Portillo's Reverses Same-Store Sales Decline, Lifts Ebitda Outlook
Same-restaurant sales rose 1.4% in the third quarter after a 1.2% drop, and the company raised full-year Adjusted EBITDA guidance to $98 million to $101 million.
Portillo’s Inc. (PTLO), a restaurant concept known for Chicago-style favorites, reported same-restaurant sales of a 1.4% increase in the third quarter ended September 27, 2026, reversing a 1.2% decline in the prior quarter.
Transactions decreased 0.7% after a 3.4% drop in the second quarter. Average check increased 2.1%, which the company attributed to an approximate 2.1% rise in certain menu prices.
Total revenue was $194.1 million, up 7.0% from $181.4 million a year earlier, accelerating from 5.6% growth in the second quarter. Restaurants outside the comparable base contributed $10.3 million of the $12.6 million year-over-year increase. Same-restaurant sales added $2.4 million. The company said the revenue increase was primarily due to eight restaurants opened in fiscal 2025, seven openings in the three quarters ended September 27, 2026, and the same-restaurant sales gain.
Operating income was $11.8 million, up 116.8% from $5.4 million a year earlier. The company said the increase reflected the revenue and expense changes, $2.6 million of lower pre-opening expenses, and a $1.1 million favorable year-over-year change in other (income) loss, net, as the prior-year period included a legacy Barnelli’s trade-name impairment that did not recur.
Net income was $4.8 million, compared with $0.8 million a year earlier. The company said the increase was primarily due to the $6.3 million rise in operating income, partially offset by $3.0 million of higher income tax expense and a $0.6 million decrease in the Tax Receivable Agreement liability adjustment.
Adjusted EBITDA was $26.5 million, up $5.1 million, or 23.7%, from $21.4 million a year earlier. Restaurant-Level Adjusted EBITDA was $40.1 million, up 9.3%.
Total restaurant operating expenses were $154.0 million, up 6.4% from $144.7 million a year earlier, which the company said was primarily driven by the same restaurant openings. General and administrative expenses were $19.8 million, down 1.4% from $20.0 million a year earlier. The company said the decrease was primarily attributable to $3.3 million of lower dead-site costs from its 2025 strategic reset, partially offset by $1.4 million of restructuring charges related to a workforce reduction at the Restaurant Support Center and the absence of a $1.1 million net benefit recognized in the prior year in connection with the Chief Executive Officer transition.
Chief Executive Officer Brett Patterson said the company delivered third-quarter results ahead of its expectations and was encouraged by early progress from actions to strengthen operations and business fundamentals. He said one quarter does not establish a trend and that the focus remains on executing consistently and building a foundation for durable profitable growth.
The company introduced a strategic plan centered on operational excellence, integrated marketing and disciplined development, supported by financial rigor. It said it evaluated every restaurant in the system and decided to close a select group of underperforming locations outside of Chicagoland. Portillo’s expects to close a mid-to-high single digit number of those restaurants, with the majority occurring in the fiscal fourth quarter of 2026, and said it expects the analysis to result in material cash and non-cash charges mostly in that period.
Based on current expectations, inclusive of expected fourth-quarter closures, the company raised full-year 2026 Adjusted EBITDA guidance to $98 million to $101 million from $92 million to $96 million. It lifted restaurant-level adjusted EBITDA margin to 20.0% to 20.5% from 19.5% to 20.5% and introduced a revenue target of $768 million to $773 million. New-unit guidance remained eight units. Capital expenditures were set at approximately $55 million.
The company said it expects to deliver annual same-restaurant sales of 2% to 3%, and in the next three years will ramp new-restaurant growth to a high-single-digit percentage and expand margins. All new restaurants beginning in 2028 will be targeted to achieve cash-on-cash returns greater than 20%.
As of the filing, Portillo’s had 109 restaurants, including a restaurant owned by C&O, of which Portillo’s owns 50% of the equity. It plans to open one additional restaurant in the fourth quarter of 2026, its second in-line location, in Chicago, Illinois.
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