Portillo's Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 5 August 2026: press release. Guidance figures: 2 lowered, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose on new restaurants: Revenue was $199.0 million, up 5.6%. Restaurants outside the Comparable Restaurant Base added $13.3 million of the increase, offsetting part of the same-restaurant decline. Source
• Same-restaurant sales fell 1.2%: Same-restaurant sales decreased $2.2 million, or 1.2%, in the quarter, as transactions fell and average check rose. Source
• Operating income fell 21.4%: Operating income was $13.8 million, down 21.4%, as higher revenue was more than offset by restaurant and G&A expense factors. Source
• Transactions fell 3.4%: The same-restaurant sales decline reflected 3.4% fewer transactions, partly offset by a 2.2% higher average check. Source
• Commodity costs up 7.0%: Commodity prices rose 7.0% year over year. Food, beverage and packaging costs were 35.0% of revenue, against 33.8% a year earlier. Source
• Restaurant-level margin fell to 21.7%: Restaurant-Level Adjusted EBITDA was $43.2 million, down 2.8%. Its margin was 21.7%, against 23.6% a year earlier. Source
• Brand research shapes long-term strategy: Brand and consumer research was finalized and is helping shape a long-term strategy focused on sustainable, profitable growth. A roadmap is to follow. Source
• Corporate workforce cut about 18%: On July 31, 2026, the company cut about 18% of its corporate headquarters active workforce and a limited number of field management roles. Restaurant team members were not affected. Source

“Q2 was highlighted by resilient underlying sales performance despite difficult promotional comparisons, as well as taking decisive actions to simplify the business to better support our priority of running great restaurants”

Brett Patterson, Portillo's Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: Restaurant-level adjusted EBITDA margin target was reduced to 19.5% to 20.5% from 20.5% to 21%. Source
• Guidance lowered: G&A expense target was reduced at the low end, to $78 million to $82 million from $80 million to $82 million. Source
• New: On July 31, 2026, the company cut corporate headquarters and some field management roles, about 18% of the headquarters active workforce. Source
• New: Brand and consumer research was finalized and is described as shaping a long-term strategy focused on sustainable, profitable growth. Source

Results and growth drivers

• Revenue rose on new restaurants: Revenue was $199.0 million, up 5.6%. Restaurants outside the Comparable Restaurant Base added $13.3 million of the increase, offsetting part of the same-restaurant decline. Source
• Same-restaurant sales fell 1.2%: Same-restaurant sales decreased $2.2 million, or 1.2%, in the quarter, as transactions fell and average check rose. Source
• Diluted EPS fell to $0.09: Net income was $7.2 million. The company said the decline came mainly from lower operating income, partly offset by lower income tax expense. Source
• Operating income fell 21.4%: Operating income was $13.8 million, down 21.4%, as higher revenue was more than offset by restaurant and G&A expense factors. Source

Restaurant footprint and openings

• Three openings brought total to 109: Three restaurants opened in the quarter, bringing the total to 109, including a C&O restaurant in which Portillo's holds 50% of the equity. Source
• Seven 2026 openings, all in Texas: Seven restaurants have opened so far in fiscal 2026, all in Texas. The DFW airport unit is the company's first airport location, built with a smaller kitchen and equipment enhancements. Source
• Comparable base grew to 85 units: The Comparable Restaurant Base, restaurants open at least 24 full fiscal periods, rose to 85 from 75 a year earlier. Source

“While never an easy decision, it is imperative that we examine areas of the business where we can operate more efficiently and ensure our resources and future investments are directed at the right priorities.”

Brett Patterson, CEO

Pricing, traffic and average check

• Transactions fell 3.4%: The same-restaurant sales decline reflected 3.4% fewer transactions, partly offset by a 2.2% higher average check. Source
• Menu prices lifted average check: Certain menu prices rose about 2.6%, and product mix fell 0.4%. Together these produced the 2.2% higher average check. Source
• April price increase on select items: Select menu prices were raised about 2.0% in April 2026 to address inflationary cost pressures. Source

Costs and restaurant margins

• Commodity costs up 7.0%: Commodity prices rose 7.0% year over year. Food, beverage and packaging costs were 35.0% of revenue, against 33.8% a year earlier. Source
• Restaurant operating costs rose 8.1%: Total restaurant operating expenses rose 8.1% to $155.7 million, driven by new restaurants, higher commodity costs and team member investments. Source
• Occupancy rose to 5.9% of revenue: Occupancy costs were 5.9% of revenue, up from 5.3% a year earlier. Labor held at 25.7% of revenue in both periods. Source
• Restaurant-level margin fell to 21.7%: Restaurant-Level Adjusted EBITDA was $43.2 million, down 2.8%. Its margin was 21.7%, against 23.6% a year earlier. Source
• Adjusted EBITDA slipped slightly: Adjusted EBITDA was $29.8 million, down 0.8%, with margin of 15.0% against 16.0%. G&A rose 4.1% to $19.6 million, including $0.9 million of dead site costs. Source
• Other loss rose on legal contingency: Other loss rose $1.4 million because of a legal contingency tied to the Maverick arbitration, shown at $1.7 million in the reconciliation. Source

Cash, capital and debt

• Operating cash flow rose to $35.1 million: Operating cash flow for the two quarters was $35.1 million, up from $28.7 million a year earlier. Source
• Capital spending for two quarters: Purchases of property and equipment were $30.2 million for the two quarters, against $33.1 million a year earlier. Fiscal 2026 capex target is $55 million to $60 million. Source
• Short-term debt rose to $97.0 million: Short-term debt was $97.0 million at June 28, 2026, up from $90.0 million at year-end. Cash and restricted cash were $21.3 million. Source
• Tax Receivable Agreement payments continued: Two-quarter payments under the Tax Receivable Agreement were $7.9 million, against $7.7 million a year earlier. Source

Strategy and development

• Brand research shapes long-term strategy: Brand and consumer research was finalized and is helping shape a long-term strategy focused on sustainable, profitable growth. A roadmap is to follow. Source
• Strategic reset costs recorded: Strategic realignment costs were $0.9 million in the quarter and $1.6 million for the two quarters. They cover the reset of development plans and CEO transition costs. Source
• Consulting fees treated as non-recurring: Consulting fees of $0.7 million for a brand study and a spend optimization study were added back to reach Adjusted EBITDA. Source

Workforce reduction and leadership

• Corporate workforce cut about 18%: On July 31, 2026, the company cut about 18% of its corporate headquarters active workforce and a limited number of field management roles. Restaurant team members were not affected. Source
• Targets revised for the workforce action: Fiscal 2026 targets were revised to reflect these actions. The revised figures are in the guidance section of the release. Source
• Cuts framed as support for growth: The CEO said these actions, with other efficiencies, will support the company's long-term growth strategy. Source

Coming up, as management said on 5 August 2026

• Second in-line Chicago opening: One more restaurant is planned for the fourth quarter of 2026, the company's second in-line location, in Chicago, Illinois. Source
• Downtown Chicago and Wrigleyville sites: The company expects its first inline restaurant in downtown Chicago later this year and its first Wrigleyville location in 2027. Source
• Long-term strategy roadmap to be shared: The CEO said the company looks forward to sharing the strategy roadmap soon. Source

Figures management reported

Risks management discussed

• Demand: Fewer transactions were the main drag on same-restaurant sales, only partly offset by a higher average check. Source
• External: Commodity costs rose 7.0% year over year, raising food, beverage and packaging costs. Select menu prices were raised about 2.0% in April in response. Source
• Operational: Labor investments in team members added to restaurant operating expenses, alongside costs of new restaurant openings. Source
• Financial: A legal contingency tied to the Maverick arbitration was recorded in other loss at $1.7 million in the quarter. Source
• Financial: Short-term debt was $97.0 million at June 28, 2026, up from $90.0 million at year-end, against $21.3 million of cash. Source
• Operational: Dead site costs of $0.9 million were included in general and administrative expenses this quarter. Source

Earlier plans management reported on

• Not stated: The eight-unit fiscal 2026 opening target from the prior release was carried forward in this release. Source
• Not stated: The DFW airport unit planned in the prior release is reported as opened in the quarter. Source
• Not stated: The prior release said the company would share more as its plan takes shape. This release says the roadmap will be shared soon. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.