Portillo's (PTLO) Q3 2024 earnings summary

Executive summary

• Revenue grew 6.9% year-over-year to $178.3 million in Q3 2024, driven by new restaurant openings, while same-restaurant sales declined 0.9% due to lower transactions partially offset by higher average check.

• Net income was $8.8 million for Q3 2024, up from $6.5 million in Q3 2023; operating income increased to $16.0 million.

• Restaurant-level adjusted EBITDA for Q3 was $41.9 million (23.5% margin), and Adjusted EBITDA was $27.9 million (15.7% margin), both up slightly year-over-year.

• Strategic focus remains on long-term brand health, operational efficiency, expansion in Texas and the Sunbelt, and innovation in restaurant formats and guest experience.

• Management emphasized margin protection and cash flow generation despite top-line softness.

Financial highlights

• Q3 2024 revenue was $178.3 million, up $11.4 million year-over-year; YTD revenue reached $525.9 million.

• Same-restaurant sales declined 0.9%, with a 3.5% drop in transactions partially offset by a 2.6% increase in average check.

• Q3 net income was $8.8 million (4.9% margin); YTD net income was $22.6 million (4.3% margin).

• Restaurant-level adjusted EBITDA margin declined to 23.5% from 25.1% year-over-year; Adjusted EBITDA margin was 15.7% (down from 16.4%).

• Ended the quarter with $18.5 million in cash and $22 million outstanding on the revolver.

Outlook and guidance

• Full-year 2024 guidance: negative comparable sales of approximately 1%, restaurant-level adjusted EBITDA margin 23%-24%, and 10 new restaurant openings.

• G&A expenses projected at $78–$80 million; capital expenditures targeted at $85–$88 million.

• Labor inflation expected at 3%, commodity inflation in the mid-single digits for 2024.

• Long-term targets: unit growth 12%-15%, low single-digit same-restaurant sales growth, mid-teens revenue growth, low-teens adjusted EBITDA growth.

• Restaurant count expected to grow by 12%-15% in 2025.