Portillo's Inc. Q4 FY2025 earnings call

Core markets have strong AUVs and profitability. Texas market expansion was a headwind; development strategy reset with slowing new store openings. Atlanta market entry in fourth quarter with Kennesaw restaurant opening in November, over $2 million in sales in first 8 weeks, using reduced cost Future 1.0 format. Perks program has over 2 million members. Brett Patterson joined as new CEO. Took steps to improve labor management and profitability of lower-volume Texas restaurants.

Fourth quarter revenues were $185.7 million, up $1.1 million or 0.6% vs last year. Non-comp restaurants contributed to revenue growth. Same-restaurant sales declined 3.3%. Food, beverage and packaging costs as a percentage of revenues increased to 34.6% in the quarter. Labor as a percentage of revenues increased to 26%. Restaurant level adjusted EBITDA decreased $4.7 million to $40.6 million. Texas market expansion was a headwind. 2026 restaurant-level adjusted EBITDA margins estimated to be in range of 20.5% - 21%.

2026 adjusted EBITDA expected flat vs 2025 but includes $9 million bonus expense headwind. Expect to open 8 new restaurants in 2026. Total capital expenditures预计 in range of $55 million to $60 million. Expect to generate positive free cash flow in 2026 and use excess cash to pay down revolving credit facility.

Texas market expansion challenges, commodity price inflation pressure, labor cost increase, distribution and oversight difficulties with market expansion, marketing effectiveness not meeting expectations.

Q: Sara Senatore asked about Atlanta restaurant maturity curve and Texas EBITDA; A: Michael Miles and Michelle Hook answered.

Q: Gregory Francfort asked about new growth strategy impact on hiring and expenses; A: Michael Miles and Michelle Hook answered.

Q: Brian Mullan asked about Chicagoland consumer value proposition; A: Michelle Hook and Michael Miles answered.

Q: Andrew Barish asked about Denise's priorities and Perks usage; A: Michael Miles and Michelle Hook answered.

Q: Jim Salera asked about pricing carryover in 2026; A: Michelle Hook answered.

Q: Sharon Zackfia asked about Perks program and margin guidance; A: Michael Miles and Michelle Hook answered.

Q: Dennis Geiger asked about operational speed and customer behavior by channel; A: Michael Miles and Michelle Hook answered.

Q: David Tarantino asked about EBITDA guidance and revenue outcomes; A: Michelle Hook answered.

Q: Brian Harbour asked about marketing spending and mix component; A: Michelle Hook answered