Michael Osanloo is out as president and CEO of Portillo’s, the company said Monday.
Osanloo, who has led the chain since 2018, will be replaced by board chair Michael Miles Jr., who will serve as interim, effective immediately. The board has also established a search committee, including recent board appointees G.J. Hart and Gene Lee, as well as Paulette Dodson.
Osanloo, who is also leaving his board seat, will support the transition as special advisor over the next 90 days.
“On behalf of the full board, I want to thank Michael for his leadership over the past seven years and the role he played in guiding the company through its IPO and expansion to new markets,” said Miles, in a statement. “The Portillo’s brand resonates deeply with our guests, but our recent performance has not measured up to expectations. After careful consideration, the board believes, and Michael agrees, that now is the right time for a leadership transition. We are grateful to Michael for his many contributions to the business and wish him all the best in his future endeavors.”
The move comes after the Chicago-based Portillo’s announced it was slowing growth and cancelling a test of breakfast amid slowing sales.
In a preliminary third-quarter update, Portillo’s announced a “strategic reset” to focus on driving traffic and improving restaurant performance.
The company expects same-store sales to decline between 2% to 2.5% for the quarter. And for the year, projections were downgraded. Same-store sales are expected to decline between 1% to 1.5%, compared with an expected increase between 1% to 3% projected earlier.
Known for units with an average unit volume north of $8.5 million in the Chicagoland area, Osanloo led an aggressive push outside Illinois into the Sun Belt, including Florida, Texas and Arizona, where population rates are growing.
And after initial reports of the brand booming in Texas, in the second quarter Portillo’s began seeing “flattish” sales there as Portillo’s moved into markets like Houston, raising concerns that the 90-unit chain was growing too fast. Traffic declined 1.4% in the second quarter.
Osanloo also led the rollout of digital kiosks across the system, and pledged to bring down buildout costs with smaller, more strategically engineered units.
Portillo’s, however, has also been dealing with Engaged Capital, an activist investor pushing for change on the board.
That effort brought Chipotle president Jack Hartung to Portillo’s board earlier this year, and almost brought former Salad and Go CEO Charlie Morrison, who was nominated. Morrison, however, dropped out of contention to take the job as CEO of Jersey Mike’s.
Lee, the former CEO and chair of Darden Restaurants, has been appointed lead independent director during the transition period.
Osanloo said in a statement that he was proud of his accomplishments with the brand.
“Leading Portillo’s has been one of the great honors of my career,” he said. “I am so thankful to my leadership team and all our team members whose hard work and heart make this brand iconic.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.