Inflation continues to hound Portillo's.
For the second straight quarter, the Chicago-based Italian beef chain said "unprecedented" commodity inflation took a bite out of its margins. Costs for beef, pork and chicken, it said, were particularly high—and are expected to remain elevated by 13% to 15% through the rest of the year.
Its restaurant-level adjusted EBITDA margins fell by more than 5 points in the period, to 25.5% from 30.6% a year ago. (EBITDA stands for earnings before interest, taxes, depreciation and amortization.) Portillo's raised prices by a total of about 5% in the first half of the year to help offset the higher costs.
Same-store sales for the quarter rose 1.9% year over year, which the company hinted was due to difficult comparisons to last year, when sales rose 25%. Average check increased 4.8%, and there was a 2.7% same-store sales impact from a change in how the company records third-party delivery pricing. Traffic, on the other hand, fell 5.6%.
Portillo's revenues in the period rose 7% year over year, to $150.6 million. The 71-unit chain also opened two new restaurants in the quarter.
“Our second quarter results demonstrated the consistency and durability of our brand,” CEO Michael Osanloo said in a statement. “We remain hyperfocused on team member engagement, our value proposition and our overall guest experience. This, in turn, drove solid top-line and bottom-line results that are in-line with our long-term targets.”
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