Executive Summary

Q4 revenue was $184.6M, down 1.7% year over year due to the 53rd week in Q4’23; same-restaurant sales rose 0.4% on a 4.1% average check increase and a 3.7% decline in transactions .
Diluted EPS was $0.17, up from $0.13 in Q4’23, with net income aided by a higher Tax Receivable Agreement adjustment and lower interest expense .
Restaurant-Level Adjusted EBITDA margin improved to 24.5% (+20 bps YoY), while Adjusted EBITDA was $25.2M (−3.6% YoY); excluding the extra week in Q4’23, Adjusted EBITDA grew 6.3% and restaurant-level Adjusted EBITDA grew 7.1% .
FY25 targets: 12 new units, revenue growth of 11–12%, same-restaurant sales flat to +2%, RL Adj. EBITDA margin 22.5–23%, Adj. EBITDA growth 6–8%, capex $97–$100M; commodity inflation 3–5% (beef pressure), labor inflation 3–4% .
Near-term catalysts: systemwide kiosk rollout (>1% comp lift via mix), Portillo’s Perks loyalty launch (1.5–1.7M members targeted by July), and DFW awareness campaign; drive-thru AI camera pilot aims to recapture ~45 seconds of throughput (roughly 1–1.5 points of comp) .

What Went Well and What Went Wrong

What Went Well

Margins held or improved despite discount-heavy QSR environment: Q4 RL Adj. EBITDA margin rose to 24.5% (+20 bps YoY), aided by labor leverage and lower variable comp .
Kiosk rollout across all restaurants delivered a comp lift of >1% via mix, improving attach rates on add-ons; management sees more untapped potential .
Development execution: 10 openings in FY24 (including ROTF prototypes) and a plan for 12 openings in FY25, with ROTF build costs expected at $5.2–$5.5M, enhancing cash-on-cash returns .

Quotes:

“They [kiosks] are driving a comp lift of more than 1% through mix.” — CEO Michael Osanloo .
“We plan to open 12 new restaurants, all of which will be Restaurant of the Future.” — CEO Michael Osanloo .

What Went Wrong

Traffic softness: Q4 comps were driven by price/mix (+4.1% average check) offset by −3.7% transactions; management cautioned on weather impacts in February and a competitive drive‑thru backdrop .
Adjusted EBITDA declined −3.6% YoY (Q4) and Adjusted EBITDA margin fell to 13.7%, reflecting the extra week in Q4’23 and higher other operating expenses from new unit openings .
Drive‑thru channel remains pressured by aggressive QSR promotions; off‑premise order accuracy flagged as a key guest satisfaction issue needing process improvements .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$187.9	$178.3	$184.6
Diluted EPS ($USD)	$0.13	$0.11	$0.17
Operating Income Margin (%)	7.7%	9.0%	7.5%
Net Income Margin (%)	5.1%	4.9%	6.7%
Adjusted EBITDA ($USD Millions)	$26.1	$27.9	$25.2
Adjusted EBITDA Margin (%)	13.9%	15.7%	13.7%
RL Adjusted EBITDA ($USD Millions)	$45.7	$41.9	$45.2
RL Adjusted EBITDA Margin (%)	24.3%	23.5%	24.5%

Revenue composition (Q4 2024):

Component	Amount ($USD Millions)	Notes
Same-restaurant sales (71 restaurants)	$154.6	+0.4% comp; +4.1% average check, −3.7% transactions
Restaurants opened FY2024 (10)	$7.8	New units contribution
Restaurants opened FY2023 (12)	$16.7	Newer cohort contribution
Restaurants opened FY2022 (0)	$1.4	Pre-comp base contribution
Other (direct shipping, non-traditional)	$4.1	Other revenue
Total Revenue	$184.6	Extra week in Q4’23 was $13.9M headwind in YoY

Key KPIs (Q4 2024 and FY 2024):

KPI	Q4 2024	FY 2024
Same-restaurant sales change (%)	+0.4%	−0.6%
Average check change (%)	+4.1%	+2.6%
Transactions change (%)	−3.7%	−3.2%
Commodity inflation (%)	1.8%	4.2%
Total restaurants (incl. C&O)	94	94

Notes:

Excluding Q4’23’s extra week, Q4’24 Adjusted EBITDA grew 6.3% and restaurant-level Adjusted EBITDA grew 7.1% YoY .
Food, beverage and packaging costs were 34.1% of revenue in Q4 (vs. 34.8% in Q4’23); labor was 24.6% (vs. 25.4% in Q4’23) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Unit growth	FY 2025	Not previously provided	12 new units	New
Same-restaurant sales	FY 2025	Not previously provided	Flat to +2%	New
Revenue growth	FY 2025	Not previously provided	11% to 12%	New
Commodity inflation	FY 2025	Not previously provided	3% to 5% (beef pressure)	New
Labor inflation	FY 2025	Not previously provided	3% to 4%	New
RL Adj. EBITDA margin	FY 2025	Not previously provided	22.5% to 23%	New
G&A expenses	FY 2025	Not previously provided	$82–$84M	New
Pre-opening expenses	FY 2025	Not previously provided	$11–$12M	New
Adjusted EBITDA growth	FY 2025	Not previously provided	6% to 8%	New
Capital expenditures	FY 2025	Not previously provided	$97–$100M	New

Long-term algorithm: annual unit growth 12–15%, low single-digit comps, mid-teens revenue growth, low-teens Adjusted EBITDA growth .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior-2)	Q3 2024 (Prior-1)	Q4 2024 (Current)	Trend
AI/technology & kiosks	Kiosk pilots begun; focus on throughput & speed; drive‑thru speed improved 15 seconds	Kiosks deployed chainwide; positive mix impact; quantification expected early next year	Kiosks delivering >1% comp lift via mix; further functionality planned	Improving adoption/mix
Drive‑thru operations	Emphasis on speed; 15-second improvement vs prior year; search for COO	Continued pressure from QSR promotions; operational focus persists	Targeting 45 seconds recapture; rule-of-thumb: ~1 point comp per 30 seconds; AI camera pilot expanded	Improving execution
Pricing/mix/traffic	Effective price ~4% in Q2; mix challenged; traffic choppy	Q3 comps −0.9% (−3.5% transactions; +2.6% check)	Q4 comps +0.4% (+4.1% check; −3.7% transactions); pricing +4.7% in 2024; +1.5% taken Jan’25	Traffic soft; mix improving
Regional strategy	Scaling DFW to enable TV ads; Houston openings	DFW advertising planned to drive awareness; Houston first restaurant opened	DFW ad campaign launched; plan to enter Atlanta; Texas majority of FY25 openings	Expanding scale
Menu streamlining	N/A	Planning ROTF, operational efficiency focus	Houston test removed 15–20% low-P mix SKUs; quickly restored sausages; reduced complexity aids accuracy/throughput	Simplifying for throughput
Macro/competitive	Value-heavy QSR promotions muted ad impact	Industry discounting challenged traffic	Weather impacted Feb; competitive drive‑thru pressure persists	Persistent headwinds

Management Commentary

“Our same-restaurant sales were up 0.4%, and our full-year comp was a negative 0.6%…We saw good top line momentum in Q4, especially with the addition of kiosks at all of our restaurants.” — CEO Michael Osanloo .
“In 2025, we plan to open 12 new restaurants, all of which will be Restaurant of the Future… lowers the average build cost by over $1 million. We expect these to come in at $5.2 million to $5.5 million.” — CEO Michael Osanloo .
“Every 30 seconds of improved throughput in the drive-thru is equivalent to 1 point of comp.” — CEO Michael Osanloo .
“We are estimating commodity inflation of 3% to 5% in 2025 with the most significant pressures coming from beef… labor inflation of 3% to 4% in 2025.” — CFO Michelle Hook .
“We launched the Portillo’s Perks loyalty program next month… goal to hit 1.5 million to 1.7 million members by July.” — CEO Michael Osanloo .

Q&A Highlights

Weather and 1H softness: Management expects comps to be in the 0–2% range for FY25, noting February weather headwinds and a back‑half improvement as strategies roll out .
Drive‑thru speed impact: Targeting 45 seconds faster; ~1 comp point per 30 seconds; plan to deploy AI camera across system as test proves out .
Menu simplification: Houston SKU reduction (15–20%) improved complexity/accuracy; select sausages reinstated on guest feedback; enabler for ROTF 2.0 .
Commodity risk management: ~50% of beef flats locked for 2025; inflation likely most pronounced in Q3 .
Guidance mechanics: FY25 same‑store sales guidance includes kiosk contribution; pricing/mix positive, traffic negative initially but improving through the year .

Estimates Context

S&P Global consensus for Q4’24 EPS and revenue was unavailable at time of writing due to data access limits. As a result, we cannot provide beat/miss versus Wall Street consensus in this report; we will update when S&P Global data is accessible. Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix-driven uplift from kiosks (>1% comp lift) is tangible and should compound as functionality expands; loyalty program introduces targeted, app-less CRM that may improve frequency starting in Q2 .
Margin discipline remains a strength: Q4 RL Adj. EBITDA margin expanded to 24.5% despite traffic softness; FY25 margin target (22.5–23%) reflects continued investment, new unit ramp, and inflation normalization .
Development algorithm intact and capital efficient: 12 ROTF units in FY25 emphasize lower build costs ($5.2–$5.5M) and improved cash-on-cash economics while scaling Texas and entering Atlanta .
Drive‑thru throughput is the most levered near-term comp driver; management’s AI pilot and operational rigor can recapture ~45 seconds and materially lift comps in 2H25 .
Macro headwinds (value-heavy QSR) and seasonal factors (weather) could keep traffic pressured near-term; success hinges on execution in drive‑thru speed, order accuracy, and targeted marketing .
Pricing power appears measured and targeted; Jan’25 +1.5% taken, with FY25 guide implying modest price and positive mix, mitigating commodity and labor inflation .
Monitoring points: loyalty enrollment/activation, DFW ad ROI, Houston cohort performance under streamlined menu, and beef inflation trajectory/hedging .

Appendix: Additional Data Points

Q4 cost ratios: Food, beverage & packaging 34.1% (vs. 34.8% Q4’23); labor 24.6% (vs. 25.4% Q4’23); other operating 12.0% (vs. 10.9% Q4’23); occupancy 4.8% (vs. 4.5% Q4’23) .
FY24 cash flow: Cash from operations $98.0M; year-end cash $22.9M .
Capital structure update: Term loan reduced to $250M; revolver increased to $150M; effective interest rate fell to 7.5% (from 8.4% in 2023) .
FY24 revenue grew 4.5% to $710.6M; Adjusted EBITDA grew 2.4% to $104.8M; RL Adj. EBITDA grew 1.8% to $168.1M .

Citations:
All quantitative and qualitative statements above are sourced from Portillo’s Q4 2024 Form 8‑K and exhibits, Q4 2024 earnings press release, and Q2/Q3 2024 earnings materials and transcripts .

Portillo's Inc. (PTLO)·Q4 2024 Earnings Summary