Portillo’s stock price jumped nearly 16% Tuesday on its report of positive traffic, revenue growth and record new unit development during its fourth quarter and fiscal 2023. And the Chicago-style fast casual said it has even more tricks up its sleeve for 2024.
For the quarter and fiscal year ended Dec. 31, Portillo’s reported total revenue rose 24.5% to $187.9 million and 15.8% to $679.9 million, respectively.
Same-store sales increased 4.4% for the quarter and 5.7% for the year. For the quarter, that comp growth was driven by a 3.1% increase in average check and a 1.3% transactions boost.
Portillo’s raised prices twice in 2023 and added another 1.5% increase in January, for an effective price increase of nearly 5% during the first quarter. Whether the chain will pass along another price bump remains uncertain.
“It’s still early in the year on how we’re going to approach pricing as we go into this year,” CFO Michelle Hook told analysts Tuesday, according to a transcript from financial services site AlphaSense. “As you know, we always take an approach that generally we want to offset our inflationary pressures with price. Having said that, though, you all know that the consumer right now is a little bit shaky, and so we need to be careful in how we approach pricing.”
Portillo’s opened a dozen new restaurants in 2023—a record. Half of those stores debuted during the fourth quarter. The company said it has committed to at least nine new restaurants for 2024, five of which are currently under construction.
CEO Michael Osanloo called Portillo’s a master at flexing each of its multichannel capabilities, including digital, drive-thru and, an area of renewed interest, catering.
In 2023, the operator invested in its catering offerings, including a new concierge service that offers a “high-touch ordering experience,” Osanloo said.
“These investments are driving strong catering sales and will help us to continue to grow this channel,” he said, adding that catering currently represents about 5% of total revenue. “We know it can be more. We’re excited about the opportunities to grow this channel by marketing additional catering occasions and expanding this channel across our new markets.”
Portillo’s pickup-only concept, still in its infancy, is another bright spot, he said.
The Italian beef-slinger opened its first restaurant without a dining room in early 2022 in Joliet, Ill., and recently opened a second location in Rosemont, Ill.
The Joliet store is about half the size of a traditional Portillo’s and features a triple drive-thru. Portillo’s said it is still working out the kinks on the prototype but that it will soon be ready to “grow aggressively.”
“In Joliet, we realized we overbuilt the kitchen,” Osanloo said. “We probably under-built the amount of space necessary for teams. And I think, frankly, we underestimated how many people would walk up and order food, and we were not quite as well prepared for walk-in business.”
Some of those headaches have been remedied in the Rosemont location, he said. But there’s a bit more tinkering to do.
“I really want to stew a bit to make sure that we’ve learned everything we need to learn,” he said. “Do we have the right kitchen line, do we have enough space for our team members, are we appropriately friendly to walk-ups and people who just want to come in and get their food and eat at the counter maybe? And so we're learning all of that and my expectation is that we'll probably have one more iteration to perfect the model and then we can hit go and grow aggressively.”
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.