Executive Summary

Q1 revenue grew 6.4% year over year to $176.4M as comps turned positive (+1.8%); however, revenue missed S&P Global consensus while EPS beat: revenue $176.4M vs $180.7M consensus*, Primary EPS $0.063 vs $0.0475 consensus* . Values retrieved from S&P Global.*
Mix-driven average check (+4.9%) offset a 3.1% decline in transactions; restaurant-level adjusted EBITDA margin fell 110 bps to 20.8% on commodity (beef) inflation and higher labor/other OpEx .
2025 guidance updated: comps raised to 1–3% (from flat–+2%), revenue growth narrowed to 10–12% (from 11–12%), G&A lowered to $80–82M (from $82–84M), adjusted EBITDA growth to 5–8% (from 6–8%) .
Near-term catalysts: Portillo’s Perks loyalty launch (targeted, app-less program), high-ROI market advertising (DFW brand awareness +~10%, high-single-digit sales lift), and a Chicagoland breakfast test; management cites minimal expected direct tariff impact and continued kiosk optimization toward ~30% adoption .

What Went Well and What Went Wrong

What Went Well

Loyalty program and targeted marketing are gaining traction: DFW awareness up ~10% with high-single-digit sales lift; Perks enrollment and offer responsiveness are ahead of internal expectations (“most exciting thing we’re doing”) .
Positive comp inflection: Same-restaurant sales +1.8% (avg check +4.9% on ~4.4% price and +0.5% mix) despite weaker traffic and weather headwinds; comps on a 2‑yr stack +0.7% .
Cost discipline and outlook: G&A guidance cut to $80–82M; adjusted EBITDA growth guided 5–8% as advertising remains targeted and tariff effects are expected to be minimal .

Quotes:

CEO: “Advertising in Dallas-Fort Worth… increased brand awareness by about 10% and drove high single-digit increase in sales” .
CEO: “Portillo’s Perks… we will shift to more targeted offers in the back-half of the year” .
CFO: “We are now estimating general and administrative expenses in the range of $80 million to $82 million” .

What Went Wrong

Top-line miss vs consensus and margin compression: Q1 revenue $176.4M missed S&P consensus $180.7M*; restaurant-level adjusted EBITDA margin fell 110 bps y/y to 20.8% on 3.4% commodity inflation (notably beef), higher labor, and repairs/utilities . Values retrieved from S&P Global.*
Transactions down 3.1% y/y; labor rate inflation (+2.7% Q1, 3–4% FY) and other operating expenses rose 9.7% (repairs/utilities), partly offset by vendor renegotiations .
New 4Q24 openings (especially Houston) started slower due to lower brand awareness and site idiosyncrasies (e.g., construction), delaying revenue ramp; back-half–weighted 2025 openings raise execution risk .

Financial Results

Headline P&L and Margins (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$178.252	$184.609	$176.437
Diluted EPS ($)	$0.11	$0.17	$0.05
Operating Income ($M)	$16.0	$13.8	$10.4
Operating Margin (%)	9.0%	7.5%	5.9%
Adjusted EBITDA ($M)	$27.911	$25.205	$21.209
Adjusted EBITDA Margin (%)	15.7%	13.7%	12.0%
Restaurant-Level Adj. EBITDA ($M)	$41.946	$45.228	$36.656
RL Adj. EBITDA Margin (%)	23.5%	24.5%	20.8%
Same-Restaurant Sales (%)	(0.9%)	0.4%	1.8%

Q1 2025 vs Q1 2024 (YoY)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$165.831	$176.437
Diluted EPS ($)	$0.08	$0.05
Operating Income ($M)	$10.1	$10.4
Operating Margin (%)	6.1%	5.9%
Adjusted EBITDA ($M)	$21.777	$21.209
Adjusted EBITDA Margin (%)	13.1%	12.0%
RL Adj. EBITDA ($M)	$36.371	$36.656
RL Adj. EBITDA Margin (%)	21.9%	20.8%
Same-Restaurant Sales (%)	(1.2%)	1.8%

KPIs and Operating Drivers

KPI	Q3 2024	Q4 2024	Q1 2025
Restaurants (period-end)	88	94	94
AUV (Trailing 12M, $M)	$8.9	$8.7	$8.7
Same-Restaurant Sales (%)	(0.9%)	0.4%	1.8%
Avg Check Change (%)	—	4.1%	4.9%
Transactions Change (%)	—	(3.7%)	(3.1%)
Commodity Inflation (%)	3.6%	1.8%	3.4%
Labor as % of Revenue	25.8%	24.6%	26.6%
G&A ($M)	$18.3	$20.3	$18.9
Kiosk Adoption (%)	—	—	~30% (vs ~25% earlier)

Note: Q1 2025 price increases ~1.5% in January and ~1.0% in April; Q2 effective pricing ~3.5% (lapping 1% mid-June) .

Q1 2025: Actual vs S&P Global Consensus*

Metric	Actual	S&P Consensus*	Surprise
Revenue ($USD Millions)	$176.437	$180.715*	(2.4%)
Primary EPS ($)	0.06321*	0.0475*	+33.1%
EBITDA ($USD Millions)	17.318*	22.551*	(23.2%)

Values retrieved from S&P Global. Company-reported diluted EPS was $0.05 and Adjusted EBITDA was $21.209M; S&P “Primary EPS” and standardized EBITDA may differ from GAAP/non‑GAAP presentations .

Guidance Changes

Metric	Period	Previous Guidance (Feb-25)	Current Guidance (May-25)	Change
Unit Growth (new units)	FY 2025	12	12	Maintained
Same-Restaurant Sales	FY 2025	Flat to +2%	1% to 3%	Raised
Revenue Growth	FY 2025	11% to 12%	10% to 12%	Lowered (range widened down)
Commodity Inflation	FY 2025	3% to 5%	3% to 5%	Maintained
Labor Inflation	FY 2025	3% to 4%	3% to 4%	Maintained
RL Adj. EBITDA Margin	FY 2025	22.5% to 23%	22.5% to 23%	Maintained
G&A	FY 2025	$82–$84M	$80–$82M	Lowered
Pre‑opening	FY 2025	$11–$12M	$11–$12M	Maintained
Adjusted EBITDA Growth	FY 2025	6% to 8%	5% to 8%	Lowered (low end)
Capex	FY 2025	$97–$100M	$97–$100M	Maintained

Management rationale: slower starts from certain 4Q24 openings (notably newer markets like Houston) weighed on revenue growth outlook; lower G&A reflects expense control and ad efficiency; comps increased due to pricing, Perks, and advertising .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
Loyalty/CRM	No formal program; focus on ads and operations	Launched “Portillo’s Perks” (wallet-based); enrollment and offer responsiveness strong; shift to targeted offers in 2H25	Improving
Kiosks & Ops/Drive-thru tech	Ongoing ops focus; margin protection amid volume softness	Kiosk adoption ~30% (from ~25%); 15% higher checks via kiosks; testing camera vision to improve drive‑thru speed; problem resolution improving	Improving
Pricing	Took 2024 pricing actions; modest approach	+1.5% in Jan; +1% in Apr; Q2 effective ~3.5%; goal to offset inflation, remain modest	Stable/modest
Commodities (Beef)	3.6% Q3; 1.8% Q4 inflation	3.4% Q1; beef pressure most significant; tariffs minimal impact expected	Mixed (inflation up vs Q4)
New Market Ramp/Awareness	Accelerating TX buildout; strong DFW; multiple 4Q openings	4Q24 class slower start (Houston awareness, site issues); doubling field marketing; DFW campaign +~10% awareness, high-single-digit sales	Addressing via marketing
Development cadence	10 opened in FY24; targeted 12 in FY25	FY25 back‑half weighted; Q1 opening delayed by permitting; TX focus; new “walk-up” format pilot	Back‑half loaded (execution watch)
Breakfast test	Not discussed	5-unit breakfast test in Chicagoland; assessing comp lift and lunch impact before broader roll-out	New initiative

Management Commentary

CEO on macro and initiatives: “Same-restaurant sales increased 1.8%… We’re supporting our restaurants with… Portillo’s Perks and our Dallas-Fort Worth advertising campaign” .
CEO on marketing impact: “This campaign increased brand awareness by about 10% and drove high single-digit increase in sales for Dallas-Fort Worth restaurants… running a similar campaign in Phoenix” .
CFO on comps and pricing: “Effective price increase for the second quarter is estimated to be approximately 3.5%… we’ll continue to assess pricing… relative to costs and value proposition” .
CFO on cost outlook: “We continue to forecast commodity inflation of 3% to 5% in 2025 with the most significant pressures coming from beef… labor inflation of 3% to 4%” .
CEO on Houston/new units: “We’re just not as well known… we are doubling down on field marketing… everything suggests these businesses are going to be fine” .

Q&A Highlights

New unit performance/Houston: Slower starts tied to awareness and site issues (e.g., construction); more field marketing planned; not alarmed by early trends .
Development timing: FY25 openings back-half weighted; one Q1 opening delayed by permitting; pipeline on track for H2, mostly Texas (incl. drive‑thru only and walk‑up formats) .
Breakfast: 5-store test in Chicagoland; success criteria include comp impact, guest scores, and no lunch disruption; currently in “stealth mode” marketing .
Loyalty metrics: Enrollment pacing ahead of goal (1.6M by early summer referenced); strong responsiveness to offers; shift to one‑to‑one marketing expected in 2H25 .
Pricing/tariffs: Intent to price modestly to offset inflation; direct tariff impact expected to be minimal; uncertainty keeps ranges wider .

Estimates Context

Q1 2025 vs S&P Global consensus*: Revenue $176.4M vs $180.7M (miss); Primary EPS $0.063 vs $0.0475 (beat); EBITDA $17.3M vs $22.6M (miss). Company’s diluted EPS was $0.05 and Adjusted EBITDA $21.2M; differences reflect S&P’s standardized/normalized definitions . Values retrieved from S&P Global.*
Implications: Street models likely trim revenue and standardized EBITDA near term for slower new-unit ramps and margin pressure (beef, labor, repairs/utilities), while raising comps assumptions (1–3%) and lowering G&A per guidance; watch for H2 ramp given back‑half openings and Perks-driven traffic tests .

Key Takeaways for Investors

Mix-led comp improvement with positive comps and higher check, but traffic still negative; Perks and advertising are the key levers to bend traffic toward positive in 2H25 .
Loyalty program is an underappreciated catalyst: early response strong; expect transition to targeted offers in 2H that can drive frequency/mix while protecting margin .
Margin watch: RL adjusted EBITDA margin down 110 bps y/y on beef/labor/OpEx; pricing (~3.5% effect in Q2) offsets some inflation, but sustained beef pressure could cap near-term margin expansion .
New unit ramp risk is executional/awareness-driven, not product-fit: increased field marketing in newer markets (Houston) should support ramp; Dallas playbook (awareness + offers) is transferable .
Back-half–weighted 2025 openings concentrate execution risk and earnings cadence in H2; permitting/site idiosyncrasies can shift timing .
Guidance signals discipline: higher comps, lower G&A, lower low-end of EBITDA growth; revenue growth narrowed as newer units start slower; watch updates on breakfast test and walk‑up format economics .
Trading setup: Q1 revenue/EBITDA shortfall vs S&P* may pressure near-term sentiment, but increasing comps guidance, lower G&A and Perks/breakfast optionality provide offsets into H2 . Values retrieved from S&P Global.*

Additional primary sources used:

Q1 2025 8-K 2.02 (press release, full financials and guidance) .
Q1 2025 earnings call transcript (prepared remarks and Q&A) .
Q4 2024 press release (prior quarter context and initial 2025 targets) .
Q3 2024 press release (trend analysis) .
Loyalty program launch press release (program specifics) .

Portillo's Inc. (PTLO)·Q1 2025 Earnings Summary