Portillo's raises 2026 adjusted EBITDA target to $98M-$101M
Full-year 2026 Adjusted EBITDA guidance is $98-$101 million, while most planned closures are expected in fiscal fourth quarter 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Portillo’s Inc. reported third-quarter 2026 revenue of $194.1 million for the quarter ended September 27, 2026, up 7.0% from $181.4 million a year earlier. Same-restaurant sales rose 1.4%. Net income increased to $4.8 million from $0.8 million, and Adjusted EBITDA rose to $26.5 million from $21.4 million. For the first three quarters, net income was $11.4 million versus $14.8 million.
Portillo’s raised its fiscal 2026 Adjusted EBITDA target to $98-$101 million from $92-$96 million and set a revenue target of $768-$773 million. The outlook also retains a target of 8 new units. The board approved a plan to close a mid-to-high single digit number of underperforming restaurants outside Chicagoland, with most closures expected in fiscal fourth quarter 2026. The company expects material cash and non-cash charges, most in that quarter.
The strategy centers on operational excellence, integrated marketing and disciplined development, supported by financial rigor and discipline. Portillo’s expects annual same-restaurant sales of 2% to 3%; all new restaurants beginning in 2028 are targeted for cash-on-cash returns greater than 20%. Its approximately 4,600-square-foot 2028 prototype is more than 40% smaller than the previous average restaurant and requires approximately 1.5 acres versus 3.0 acres historically.
5 points · 1 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.Fiscal 2026 Adjusted EBITDA target increased to $98-$101 million.
- Moderate pointThird-quarter revenue increased 7.0% to $194.1 million.
- Moderate pointThird-quarter net income rose to $4.8 million from $0.8 million.
- Moderate pointAdjusted EBITDA rose 23.7% to $26.5 million in the quarter.
- Moderate pointNine-month operating cash flow rose to $61.8 million from $48.7 million.
Negative
- Moderate pointNine-month net income fell to $11.4 million from $14.8 million.
- Moderate pointNine-month operating income declined to $30.0 million from $33.3 million.
Filing Explained
Portillo’s says it cannot yet reasonably estimate the total closure charges or the amounts for each major type; it will make an SEC filing when it can determine those estimates, leaving the cost impact unresolved for now.
8-K Event Classification
4 items: 2.02, 2.05, 7.01, 9.01
4 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 2.05
Costs Associated with Exit or Disposal Activities
Financial
The company committed to an exit plan involving layoffs, facility closures, or restructuring charges.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Third-quarter revenue: $194.1 million
Same-restaurant sales: 1.4%
Net income: $4.8 million
+5 more
8 metrics
Third-quarter revenue
$194.1 million
Quarter ended September 27, 2026; $181.4 million in the prior-year quarter
Same-restaurant sales
1.4%
Quarter ended September 27, 2026
Net income
$4.8 million
Quarter ended September 27, 2026; $0.8 million in the prior-year quarter
Adjusted EBITDA
$26.5 million
Quarter ended September 27, 2026; $21.4 million in the prior-year quarter
Fiscal 2026 revenue target
$768-$773 million
Current fiscal 2026 target
Fiscal 2026 Adjusted EBITDA target
$98-$101 million
Raised from the prior target of $92-$96 million
New units
8 new units
Fiscal 2026 target
Planned restaurant prototype
Approximately 4,600 square feet
2028 prototype
Key Terms
same-restaurant sales, Comparable Restaurant Base, Adjusted EBITDA, Restaurant-Level Adjusted EBITDA, +2 more
6 terms
same-restaurant sales financial
"Change in same-restaurant sales"
Same-restaurant sales measure how revenue from locations open for a full prior period compares to revenue from those same locations in the current period, isolating performance at existing stores rather than growth from new ones. Investors care because it reveals whether a business is selling more to the same customers or improving pricing and efficiency—like checking whether a bakery is selling more loaves at the same shops rather than just opening more bakeries—and helps judge organic growth and management execution.
Comparable Restaurant Base financial
"restaurants in the Comparable Restaurant Base"
A comparable restaurant base is the set of outlets that have been open long enough and consistently operating so their sales can be directly compared across different time periods, excluding recently opened, temporarily closed, or permanently shuttered locations. Investors watch this metric because it isolates true same-location sales trends—like checking the temperature at the same weather station over time—so they can tell whether demand is rising at existing restaurants or growth is coming mainly from adding new sites.
Adjusted EBITDA financial
"Adjusted EBITDA represents net income before depreciation and amortization"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Restaurant-Level Adjusted EBITDA financial
"Restaurant-Level Adjusted EBITDA excludes corporate level expenses"
Restaurant-level adjusted EBITDA measures the cash profit generated by the restaurants themselves, before corporate overhead, interest, taxes, depreciation and other one-time or non-cash items. Think of it as the profit from each store’s everyday operations — like a household budget that counts only the money coming in and out of the kitchen, not the family’s mortgage or investment income — and it helps investors compare underlying operating strength and margins across restaurant chains.
cash-on-cash returns financial
"cash-on-cash returns greater than 20%"
A cash-on-cash return measures the annual cash income an investor receives from an investment divided by the actual cash they put in. Think of it like the yearly interest you get on the money you laid down — for a rental, it’s the yearly rent you pocket compared with your initial down payment. Investors use it to compare how much immediate cash a deal generates, since it ignores later price changes, tax effects and non-cash accounting items.
Tax Receivable Agreement liability adjustment financial
"Tax Receivable Agreement liability adjustment"
Earnings Snapshot
Revenue: $194.1 million · Guidance included
Third quarter ended September 27, 2026
Revenue
$194.1 million
Increased 7.0%, or $12.6 million, year over year
Net income
$4.8 million
Increased $4.0 million year over year
Adjusted EBITDA
$26.5 million
Increased $5.1 million, or 23.7%, year over year
Same-restaurant sales
1.4%
Compared with (0.8)% in the prior-year quarter
Guidance
Fiscal 2026 targets: revenue of $768-$773 million and Adjusted EBITDA of $98-$101 million; the prior Adjusted EBITDA target was $92-$96 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did PTLO perform in the third quarter of 2026?
PTLO reported $194.1 million in revenue, up 7.0% year over year, and same-restaurant sales increased 1.4%. Net income was $4.8 million, compared with $0.8 million, while Adjusted EBITDA was $26.5 million, compared with $21.4 million.
What is PTLO's fiscal 2026 financial outlook?
Portillo’s set fiscal 2026 revenue targets of $768-$773 million and Adjusted EBITDA targets of $98-$101 million. The outlook also includes 8 new units, a restaurant-level Adjusted EBITDA margin target of 20.0% to 20.5%, and approximately $55 million in capital expenditures.
How large is Portillo’s new restaurant prototype?
Portillo’s says its 2028 prototype is approximately 4,600 square feet, more than 40% smaller than the previous average restaurant. The site requires approximately 1.5 acres, compared with 3.0 acres historically.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM | ||
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 5, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| (Address of principal executive offices) | ||||||||
(630 )-954-3773
(Registrant’s telephone number, including area code)
| N/A | ||
| (Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 5, 2026, Portillo’s Inc. (NASDAQ: PTLO) (the “Company”) issued a press release reporting results for the third quarter ended September 27, 2026. A copy of the earnings press release is attached hereto as Exhibit 99.1.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On November 4, 2026, the Board of Directors of Portillo's Inc. approved a plan to close a mid-to-high single digit number of underperforming restaurants outside of Chicagoland, with the majority occurring in the fiscal fourth quarter of 2026. In making this determination, the Company evaluated each restaurant’s sales performance, restaurant-level margins, and projected operating performance. These actions are part of the Company's ongoing efforts to improve restaurant-level profitability, strengthen returns on invested capital and optimize its restaurant portfolio.
In connection with the plan, the Company expects to incur charges associated with the restaurant closures, including lease-related costs, employee separation costs, asset impairment charges and other exit-related costs.
At this time, the Company is unable to reasonably estimate the total amount or range of amounts expected to be incurred, or the amount or range of amounts for each major type of charge. However, the Company expects that its analysis will result in material cash and non-cash charges, the majority of which are expected to be recognized in the fiscal fourth quarter of 2026. When the Company is able to make a determination of the estimates, it will make the appropriate SEC filing.
Item 7.01 Regulation FD Disclosure.
The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
99.1 | Portillo’s Inc. press release dated November 5, 2026 announcing financial results for the third quarter ended September 27, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| Portillo's Inc. | |||||||||||
| (Registrant) | |||||||||||
Date: November 5, 2026 | By: | /s/ Kevin Kalicak | |||||||||
| Kevin Kalicak | |||||||||||
| Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | |||||||||||
Portillo’s Inc. Announces Third Quarter 2026 Financial Results
Raises Full-Year Outlook and Introduces Strategic Plan to Strengthen Fundamentals and Drive Long-Term Value Creation
Oak Brook, IL—November 5, 2026—Portillo’s Inc. (“Portillo’s” or the “Company”) (NASDAQ: PTLO), a restaurant concept known for its menu of Chicago-style favorites, today reported financial results for the third quarter ended September 27, 2026.
Third Quarter 2026 Highlights (vs. Third Quarter 2025):
•Total revenue of $194.1 million, an increase of 7.0% or $12.6 million
•Same-restaurant sales increase of 1.4%
•Net income of $4.8 million, an increase of $4.0 million; Adjusted EBITDA(1) of $26.5 million, an increase of $5.1 million
•Raises full-year 2026 Adjusted EBITDA guidance
(1) Adjusted EBITDA is a non-GAAP measure. Please see definition and the reconciliation of this non-GAAP measure accompanying this release.
“We delivered third-quarter results ahead of our expectations, and I’m encouraged by the early progress from the actions we have taken to strengthen our operations and business fundamentals,” said Brett Patterson, Portillo’s Chief Executive Officer. “While we are encouraged by the progress, one quarter does not establish a trend. We have significant work ahead, and our focus remains on executing consistently and building a foundation for durable profitable growth.”
“Today, we are also introducing a strategic plan focused on strengthening our core business, driving profitable growth and creating shareholder value,” Patterson continued. “Our strategy is centered on running great restaurants, leveraging integrated marketing and pursuing disciplined development, all underpinned by a financial framework that guides decisions, strengthens accountability and positions Portillo’s for long-term success.”
“Lastly, we evaluated every restaurant in the system and made the decision to close a select group of underperforming locations outside of Chicagoland,” said Patterson. “This will improve portfolio quality, strengthen returns on invested capital and reflect our commitment to disciplined growth.”
Third Quarter 2026 Financial and Operating Results
Revenues for the quarter ended September 27, 2026 were $194.1 million compared to $181.4 million for the quarter ended September 28, 2025, an increase of $12.6 million or 7.0%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026 and an increase in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined below) contributed $10.3 million of the total year-over-year increase. Same-restaurant sales increased 1.4%, or $2.4 million, in the quarter. The same-restaurant sales increase was attributable to an increase in average check of 2.1%, partially offset by a decrease in transactions of 0.7%. The higher average check was driven by an approximate 2.1% increase in certain menu prices. For the purpose of calculating same-restaurant sales for the quarter ended September 27, 2026, sales for 87 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.
Total restaurant operating expenses for the quarter ended September 27, 2026 were $154.0 million compared to $144.7 million for the quarter ended September 28, 2025, an increase of $9.3 million or 6.4%. The increase was primarily driven by the opening of eight restaurants in fiscal 2025 and seven restaurants during the three quarters ended September 27, 2026.
General and administrative expenses for the quarter ended September 27, 2026 were $19.8 million compared to $20.0 million for the quarter ended September 28, 2025, a decrease of $0.3 million or 1.4%. This decrease was primarily attributable to $3.3 million of lower dead site costs resulting from our 2025 strategic reset. This was partially offset by $1.4 million of restructuring charges related to a workforce reduction at the Restaurant Support Center and by the absence of a $1.1 million net benefit recognized in the prior year in connection with the Chief Executive Officer transition. The prior year benefit was driven by the forfeiture of equity awards, partially offset by severance and other transition-related expenses.
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Operating income for the quarter ended September 27, 2026 was $11.8 million compared to $5.4 million for the quarter ended September 28, 2025, an increase of $6.3 million or 116.8%, primarily due to the aforementioned changes in revenue and expenses, lower pre-opening expenses of $2.6 million, and a favorable year-over-year change in other (income) loss, net, of $1.1 million, as the prior-year period included a legacy Barnelli’s trade name impairment charge that did not recur in the current year.
Net income for the quarter ended September 27, 2026 was $4.8 million compared to a net income of $0.8 million for the quarter ended September 28, 2025, an increase of $4.0 million or 508.2%. The increase in net income was primarily due to an increase in operating income of $6.3 million due to the aforementioned factors, partially offset by an increase in income tax expense of $3.0 million and a decrease in the Tax Receivable Agreement liability adjustment of $0.6 million.
Restaurant-Level Adjusted EBITDA* for the quarter ended September 27, 2026 was $40.1 million compared to $36.7 million for the quarter ended September 28, 2025, an increase of $3.4 million or 9.3%.
Adjusted EBITDA* for the quarter ended September 27, 2026 was $26.5 million compared to $21.4 million for the quarter ended September 28, 2025, an increase of $5.1 million or 23.7%.
*A reconciliation of Restaurant-Level Adjusted EBITDA and Adjusted EBITDA and the nearest GAAP financial measure is included under “Non-GAAP Measures” in the accompanying financial data below.
Planned Restaurant Closures
Portillo’s expects to close a mid-to-high single digit number of underperforming restaurants outside of Chicagoland, with the majority occurring in the fiscal fourth quarter of 2026. In making this determination, the Company evaluated each restaurant’s sales performance, restaurant-level margins, and projected operating performance. These actions are part of the Company's ongoing efforts to improve restaurant-level profitability, strengthen returns on invested capital and optimize its restaurant portfolio. The Company expects the analysis to result in material cash and non-cash charges mostly in the fiscal fourth quarter of 2026.
New Restaurant Openings
During the three quarters ended September 27, 2026, we opened seven new restaurants for a total of 109 restaurants, as of the filing of this press release, including a restaurant owned by C&O, of which Portillo’s owns 50% of the equity. We plan to open one additional restaurant in the fourth quarter of 2026, which will be our second in-line location and will be located in Chicago, Illinois.
Below are the restaurants opened thus far in fiscal 2026:
| Location | Opening Month | Fiscal Quarter Opened | ||||||
| Fort Worth, Texas | January 2026 | Q1 2026 | ||||||
| Humble, Texas | February 2026 | Q1 2026 | ||||||
| Dallas, Texas | March 2026 | Q1 2026 | ||||||
| El Paso, Texas | March 2026 | Q1 2026 | ||||||
| Frisco, Texas | April 2026 | Q2 2026 | ||||||
| Schertz, Texas | May 2026 | Q2 2026 | ||||||
| Dallas-Fort Worth International Airport | May 2026 | Q2 2026 | ||||||
Portillo’s Details Growth Strategy to Strengthen Fundamentals and Create Shareholder Value
The foundation of Portillo’s strategy is rooted in three pillars: Operational Excellence, Integrated Marketing and Disciplined Development, supported by Financial Rigor and Discipline. The strategy reflects a candid assessment of the business and lessons from prior decisions, while preserving the distinctive food, hospitality and experience that make Portillo’s special.
Over the past nine months, Portillo’s has taken decisive actions to sharpen the Company’s focus and improve its cost structure:
•Strengthened its leadership team and right-sized its corporate structure;
•Built a deeper understanding of its guests through formal research;
•Identified meaningful operational and supply chain savings;
•Implemented a more rigorous site-selection model and developed a new prototype;
•Exited future real estate agreements that lacked sufficient return potential; and
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•Evaluated its restaurant portfolio and identified underperforming restaurants for closure.
Formal third-party research studies confirmed that Portillo’s brand strength extends beyond the food to powerful emotional connections with guests in Chicagoland and beyond. These insights underpin the strategy and will inform a consistent decision framework that guides the path toward sustainable, profitable growth.
OPERATIONAL EXCELLENCE
Strengthened regional leadership support.
Portillo’s has refined its regional leadership structure, reducing the number of restaurants each field leader oversees and the geographic distance between them. This allows field leaders to spend more time in each restaurant and provide focused, hands-on support to restaurant teams. The goal is consistent, high-quality food served accurately and on time to every guest, across every channel.
Elevating team member and management training to deliver consistent guest experiences.
Portillo’s is updating all hourly and management training programs to equip restaurant teams with the skills, knowledge and tools needed to run great restaurants. Certified trainers will support these programs to ensure standards are followed consistently and training is effective, allowing well-trained team members to focus on delivering the unique Portillo’s experience.
Modernizing restaurant technology and equipment to improve accuracy and speed of service.
Portillo’s is evaluating and investing in restaurant technology and equipment to improve reliability, product quality and operational consistency. These investments are expected to help restaurant teams deliver orders accurately, faster and, ultimately, with stronger hospitality.
INTEGRATED MARKETING
Refining the brand positioning and consumer targeting to drive growth.
Guided by insights from the recent brand perception and customer segmentation studies, Portillo’s will better communicate its unique value proposition. The Company will prioritize two distinct millennial audiences identified in the research, which represent meaningful growth potential. Supported by a more refined brand positioning, creative approach and media strategy, Portillo’s aims to build on its strong emotional connection with these guests to drive relevance, demand and profitable growth.
Building digital and loyalty capabilities that match the strength of the brand.
Portillo’s is developing a new digital roadmap and modernizing its marketing technology stack to improve the digital experience and drive conversion and sales. As part of this work, the Company is conducting a full assessment of Portillo’s Perks®, its loyalty program, to simplify the program, drive engagement and increase visit frequency.
Making core-menu quality and culinary innovation a priority.
Portillo’s is returning to its roots by revitalizing its culinary culture, with a new Executive Chef overseeing menu strategy, core-menu quality and an innovation pipeline that creates food news and reasons to visit.
DISCIPLINED DEVELOPMENT
Implementing stricter standards governing growth.
New data-driven sales modeling, paired with strict underwriting discipline, establishes a rigorous framework for new site selection. Locations will advance only after meeting cash-on-cash return targets consistent with the Company’s new-restaurant targets as well as passing qualifying market and site reviews.
Balancing new-market expansion and infill development.
Portillo’s is balancing infill opportunities in existing markets with expansion into new, strategically adjacent markets. Infill development leverages operational efficiencies and existing restaurant support infrastructure, while adjacent markets capitalize on significant whitespace potential. The Company will prioritize markets with favorable development economics to drive sustainable, profitable growth.
Introducing a new restaurant prototype targeting a reduced capital investment.
The 2028 prototype is approximately 4,600 square feet – more than 40% smaller than the previous average Portillo’s restaurant – without sacrificing the potential to generate high volumes. The site requires approximately 1.5 acres versus 3.0 acres historically. An optimized kitchen, standardized design and greater site flexibility are expected to improve throughput and productivity.
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FINANCIAL RIGOR AND DISCIPLINE
Driving financial accountability and cost efficiency.
Portillo’s is strengthening restaurant-level accountability by aligning incentive compensation with sales and profit growth. The Company remains focused on identifying savings in our operating model while preserving the Portillo’s experience and investing in initiatives that drive demand, enhance food quality and improve training to support long-term growth.
Prioritizing capital investments to drive shareholder value.
Portillo’s will take a disciplined approach to capital allocation. First, the Company will prioritize investment in existing restaurants, including technology and maintenance to keep them clean, safe and well-maintained. Second, it will invest in new restaurant growth with projected returns on invested capital above its risk-adjusted cost of capital. Finally, excess cash will be directed toward reducing debt and balance sheet leverage to support long-term financial stability and shareholder value.
Establishing a path to sustainable, profitable growth.
Based on the collective actions of its strategy, Portillo’s expects to deliver annual same-restaurant sales of 2% to 3%, and in the next three years, will ramp new restaurant growth to a high-single-digit percentage and expand margins, leveraging sales growth and efficiencies. All new restaurants beginning in 2028 will be targeted to achieve cash-on-cash returns greater than 20%.
Fiscal 2026 Financial Targets
Based on current expectations, inclusive of expected restaurant closures in the fourth quarter, fiscal 2026 outlook has been updated as follows:
| Prior Target | Current Targets | ||||||||||
| New Units | 8 new units | 8 new units | |||||||||
| Revenue | N/A | $768-$773 million | |||||||||
| Commodity inflation | Mid single digit | Mid single digit | |||||||||
| Labor inflation | 3% to 3.5% | Low single digit | |||||||||
Restaurant-level adjusted EBITDA margin* | 19.5% to 20.5% | 20.0% to 20.5% | |||||||||
| General and administrative expenses | $78-$82 million | $80-$82 million | |||||||||
| Adjusted EBITDA* | $92-$96 million | $98-$101 million | |||||||||
| Capital expenditures | $55-$60 million | Approximately $55 million | |||||||||
*We are unable to reconcile the financial target for adjusted EBITDA and restaurant-level adjusted EBITDA margin to net income (loss) and operating income (loss) margin, the respective corresponding U.S. GAAP measure, due to variability and difficulty in making accurate forecasts and projections and because not all information necessary to prepare the reconciliation is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information because we cannot accurately predict all of the components of the adjusted calculations and the non-GAAP measure may be materially different than the GAAP measure.
The following definitions apply to these terms as used in this release:
Change in Same-Restaurant Sales - The change in same-restaurant sales is the percentage change in year-over-year revenue for the Comparable Restaurant Base, which is defined as the number of restaurants open for at least 24 full fiscal periods. As of the quarters ended September 27, 2026 and September 28, 2025, there were 87 and 76 restaurants in our Comparable Restaurant Base, respectively.
A change in same-restaurant sales is the result of a change in restaurant transactions, average guest check, or a combination of the two. We gather daily sales data and regularly analyze the guest transaction counts and the mix of menu items sold to strategically evaluate menu pricing and demand. Measuring our change in same-restaurant sales allows management to evaluate the performance of our existing restaurant base. We believe this measure provides a consistent comparison of restaurant sales results and trends across periods within our core, established restaurant base, and enables investors to better understand and evaluate the Company’s historical and prospective operating performance.
Average Unit Volume - AUV is the total revenue (excluding gift card and Portillo’s Perks loyalty program breakage) recognized in the Comparable Restaurant Base, including C&O, divided by the number of restaurants in the Comparable Restaurant Base, including C&O, by period.
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This key performance indicator allows management to assess changes in consumer spending patterns at our restaurants and the overall performance of our restaurant base.
Adjusted EBITDA and Adjusted EBITDA Margin - Adjusted EBITDA represents net income before depreciation and amortization, interest expense, interest income, and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net income, the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues, net. See also “Non-GAAP Financial Measures.”
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin - Restaurant-Level Adjusted EBITDA is defined as revenue, less restaurant operating expenses, which include food, beverage and packaging costs, labor expenses, occupancy expenses and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenues, net. See also “Non-GAAP Financial Measures.”
For more information about the Company’s Non-GAAP measures, how they are calculated and reconciled and why management believes that they are useful, see “Non-GAAP Financial Measures” below.
Earnings Conference Call
The Company will host a conference call to discuss its financial results for the third quarter on Thursday, November 5, 2026, at 10:00 AM ET. The conference call can be accessed live over the phone by dialing 877-407-3982. A telephone replay will be available shortly after the call has concluded and can be accessed by dialing 844-512-2921, and using passcode #13748482. The webcast replay will be available at investors.portillos.com shortly after the call has concluded.
About Portillo’s
Portillo’s (NASDAQ: PTLO) has grown from a small hot dog trailer in Chicago to more than 100 restaurants across 11 states. Known for its diverse menu of Chicago-style favorites like Italian beef sandwiches, Chicago-style hot dogs, char-broiled burgers, fresh salads and signature chocolate cake, Portillo’s is beloved in both its home of Chicagoland and across new and growing markets. Portillo’s operates a company-owned model of not just restaurants, but experience-focused destinations that blend dine-in, drive-thru, takeout and delivery to serve guests with the food they crave. And now, after six decades of success and counting, Portillo’s is on a mission to bring its iconic food and unforgettable dining experience to guests across the country.
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Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business, and are based on currently available operating, financial and competitive information which are subject to various risks and uncertainties, so you should not place undue reliance on forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "commit," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other similar expressions.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:
•risks related to or arising from our organizational structure;
•risks of food-borne illness and food safety and other health concerns about our food;
•risks relating to the economy and financial markets, including in relation to trade and tax policy changes and other macroeconomic uncertainty, including inflation, fluctuating interest rates, stock market volatility, recession concerns, and other factors;
•risks associated with onboarding new members of management, including the Chief Executive Officer and Chief Financial Officer, the recently announced departure of the Chief People Officer and the related transitions;
•the impact of unionization activities of our Team Members on our reputation, operations and profitability;
•risks associated with our reliance on certain information technology systems, and potential failures or interruptions;
•risks associated with data, privacy, cyber security and the use and implementation of information technology systems, including our digital ordering and payment platforms for our delivery business;
•risks associated with increased adoption, implementation and use of artificial intelligence ("AI") technologies across our business;
•the impact of competition, including from our competitors in the restaurant industry or our own restaurants;
•the increasingly competitive labor market and our ability to attract and retain the best talent and qualified employees;
•the impact of federal, state or local government regulations relating to privacy, data protection, advertising and consumer protection, building and zoning requirements, labor and employment matters, costs of or ability to open new restaurants, or the sale of food and alcoholic beverages;
•inability to achieve our growth strategy, including as a result of, among other things, the availability of suitable new restaurant sites in existing and new markets and opening of new restaurants at the anticipated rate and on the anticipated timeline and cost structure;
•the impact of consumer sentiment and other economic factors on our sales;
•fluctuation in food and other operating costs, tariffs and import taxes, and supply shortages;
•our ability to execute and achieve the expected benefits of our actions to focus on operational priorities, including our brand strategy and cost-saving initiatives; and
•other risks identified in our filings with the Securities and Exchange Commission (the “SEC").
All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in the Company’s most recent Annual Report on Form 10-K, filed with the SEC. All of the Company’s SEC filings are available on the SEC’s website at www.sec.gov. The forward-looking statements included in this press release are made only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Investor Contact:
Chris Brandon, Vice President of Investor Relations
312.931.5578
cbrandon@portillos.com
Media Contact:
Sara Wirth, Director of Communications & PR
press@portillos.com
6
PORTILLO’S INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
| Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| REVENUES, NET | $ | 194,074 | 100.0 | % | $ | 181,428 | 100.0 | % | $ | 575,651 | 100.0 | % | $ | 546,321 | 100.0 | % | |||||||||||||||||||||||||||||||
| COST AND EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||
Restaurant operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Food, beverage and packaging costs | 66,831 | 34.4 | % | 62,619 | 34.5 | % | 199,696 | 34.7 | % | 187,471 | 34.3 | % | |||||||||||||||||||||||||||||||||||
| Labor | 50,447 | 26.0 | % | 48,263 | 26.6 | % | 150,736 | 26.2 | % | 143,471 | 26.3 | % | |||||||||||||||||||||||||||||||||||
| Occupancy | 11,670 | 6.0 | % | 10,524 | 5.8 | % | 34,546 | 6.0 | % | 30,511 | 5.6 | % | |||||||||||||||||||||||||||||||||||
| Other operating expenses | 25,039 | 12.9 | % | 23,331 | 12.9 | % | 72,495 | 12.6 | % | 67,040 | 12.3 | % | |||||||||||||||||||||||||||||||||||
| Total restaurant operating expenses | 153,987 | 79.3 | % | 144,737 | 79.8 | % | 457,473 | 79.5 | % | 428,493 | 78.4 | % | |||||||||||||||||||||||||||||||||||
| General and administrative expenses | 19,754 | 10.2 | % | 20,025 | 11.0 | % | 59,676 | 10.4 | % | 57,726 | 10.6 | % | |||||||||||||||||||||||||||||||||||
| Pre-opening expenses | 614 | 0.3 | % | 3,260 | 1.8 | % | 4,102 | 0.7 | % | 5,465 | 1.0 | % | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 8,338 | 4.3 | % | 7,312 | 4.0 | % | 24,528 | 4.3 | % | 21,489 | 3.9 | % | |||||||||||||||||||||||||||||||||||
| Net income attributable to equity method investment | (393) | (0.2) | % | (452) | (0.2) | % | (1,003) | (0.2) | % | (998) | (0.2) | % | |||||||||||||||||||||||||||||||||||
| Other (income) loss, net | (5) | — | % | 1,112 | 0.6 | % | 828 | 0.1 | % | 800 | 0.1 | % | |||||||||||||||||||||||||||||||||||
OPERATING INCOME | 11,779 | 6.1 | % | 5,434 | 3.0 | % | 30,047 | 5.2 | % | 33,346 | 6.1 | % | |||||||||||||||||||||||||||||||||||
| Interest expense | 5,512 | 2.8 | % | 5,664 | 3.1 | % | 16,811 | 2.9 | % | 17,139 | 3.1 | % | |||||||||||||||||||||||||||||||||||
| Interest income | (77) | — | % | (118) | (0.1) | % | (187) | — | % | (268) | — | % | |||||||||||||||||||||||||||||||||||
Tax Receivable Agreement liability adjustment | (209) | (0.1) | % | 353 | 0.2 | % | (1,381) | (0.2) | % | (2,132) | (0.4) | % | |||||||||||||||||||||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 6,553 | 3.4 | % | (465) | (0.3) | % | 14,804 | 2.6 | % | 18,607 | 3.4 | % | |||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 1,797 | 0.9 | % | (1,247) | (0.7) | % | 3,402 | 0.6 | % | 3,792 | 0.7 | % | |||||||||||||||||||||||||||||||||||
| NET INCOME | 4,756 | 2.5 | % | 782 | 0.4 | % | 11,402 | 2.0 | % | 14,815 | 2.7 | % | |||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to non-controlling interests | 251 | 0.1 | % | (432) | (0.2) | % | 355 | 0.1 | % | 1,584 | 0.3 | % | |||||||||||||||||||||||||||||||||||
| NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. | $ | 4,505 | 2.3 | % | $ | 1,214 | 0.7 | % | $ | 11,047 | 1.9 | % | $ | 13,231 | 2.4 | % | |||||||||||||||||||||||||||||||
| Net income per common share attributable to Portillo’s Inc.: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.06 | $ | 0.02 | $ | 0.15 | $ | 0.20 | |||||||||||||||||||||||||||||||||||||||
| Diluted | $ | 0.06 | $ | 0.02 | $ | 0.15 | $ | 0.19 | |||||||||||||||||||||||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 72,535,289 | 71,908,534 | 72,330,585 | 67,780,566 | |||||||||||||||||||||||||||||||||||||||||||
| Diluted | 73,433,125 | 73,973,710 | 73,087,690 | 70,131,466 | |||||||||||||||||||||||||||||||||||||||||||
7
PORTILLO’S INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| September 27, 2026 | December 28, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents and restricted cash | $ | 24,847 | $ | 19,963 | |||||||
Accounts and tenant improvement receivables | 8,738 | 16,502 | |||||||||
Inventories | 10,855 | 8,207 | |||||||||
Prepaid expenses and other | 5,666 | 6,844 | |||||||||
| Total current assets | 50,106 | 51,516 | |||||||||
| Property and equipment, net | 431,575 | 420,263 | |||||||||
| Operating lease assets | 275,318 | 261,086 | |||||||||
| Goodwill | 394,298 | 394,298 | |||||||||
| Trade names | 221,725 | 221,725 | |||||||||
| Other intangible assets, net | 21,360 | 23,391 | |||||||||
| Equity-method investment | 15,750 | 15,696 | |||||||||
| Deferred tax assets | 207,908 | 211,267 | |||||||||
| Other assets | 6,491 | 7,292 | |||||||||
| Total other assets | 867,532 | 873,669 | |||||||||
| TOTAL ASSETS | $ | 1,624,531 | $ | 1,606,534 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | 35,922 | $ | 43,210 | |||||||
| Current portion of long-term debt | 7,813 | 6,250 | |||||||||
| Current portion of Tax Receivable Agreement liability | 2,348 | 7,910 | |||||||||
| Short-term debt | 85,000 | 90,000 | |||||||||
Deferred revenue | 4,437 | 7,472 | |||||||||
Short-term operating lease liabilities | 8,163 | 6,878 | |||||||||
| Accrued expenses | 39,586 | 32,236 | |||||||||
| Total current liabilities | 183,269 | 193,956 | |||||||||
| LONG-TERM LIABILITIES: | |||||||||||
| Long-term debt, net of current portion | 232,237 | 237,977 | |||||||||
| Tax Receivable Agreement liability | 340,840 | 344,524 | |||||||||
| Long-term operating lease liabilities | 347,616 | 329,190 | |||||||||
| Other long-term liabilities | 3,202 | 3,614 | |||||||||
| Total long-term liabilities | 923,895 | 915,305 | |||||||||
| Total liabilities | 1,107,164 | 1,109,261 | |||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, none issued or outstanding | — | — | |||||||||
Class A common stock, $0.01 par value per share, 380,000,000 shares authorized, and 72,577,166 and 71,971,736 shares issued and outstanding at September 27, 2026 and December 28, 2025, respectively. | 726 | 720 | |||||||||
Class B common stock, $0.00001 par value per share, 50,000,000 shares authorized, and 3,424,546 and 3,442,335 shares issued and outstanding at September 27, 2026 and December 28, 2025, respectively. | — | — | |||||||||
| Additional paid-in capital | 412,647 | 404,603 | |||||||||
Retained earnings | 73,521 | 62,474 | |||||||||
| Total stockholders' equity attributable to Portillo's Inc. | 486,894 | 467,797 | |||||||||
| Non-controlling interest | 30,473 | 29,476 | |||||||||
| Total stockholders' equity | 517,367 | 497,273 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,624,531 | $ | 1,606,534 | |||||||
8
PORTILLO’S INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Three Quarters Ended | |||||||||||
| September 27, 2026 | September 28, 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 11,402 | $ | 14,815 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 24,528 | 21,489 | |||||||||
| Amortization of debt issuance costs and discount | 510 | 521 | |||||||||
| Loss on sales of assets | 425 | 248 | |||||||||
| Equity-based compensation | 8,105 | 4,288 | |||||||||
| Deferred income tax expense | 3,402 | 3,792 | |||||||||
| Tax Receivable Agreement liability adjustment | (1,381) | (2,132) | |||||||||
| Gift card breakage | (712) | (656) | |||||||||
| Asset impairment | — | 2,200 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 1,207 | (123) | |||||||||
| Receivables from related parties | (82) | (102) | |||||||||
Inventories | (2,648) | (1,310) | |||||||||
| Other current assets | 1,179 | 2,280 | |||||||||
| Operating lease assets | 7,340 | 7,079 | |||||||||
| Accounts payable | (1,538) | (6,696) | |||||||||
| Accrued expenses and other liabilities | 4,990 | 2,004 | |||||||||
Operating lease liabilities | (2,813) | (2,296) | |||||||||
| Deferred lease incentives | 7,509 | 2,186 | |||||||||
| Other assets and liabilities | 400 | 1,154 | |||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 61,823 | 48,741 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchase of property and equipment | (40,076) | (58,097) | |||||||||
Other | 174 | 18 | |||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (39,902) | (58,079) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| (Repayments) borrowings from short-term debt, net | (5,000) | 52,000 | |||||||||
| Payments of long-term debt | (4,687) | (40,312) | |||||||||
| Distributions paid to non-controlling interest holders | (376) | (1,291) | |||||||||
| Proceeds from stock option exercises | 434 | 2,727 | |||||||||
| Employee withholding taxes related to net settled equity awards | (760) | (984) | |||||||||
| Proceeds from Employee Stock Purchase Plan purchases | 268 | 365 | |||||||||
| Payments of Tax Receivable Agreement liability | (7,913) | (7,686) | |||||||||
| Payment of deferred financing costs | — | (1,263) | |||||||||
Contributions from non-controlling interests | 997 | 140 | |||||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (17,037) | 3,696 | |||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 4,884 | (5,642) | |||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 19,963 | 22,876 | |||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | $ | 24,847 | $ | 17,234 | |||||||
9
PORTILLO’S INC.
SELECTED OPERATING DATA AND NON-GAAP FINANCIAL MEASURES
| Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Total Restaurants (a) | 109 | 98 | 109 | 98 | |||||||||||||||||||
| AUV (in millions) (a) | N/A | N/A | $ | 8.2 | $ | 8.6 | |||||||||||||||||
| Change in same-restaurant sales (b) | 1.4 | % | (0.8) | % | —% | 0.5 | % | ||||||||||||||||
| Adjusted EBITDA (in thousands) (b) | $ | 26,457 | $ | 21,387 | $ | 74,728 | $ | 72,662 | |||||||||||||||
| Adjusted EBITDA Margin (b) | 13.6 | % | 11.8 | % | 13.0 | % | 13.3 | % | |||||||||||||||
| Restaurant-Level Adjusted EBITDA (in thousands) (b) | $ | 40,087 | $ | 36,691 | $ | 118,178 | $ | 117,828 | |||||||||||||||
| Restaurant-Level Adjusted EBITDA Margin (b) | 20.7 | % | 20.2 | % | 20.5 | % | 21.6 | % | |||||||||||||||
(a) Includes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity. AUVs for the quarters ended September 27, 2026 and September 28, 2025 represent AUVs for the twelve months ended September 27, 2026 and September 28, 2025, respectively. Total restaurants indicated are as of September 27, 2026 and September 28, 2025, respectively.
(b) Excludes C&O.
10
PORTILLO’S INC.
NON-GAAP FINANCIAL MEASURES
To supplement the consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Adjusted EBITDA and Adjusted EBITDA Margin, and Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin. Accordingly, Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are not required by, nor presented in accordance with GAAP, but rather are supplemental measures of operating performance of our restaurants. You should be aware that these measures are not indicative of overall results for the Company and that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin do not accrue directly to the benefit of stockholders because of corporate-level expenses excluded from such measures. These measures are supplemental measures of operating performance and our calculations thereof may not be comparable to similar measures reported by other companies. These measures are important measures to evaluate the performance and profitability of our restaurants, individually and in the aggregate, but also have important limitations as analytical tools and should not be considered in isolation as substitutes for analysis of our results as reported under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents net income before depreciation and amortization, interest expense, interest income, and income taxes, adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing core operating performance as identified in the reconciliation of net income, the most directly comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of revenues, net.
We use Adjusted EBITDA and Adjusted EBITDA Margin (i) to evaluate our operating results and the effectiveness of our business strategies, (ii) internally as benchmarks to compare our performance to that of our competitors and (iii) as factors in evaluating management’s performance when determining incentive compensation.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important measures of operating performance because they eliminate the impact of expenses that do not relate to our core operating performance.
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin
Restaurant-Level Adjusted EBITDA is defined as revenue, less restaurant operating expenses, which include food, beverage and packaging costs, labor expenses, occupancy expenses and other operating expenses. Restaurant-Level Adjusted EBITDA excludes corporate level expenses and depreciation and amortization on restaurant property and equipment. Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level Adjusted EBITDA as a percentage of revenues, net.
We believe that Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin are important measures to evaluate the performance and profitability of our restaurants, individually and in the aggregate.
11
See below for a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA and Adjusted EBITDA Margin (in thousands):
| Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Net income | $ | 4,756 | $ | 782 | $ | 11,402 | $ | 14,815 | |||||||||||||||
| Net income margin | 2.5 | % | 0.4 | % | 2.0 | % | 2.7 | % | |||||||||||||||
| Depreciation and amortization | 8,338 | 7,312 | 24,528 | 21,489 | |||||||||||||||||||
| Interest expense | 5,512 | 5,664 | 16,811 | 17,139 | |||||||||||||||||||
| Interest income | (77) | (118) | (187) | (268) | |||||||||||||||||||
| Income tax expense (benefit) | 1,797 | (1,247) | 3,402 | 3,792 | |||||||||||||||||||
| EBITDA | $ | 20,326 | $ | 12,393 | $ | 55,956 | $ | 56,967 | |||||||||||||||
| Deferred rent (1) | 1,557 | 1,952 | 4,788 | 4,870 | |||||||||||||||||||
| Equity-based compensation | 2,271 | (320) | 8,105 | 4,288 | |||||||||||||||||||
| Cloud-based software implementation costs (2) | — | — | — | 267 | |||||||||||||||||||
| Amortization of cloud-based software implementation costs (3) | 280 | 292 | 837 | 806 | |||||||||||||||||||
| Other loss (4) | 216 | 2,305 | 425 | 2,448 | |||||||||||||||||||
| Transaction-related fees and expenses (5) | — | 6 | — | 742 | |||||||||||||||||||
| Legal contingency (6) | — | — | 1,700 | — | |||||||||||||||||||
| Strategic realignment costs (7) | 38 | 4,406 | 1,654 | 4,406 | |||||||||||||||||||
| Consulting fees (8) | 597 | — | 1,263 | — | |||||||||||||||||||
| Restructuring costs (9) | 1,381 | — | 1,381 | — | |||||||||||||||||||
| Tax Receivable Agreement liability adjustment (10) | (209) | 353 | (1,381) | (2,132) | |||||||||||||||||||
| Adjusted EBITDA | $ | 26,457 | $ | 21,387 | $ | 74,728 | $ | 72,662 | |||||||||||||||
| Adjusted EBITDA Margin (11) | 13.6 | % | 11.8 | % | 13.0 | % | 13.3 | % | |||||||||||||||
(1) Represents the difference between cash rent payments and the recognition of straight-line rent expense recognized over the lease term.
(2) Represents non-capitalized third party consulting and software licensing costs incurred in connection with the implementation of a new Human Capital Management (" HCM") system which are included within general and administrative expenses.
(3) Represents amortization of capitalized cloud-based Enterprise Resource Planning and HCM system implementation costs that are included within general and administrative expenses.
(4) Represents loss on disposal of property and equipment included within other (income) loss, net. The prior-year periods also include a legacy Barnelli's trade name impairment charge, included within other (income) loss, net.
(5) Represents certain expenses that management believes are not indicative of ongoing operations, consisting primarily of certain professional fees included within general and administrative expenses.
(6) Represents a legal contingency related to the Maverick arbitration, recorded within other (income) loss, net.
(7) Represents costs related to the Company's strategic reset of its development and growth plans and CEO transition and replacement costs. These costs are included within general and administrative expenses.
(8) Represents fees incurred for discrete, project-based strategic initiatives that are not part of the Company's ongoing operations and are included within general and administrative expense. These costs consist primarily of third-party consulting fees related to a brand study and a spend optimization study. Given the magnitude and scope of these initiatives and that they are not expected to recur in the foreseeable future, the Company considers the associated consulting fees not reflective of the ongoing costs to operate its business.
(9) Represents restructuring charges associated with the Company's reduction in force, including severance, paid time off payouts, bonus and other costs, which are included within general and administrative expenses.
(10) Represents remeasurement of the Tax Receivable Agreement liability.
(11) Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Revenues, net.
12
See below for a reconciliation of operating income, the most directly comparable GAAP measure, to Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin (in thousands):
| Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Operating income | $ | 11,779 | $ | 5,434 | $ | 30,047 | $ | 33,346 | |||||||||||||||
| Operating income margin | 6.1 | % | 3.0 | % | 5.2 | % | 6.1 | % | |||||||||||||||
| Plus: | |||||||||||||||||||||||
| General and administrative expenses | 19,754 | 20,025 | 59,676 | 57,726 | |||||||||||||||||||
| Pre-opening expenses | 614 | 3,260 | 4,102 | 5,465 | |||||||||||||||||||
| Depreciation and amortization | 8,338 | 7,312 | 24,528 | 21,489 | |||||||||||||||||||
| Net income attributable to equity method investment | (393) | (452) | (1,003) | (998) | |||||||||||||||||||
| Other (income) loss, net | (5) | 1,112 | 828 | 800 | |||||||||||||||||||
| Restaurant-Level Adjusted EBITDA | $ | 40,087 | $ | 36,691 | $ | 118,178 | $ | 117,828 | |||||||||||||||
| Restaurant-Level Adjusted EBITDA Margin (1) | 20.7 | % | 20.2 | % | 20.5 | % | 21.6 | % | |||||||||||||||
(1) Restaurant-Level Adjusted EBITDA Margin is defined as Restaurant-Level Adjusted EBITDA divided by Revenues, net.
13