On August 6, 2024, Portillos Inc (PTLO, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Portillos Inc, known for its Chicago-style street food, operates fast-casual restaurants across the United States and owns two food production commissaries in Illinois.
Performance Overview
Portillos Inc (PTLO, Financial) reported a total revenue increase of 7.5% year-over-year to $181.9 million, falling short of the analyst estimate of $185.08 million. Same-restaurant sales decreased by 0.6%, a notable decline compared to the 5.9% growth in the same quarter last year. Operating income rose slightly by $0.7 million to $18.1 million, while net income decreased by $1.4 million to $8.5 million.
Financial Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $181.9 million | $169.2 million |
| Operating Income | $18.1 million | $17.4 million |
| Net Income | $8.5 million | $9.9 million |
| Restaurant-Level Adjusted EBITDA | $44.6 million | $42.7 million |
| Adjusted EBITDA | $29.9 million | $29.2 million |
Income Statement Analysis
For the quarter ended June 30, 2024, Portillos Inc (PTLO, Financial) reported revenues of $181.9 million, up from $169.2 million in the same period last year. This increase was primarily driven by the opening of new restaurants. However, same-restaurant sales saw a decline of 0.6%, attributed to a 2.3% decrease in transactions, partially offset by a 1.7% increase in the average check.
Total restaurant operating expenses rose by 8.6% to $137.3 million, driven by higher food, beverage, and packaging costs due to commodity inflation of 6.9%. Labor expenses remained flat as a percentage of revenue but increased in absolute terms due to wage rate hikes and investments in team members.
Balance Sheet and Cash Flow
As of June 30, 2024, Portillos Inc (PTLO, Financial) reported total assets of $1.44 billion, up from $1.39 billion at the end of 2023. The company's cash and cash equivalents stood at $12.4 million, an increase from $10.4 million at the beginning of the year. Total liabilities increased to $974.8 million from $925.4 million, primarily due to higher long-term debt and lease liabilities.
Net cash provided by operating activities was $41.6 million for the first two quarters of 2024, compared to $31.3 million in the same period last year. However, net cash used in investing activities was $33.8 million, primarily for the purchase of property and equipment.
Commentary and Future Outlook
"We delivered sequential improvement in both revenue and margin this quarter as we continued to prioritize sales and transaction growth. We are confident that our strategic plan is focused on the right factors, allowing us to navigate near-term challenges and seize opportunities for continuous improvement," said Michael Osanloo, President and Chief Executive Officer of Portillo’s.
Portillos Inc (PTLO, Financial) plans to open at least 10 new restaurants in 2024, including three full-service locations with an optimized footprint. The company continues to focus on lowering build costs to support industry-leading returns on investment.
Conclusion
While Portillos Inc (PTLO, Financial) showed revenue growth and improved operating income, the decline in same-restaurant sales and net income presents challenges. The company's strategic focus on expanding its restaurant footprint and managing costs will be crucial in navigating these challenges and driving future growth.
Explore the complete 8-K earnings release (here) from Portillos Inc for further details.
