Portillo's (PTLO) The 44th Annual William Blair Growth Stock Conference summary

Growth strategy and market expansion

• Targeting 12%+ annual unit expansion, with mid-teen sales growth and low teens profit growth over the long term.

• Focused on expanding in the Sun Belt states, leveraging population growth for tailwinds.

• New markets like Houston, Georgia, Carolinas, Colorado, and Nevada are under active development.

• First-in-market openings create strong initial awareness, followed by additional locations to build scale.

• Long-term unit growth guidance: 10%+ in 2024, 12%+ in 2025, and 12%-15% from 2026 onward.

Unit economics and operational performance

• Average unit volumes (AUVs) are higher in the Sun Belt ($6.7M) than in the Midwest ($5.7M), with Chicagoland at $11M+.

• Restaurant-level margins target 22% by year 3, with high teens margins in early years.

• Cash on cash return target remains at 25%, supported by cost efficiencies and sales initiatives.

• Employee turnover is 20 percentage points better than the fast casual segment, attributed to enhanced total rewards.

• Self-funding growth through strong cash flow, with no near-term borrowing planned.

Restaurant of the Future initiative

• New prototype reduces build-out costs to $5.2-$5.5M and shrinks footprint to 6,300 sq ft without sacrificing throughput.

• First Restaurant of the Future opens in Q4, with most 2025 builds adopting this model.

• Design changes focus on off-premise dining, more efficient kitchens, and dedicated delivery vestibules.

• Lower build costs de-risk return targets and support higher returns at lower AUVs.

• Ongoing innovation with Restaurant of the Future 2.0 planned for further efficiency gains.