||||||||||||||||||||
Restaurant operating expenses: | |||||||||||||||||||||||||||
Food, beverage and packaging costs | 60,136 | 33.7 | % | 55,551 | 33.3 | % | 178,809 | 34.0 | % | 165,407 | 33.6 | % | |||||||||||||||
Labor | 45,945 | 25.8 | % | 42,588 | 25.5 | % | 135,659 | 25.8 | % | 126,200 | 25.6 | % | |||||||||||||||
Occupancy | 9,172 | 5.1 | % | 8,210 | 4.9 | % | 27,723 | 5.3 | % | 24,898 | 5.1 | % | |||||||||||||||
Other operating expenses | 21,053 | 11.8 | % | 18,571 | 11.1 | % | 60,868 | 11.6 | % | 56,107 | 11.4 | % | |||||||||||||||
Total restaurant operating expenses | 136,306 | 76.5 | % | 124,920 | 74.9 | % | 403,059 | 76.6 | % | 372,612 | 75.7 | % | |||||||||||||||
General and administrative expenses | 18,305 | 10.3 | % | 18,898 | 11.3 | % | 54,786 | 10.4 | % | 57,285 | 11.6 | % | |||||||||||||||
Pre-opening expenses | 1,747 | 1.0 | % | 2,410 | 1.4 | % | 5,270 | 1.0 | % | 5,029 | 1.0 | % | |||||||||||||||
Depreciation and amortization | 6,679 | 3.7 | % | 6,178 | 3.7 | % | 20,729 | 3.9 | % | 17,788 | 3.6 | % | |||||||||||||||
Net income attributable to equity method investment | (383 | ) | (0.2 | )% | (422 | ) | (0.3 | )% | (923 | ) | (0.2 | )% | (1,010 | ) | (0.2 | )% | |||||||||||
Other income, net | (390 | ) | (0.2 | )% | (276 | ) | (0.2 | )% | (1,176 | ) | (0.2 | )% | (630 | ) | (0.1 | )% | |||||||||||
OPERATING INCOME | 15,988 | 9.0 | % | 15,097 | 9.1 | % | 44,200 | 8.4 | % | 40,973 | 8.3 | % | |||||||||||||||
Interest expense | 6,450 | 3.6 | % | 6,573 | 3.9 | % | 19,583 | 3.7 | % | 20,539 | 4.2 | % | |||||||||||||||
Interest income | (50 | ) | — | % | (116 | ) | (0.1 | )% | (204 | ) | — | % | (116 | ) | — | % | |||||||||||
Tax Receivable Agreement liability adjustment | (1,724 | ) | (1.0 | )% | (528 | ) | (0.3 | )% | (2,724 | ) | (0.5 | )% | (1,691 | ) | (0.3 | )% | |||||||||||
Loss on debt extinguishment | — | — | % | — | — | % | — | — | % | 3,465 | 0.7 | % | |||||||||||||||
INCOME BEFORE INCOME TAXES | 11,312 | 6.3 | % | 9,168 | 5.5 | % | 27,545 | 5.2 | % | 18,776 | 3.8 | % | |||||||||||||||
Income tax expense | 2,539 | 1.4 | % | 2,622 | 1.6 | % | 4,898 | 0.9 | % | 3,605 | 0.7 | % | |||||||||||||||
NET INCOME | 8,773 | 4.9 | % | 6,546 | 3.9 | % | 22,647 | 4.3 | % | 15,171 | 3.1 | % | |||||||||||||||
Net income attributable to non-controlling interests | 1,553 | 0.9 | % | 2,185 | 1.3 | % | 4,395 | 0.8 | % | 4,536 | 0.9 | % | |||||||||||||||
NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. | $ | 7,220 | 4.1 | % | $ | 4,361 | 2.6 | % | $ | 18,252 | 3.5 | % | $ | 10,635 | 2.2 | % | |||||||||||
Income per common share attributable to Portillo’s Inc.: | |||||||||||||||||||||||||||
Basic | $ | 0.12 | $ | 0.08 | $ | 0.30 | $ | 0.20 | |||||||||||||||||||
Diluted | $ | 0.11 | $ | 0.07 | $ | 0.29 | $ | 0.19 | |||||||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||||||
Basic | 61,921,564 | 55,127,133 | 60,336,488 | 53,231,086 | |||||||||||||||||||||||
Diluted | 64,894,558 | 58,767,812 | 63,347,715 | 56,813,653 |
PORTILLO’S INC. CONSOLIDATED BALANCE SHEETS (in thousands, except common share and per common share data) | |||||
September 29, 2024 | December 31, 2023 | ||||
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents and restricted cash | $ | 18,520 | $ | 10,438 | |
Accounts and tenant improvement receivables | 14,913 | 14,183 | |||
Inventory | 8,298 | 8,733 | |||
Prepaid expenses | 5,201 | 8,565 | |||
Total current assets | 46,932 | 41,919 | |||
Property and equipment, net | 343,160 | 295,793 | |||
Operating lease assets | 214,338 | 193,825 | |||
Goodwill | 394,298 | 394,298 | |||
Trade names | 223,925 | 223,925 | |||
Other intangible assets, net | 26,745 | 28,911 | |||
Equity method investment | 16,032 | 16,684 | |||
Deferred tax assets | 197,580 | 184,701 | |||
Other assets | 8,409 | 5,485 | |||
Total other assets | 866,989 | 854,004 | |||
TOTAL ASSETS | $ | 1,471,419 | $ | 1,385,541 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
CURRENT LIABILITIES: | |||||
Accounts payable | $ | 47,165 | $ | 33,189 | |
Current portion of long-term debt | 9,375 | 7,500 | |||
Short-term debt | 14,000 | 15,000 | |||
Current portion of Tax Receivable Agreement liability | 7,723 | 4,428 | |||
Deferred revenue | 4,112 | 7,180 | |||
Short-term lease liability | 5,667 | 5,577 | |||
Accrued expenses | 36,246 | 32,039 | |||
Total current liabilities | 124,288 | 104,913 | |||
LONG-TERM LIABILITIES: | |||||
Long-term debt, net of current portion | 278,867 | 283,923 | |||
Tax Receivable Agreement liability | 318,967 | 295,390 | |||
Long-term lease liability | 267,760 | 238,414 | |||
Other long-term liabilities | 3,945 | 2,791 | |||
Total long-term liabilities | 869,539 | 820,518 | |||
Total liabilities | 993,827 | 925,431 | |||
COMMITMENTS AND CONTINGENCIES | |||||
STOCKHOLDER’S EQUITY: | |||||
Preferred stock, | — | — | |||
Class A common stock, | 622 | 555 | |||
Class B common stock, | — | — | |||
Additional paid-in-capital | 349,955 | 308,212 | |||
Retained earnings | 31,864 | 13,612 | |||
Total stockholders' equity attributable to Portillo's Inc. | 382,441 | 322,379 | |||
Non-controlling interest | 95,151 | 137,731 | |||
Total stockholders' equity | 477,592 | 460,110 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,471,419 | $ | 1,385,541 |
PORTILLO’S INC CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||
Three Quarters Ended | |||||||
September 29, 2024 | September 24, 2023 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 22,647 | $ | 15,171 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 20,729 | 17,788 | |||||
Amortization of debt issuance costs and discount | 568 | 814 | |||||
Loss on sales of assets | 130 | 512 | |||||
Equity-based compensation | 9,223 | 12,044 | |||||
Deferred income tax expense | 4,898 | 3,605 | |||||
Tax Receivable Agreement liability adjustment | (2,724 | ) | (1,691 | ) | |||
Gift card breakage | (666 | ) | (688 | ) | |||
Loss on debt extinguishment | — | 3,465 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivables | 497 | (1,293 | ) | ||||
Receivables from related parties | 152 | (100 | ) | ||||
Inventory | 435 | 969 | |||||
Other current assets | 2,222 | 124 | |||||
Operating lease asset | 6,511 | 5,685 | |||||
Accounts payable | 4,538 | (2,777 | ) | ||||
Accrued expenses and other liabilities | 1,880 | 1,023 | |||||
Operating lease liabilities | (2,591 | ) | (1,775 | ) | |||
Deferred lease incentives | 3,476 | 1,013 | |||||
Other assets and liabilities | 29 | (319 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 71,954 | 53,570 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment | (56,514 | ) | (57,660 | ) | |||
Proceeds from the sale of property and equipment | 77 | 81 | |||||
NET CASH USED IN INVESTING ACTIVITIES | (56,437 | ) | (57,579 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from short-term debt, net | (1,000 | ) | — | ||||
Proceeds from long-term debt | — | 300,000 | |||||
Payments of long-term debt | (3,750 | ) | (324,303 | ) | |||
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 | 2,576 | 1,321 | |||||
Employee withholding taxes related to net settled equity awards | (395 | ) | (112 | ) | |||
Proceeds from Employee Stock Purchase Plan purchases | 401 | 404 | |||||
Payments of Tax Receivable Agreement liability | (4,429 | ) | (813 | ) | |||
Payment of deferred financing costs | — | (3,569 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (7,435 | ) | (27,471 | ) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 8,082 | (31,480 | ) | ||||
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 | $ | 18,520 | $ | 12,947 |
PORTILLO’S INC SELECTED OPERATING DATA AND NON-GAAP FINANCIAL MEASURES | |||||||||||||||
Quarter Ended | Three Quarters Ended | ||||||||||||||
September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
Total Restaurants (a) | 88 | 78 | 88 | 78 | |||||||||||
AUV (in millions) (a) | N/A | N/A | $ | 8.9 | $ | 8.9 | |||||||||
Change in same-restaurant sales (b)(c) | (0.9 | )% | 3.9 | % | (0.9 | )% | 6.1 | % | |||||||
Adjusted EBITDA (in thousands) (b) | $ | 27,911 | $ | 27,285 | $ | 79,554 | $ | 76,140 | |||||||
Adjusted EBITDA Margin (b) | 15.7 | % | 16.4 | % | 15.1 | % | 15.5 | % | |||||||
Restaurant-Level Adjusted EBITDA (in thousands) (b) | $ | 41,946 | $ | 41,885 | $ | 122,886 | $ | 119,435 | |||||||
Restaurant-Level Adjusted EBITDA Margin (b) | 23.5 | % | 25.1 | % | 23.4 | % | 24.3 | % |
(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 September 29, 2024, same-restaurant sales compares the 13 weeks from July 1, 2024 through September 29, 2024 to the 13 weeks from July 3, 2023 through October 1, 2023. For the three quarters ended September 29, 2024, same-restaurant sales compares the 39 weeks from January 1, 2024 through September 29, 2024 to the 39 weeks from January 2, 2023 through October 1, 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 | Three Quarters Ended | ||||||||||||||
September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
Net income | $ | 8,773 | $ | 6,546 | $ | 22,647 | $ | 15,171 | |||||||
Net income margin | 4.9 | % | 3.9 | % | 4.3 | % | 3.1 | % | |||||||
Depreciation and amortization | 6,679 | 6,178 | 20,729 | 17,788 | |||||||||||
Interest expense | 6,450 | 6,573 | 19,583 | 20,539 | |||||||||||
Interest income | (50 | ) | (116 | ) | (204 | ) | (116 | ) | |||||||
Loss on debt extinguishment | — | — | — | 3,465 | |||||||||||
Income tax expense | 2,539 | 2,622 | 4,898 | 3,605 | |||||||||||
EBITDA | 24,391 | 21,803 | 67,653 | 60,452 | |||||||||||
Deferred rent (1) | 1,391 | 1,388 | 3,857 | 3,781 | |||||||||||
Equity-based compensation | 3,506 | 4,324 | 9,223 | 12,044 | |||||||||||
Cloud-based software implementation costs (2) | 64 | 149 | 514 | 149 | |||||||||||
Amortization of cloud-based software implementation costs (3) | 220 | — | 366 | — | |||||||||||
Other loss (4) | 63 | 16 | 129 | 511 | |||||||||||
Transaction-related fees and expenses (5) | — | 133 | 536 | 894 | |||||||||||
Tax Receivable Agreement liability adjustment (6) | (1,724 | ) | (528 | ) | (2,724 | ) | (1,691 | ) | |||||||
Adjusted EBITDA | $ | 27,911 | $ | 27,285 | $ | 79,554 | $ | 76,140 | |||||||
Adjusted EBITDA Margin (7) | 15.7 | % | 16.4 | % | 15.1 | % | 15.5 | % |
(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 new enterprise resource planning ("ERP") and human capital management ("HCM") systems which are included within general and administrative expenses.
(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 included within other income, net.
(5) Represents certain expenses that management believes are not indicative of ongoing operations, consisting primarily of certain professional fees included within general and administrative expenses.
(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 | Three Quarters Ended | ||||||||||||||
September 29, 2024 | September 24, 2023 | September 29, 2024 | September 24, 2023 | ||||||||||||
Operating income | $ | 15,988 | $ | 15,097 | $ | 44,200 | $ | 40,973 | |||||||
Operating income margin | 9.0 | % | 9.1 | % | 8.4 | % | 8.3 | % | |||||||
Plus: | |||||||||||||||
General and administrative expenses | 18,305 | 18,898 | 54,786 | 57,285 | |||||||||||
Pre-opening expenses | 1,747 | 2,410 | 5,270 | 5,029 | |||||||||||
Depreciation and amortization | 6,679 | 6,178 | 20,729 | 17,788 | |||||||||||
Net income attributable to equity method investment | (383 | ) | (422 | ) | (923 | ) | (1,010 | ) | |||||||
Other income, net | (390 | ) | (276 | ) | (1,176 | ) | (630 | ) | |||||||
Restaurant-Level Adjusted EBITDA | $ | 41,946 | $ | 41,885 | $ | 122,886 | $ | 119,435 | |||||||
Restaurant-Level Adjusted EBITDA Margin (1) | 23.5 | % | 25.1 | % | 23.4 | % | 24.3 | % |
(1) Restaurant-Level Adjusted EBITDA Margin is defined as Restaurant-Level Adjusted EBITDA divided by Revenues, net
FAQ
What was Portillo's (PTLO) revenue growth in Q3 2024?
How many new restaurants did Portillo's (PTLO) open in 2024 so far?
What was Portillo's (PTLO) same-restaurant sales performance in Q3 2024?