Portillo's Shares Drop Nearly 4% as Q3 Earnings Fall Short of Expectations

CHICAGO - Portillo's Inc. (NASDAQ:PTLO) reported third-quarter results that fell short of analysts' upper-range expectations, leading to a 3.8% decline in shares during pre-market trading on Tuesday. The Chicago-style hot dog chain reported revenue of $178.3 million for the quarter, which was below the consensus estimate of $182.31 million. However, adjusted earnings per share came in at $0.11, exceeding expectations of $0.06.

Same-store sales decreased by 0.9% year-over-year, compared to a 3.9% increase in the same quarter last year. The company cited lower transaction volumes as the primary factor behind the decline in sales.

Michael Osanloo, President and CEO of Portillo's, stated, "While our upper-line results for the quarter fell short of expectations, I am proud of our team's ability to maintain margins and enhance cash flow."

Despite missing revenue expectations, Portillo's managed to increase its operating income from $15.1 million in the third quarter of 2023 to $16.0 million. The company also raised its net income from $6.5 million a year earlier to $8.8 million.

For the fiscal year 2024, Portillo's now expects a decrease of approximately 1% in same-store sales, a reduction from its previous forecast of flat to slightly positive growth. However, the company maintained its restaurant-level adjusted EBITDA margin target at 23-24%.

Portillo's opened four new restaurants in the first three quarters of 2024 and plans to open five more in December, bringing the total number of new openings for the year to 10.