Portillo’s has never been one to follow the worn path in quick service. It hasn’t engaged in the “value wars” or materially cut back its staffing or menu amid the chaos of inflation. You can now add loyalty to that outlier playbook.
Presenting at this year’s ICR Conference in Orlando, the fast casual unveiled several initiatives William Blair analyst Sharon Zackfia labeled “positive wildcards” for this coming year and beyond as the fast casual continues to chart growth. One being the “one-two punch of a new app-less loyalty program combined with the recent deployment of ordering kiosks.”
On that opening note, Portillo’s plans to house its upcoming effort in smartphone digital wallets (expected rollout by end of Q1). Management said Portillo’s sees a path to 1.5 million to 1.7 million members by midsummer with the potential to drive “meaningful” frequency lifts through text-based offers, including one-to-one marketing to communicate value.
Essentially, the model will differ from the more-typical approach of asking customers to download another app to sign-up. Having a digital card removes that step and also centers the approach on payment and rewards versus the ability to order.
Chief Information and Digital Transformation Officer Keith Correia, a Steak ‘n Shake and Dairy Queen vet who was named to the role in May, said customers are familiar with the model in their daily lives and it’s not a leap to adopt (people do so with boarding passes and concert tickets, etc.) “They know where that is, they know how to access it,” he said. “For a lot of other apps that customers use for loyalty, you have to go to the app store, you have to download the app, you have to find the app when you go into a specific venue that you like, and there’s some friction with that, and it’s cumbersome.”

“This is different,” Correia continued. “It’s right there in their wallet. They know how to get to it. They can get to it quickly. And the benefit for us is we can message them there and we can make it really easy for them to transact with us and use that loyalty benefit.”
That digital card will always be active and, as mentioned, Portillo’s will have the ability to bump offers that appear in the wallet. “You can easily pull up the perks card and you can scan that card when you go to one of our locations,” he said.

Customers are recognized for their visit and Portillo’s drops in badges. The goal being guests will come more often, see their transaction number rise, and eventually start earning unique badges that recognize their behavior. “And that’s where we come in with the communication process that is personalized for them,” Correia said. “So as they visit us, as they get badges, we communicate with them, we give them special offers. We may invite them to try an LTO or a new product, and we can surprise and delight them.”
Dressed down, it’s a transaction-based blueprint. The more a customer shows up, the more specialized communications become and the ability to gamify experience emerges. Portillo’s learns about consumer visit patterns and moves toward hyper personalization.
“We will use data over time to drive the timing and the relevance of these offers so they become more and more material to our guests and incentivize them to visit and that’s where we get the incremental transactions and the value of the program for us. And so, we’re really excited about this program,” he said.
CEO Michael Osanloo said, while the 1.5–1.7 million member part might not sound like a “huge number” compared to some other programs, Portillo’s doesn’t have 100 units yet (94 to be exact). “The number of loyalty guests per restaurants—that’s an extraordinary number,” he said.
“We have tremendous consumer support,” Osanloo added earlier. “We can do a better job of translating this consumer support into traffic transactions, mix and economic returns for our investors, and that’s part of our plan.”
The wallet program was also designed to talk to Portillo’s new kiosks, which rolled systemwide at the start of November. Those are bolstering average ticket by more than 15 percent versus non-kiosk transactions on better attachment rates for add-on items such as cheese sauce, fries, peppers, and beverages. The culprit being a common kiosk lure—the machine upsells 100 percent of the time, with visuals and time for diners to deliberate. Customer satisfaction has proven similar to human order takers, the brand said.
Twenty-five percent of Portillo’s customers inside the four walls are using kiosks, leading to a greater than 1 percent increase in total same-store sales thanks to the higher average ticket, while also alleviating consumer balk. “The throughput and ticket benefit could further increase in 2025,” Zackfia wrote in a note, “as Portillo’s makes better use of next-gen features such as facial recognition cameras that can identify customers, provide suggestive selling, and reorder functionality, and offer payment via saved credit cards to reduce transaction times to as little as 10 seconds.”
Additionally, Portillo’s expanded at ICR on what’s been another ongoing theme in recent earnings calls. The brand wants to improve drive-thru speed of service and get back to pre-COVID levels of about 5 minutes. Today, Portillo’s is running roughly 45 seconds above.
There’s clear sight why. In the 12 months leading up to June 2021, before the brand went public, drive-thru sales alone were $4.9 million per unit—more than McDonald’s entire AUV. It’s about $3.5 million now, or twice what McDonald’s earned on average through the channel in 2023, according to public reports.
Holistically, it’s also a sales avenue where value-minded customers, who prioritize speed, show up.
Portillo’s said it’s using existing cameras to test a new system at three locations that provides managers with visual queuing information to identify cars that have been in line too long. That enables labor redeployment in real time. Portillo’s said early results are promising and it plans to widen the pilot.
Through best practices and improved design thus far, Portillo’s shaved 15 seconds off its recent peak. So there’s still 30 more seconds to cut.
Overall, Portillo’s beat William Blair expectations with preliminary Q4 same-store sales of 0.3 percent (better than the expectation of a low-single-digit decline). Ticket was up 4 percent (4.7 percent price, negative 0.7 percent mix). Traffic slid in line with Q3 at negative 3.7 percent despite a difficult year-over-year lap of 1.3 percent growth in Q3 2023. Unit-level margins of 24.5 percent also topped William Blair’s projected 22–23 percent and adjusted EBITDA of $25.4 million easily sailed calls of $18.3 million.
The brand boasted average-unit volumes of $8.9 million headed through Q3. Portillo’s guided flat to positive 2 percent same-store sales for 2025.
The chain, sitting at 94 units, should pass the 100-milestone mark in 2025 as it guided 12 openings. Growth will lift revenue 11–12 percent.
Portillo’s met its 2024 goals of 10 openings (executives first put 600 on the whiteboard as a long-term, 25-year target). Two of those were a small-format, lower-cost “Restaurant of the Future” box. All of 2025’s openings are slated for that model. Portillo’s also said it’s begun work on a 2.0 version that features an E-shaped kitchen instead of the current linear format, and a 5,500-square-foot dining area (the 1.0 approach is 6,200). Zackfia said doing so will bring build costs down further in 2025 to $4.6 million to $5.2 million compared to the present $5.2 million to $5.5 million tag.

Legacy stores are 9,000–11,100 square feet, with kitchen line length of 85–105 feet, and cost an average of $7 million to $8 million.
In 2023, openings, like one in Allen, Texas, were closer to $6.7 million on 7,700 square feet and kitchen line length of 65 feet. Last year, the numbers decreased to $6.6 million, 6,250, and 47.
Portillo’s class of 2024 included Denton, Mansfield, Richmond, Grapevine, Katy, and Willowbrook, Texas; Surprise, Arizona; Livonia, Michigan; Waterford Lakes, Florida; and Orland Park, Illinois (a drive-thru only unit).
In 2025, expect figures to fall more into the aforementioned $5.2 million to $5.5 million, 6,250 square feet, and kitchen lines of 47 feet.
Portillo’s added it will start exploring alternate real estate financing structures as well. “I think we’re looking at doing some smart things with landlord financing and other forms of financing so that Portillo’s is not necessarily putting all of the capital into the building, but it’s more of a shared mindset with our landlords,” Osanloo said in Q3. As Portillo’s expands, this path will include seeking increased tenant allowances on leases and exploring build-to-suite and reverse build-to-suite opportunities.

Timeline
- 1963: Founded as a hot dog cart
- 2014: When Berkshire Partners acquired the brand there were 38 units.
- 2021 (year Portillo’s went public): 69
- 2022: 72
- 2023: 84
- Today: 94
- End of 2025 (estimated): 106
- The company said there’s 920 as a minimum achievable market.
“We continue to view Portillo’s expansion prospects as strong with increasingly proven geographic portability, and peg Portillo’s ultimate annual revenue opportunity at more than $5.5 billion on at least 800 full-scale locations, translating to annual EBITDA of nearly $900 million,” Zackfia wrote.
Runway ahead includes growing its unit base 10-fold (more than Portillo’s own projections) while generating multifold increases in profits.
Like the company shared in Q3, Portillo’s plans to boost advertising beyond Chicago to support development. This coming year promises an advertising push in Dallas Fort Worth, with campaigns expected to educate and reintroduce guests to the brand. Previous examples in new-market entries rocketed traffic, the company said, and Portillo’s is confident DFW will respond similarly. At that juncture, Portillo’s will likely have eight locations in DFW.
In Chicagoland today, the fast casual appreciates 77 percent brand awareness. The approach there will be to drive trip frequency of a loyal guest base; entice lapsed guests to return; and remind users about specific menu items.
Outside the market, though, Portillo’s awareness sits at 30 percent, which means igniting advertising designed to drive trial and awareness of restaurants to new guests; continuous marketing support behind restaurant-level efforts; and messaging, as shared, in markets with minimum efficient scale (six to eight units).
Portillo’s could adjust some other traits as well. In Houston, where the brand opened its first store in October, it’s tested a streamlined menu that drives speed and accuracy, simplifies training and processes, and assists in reducing restaurant size and costs. It’s a hypothesis that would, in theory, enable small-format, high-volume walk-up locations for airport and urban centers, too.
Portillo’s removed 32 SKUs and 14 percent of mix by taking out char items (Polish, Italian sausage, combo); beef and cheddar croissant, beef bowls; jumbo dogs; fish sandwich; Greek salad and chicken pecan salad; chicken noodle soup, éclair cake and strawberry shortcake, and alcohol.
Although still a run, if it proves capable of improving throughput and reducing CapEx, Portillo’s feels the new menu should unlock growth alongside other initiatives.
Some broader themes
Portillo’s, perhaps known best for its hot dogs and Italian beefs (chocolate cake can’t be ignored, either), has long been a daypart agnostic fast casual that leads with variety.
During its presentation, management shared a breakdown of mix:
- Italian beef: 21 percent
- Fries/onion rings: 17 percent
- Hot dogs and sausages: 14 percent
- Burgers: 12 percent
- Drinks, shakes, and beer: 11 percent
- Salads: 8 percent
- Chicken, ribs, and pasta: 8 percent
- Sides: 5 percent
- Desserts: 4 percent
For perspective, Portillo’s sells $650,000-plus per restaurant in salad.
Dine-in, even amid all the off-premises growth, still totals $4.2 million per unit for the brand, which is more than Chipotle.
Delivery in 2023, at 14 percent of full-year sales, amounted to $1.2 million per restaurant, or north of Domino’s average delivery volume.
Portillo’s had roughly 1.3 million online accounts for carryout, sold more than 600,000 pounds of beef in catering, and tacked on $7.5 million in direct shipping sales.


Going deeper on the “value conversation,” Osanloo said last quarter Portillo’s wouldn’t be “going on sale” to counter a promotional frenzy taking shape in quick service to battle years of price hikes. Portillo’s stayed relatively cautious on price throughout the past couple of years and held on quality and brand DNA. The chain took zero action in Q3 and said it didn’t plan to for the remainder of fiscal 2024. Its price benefit was about 4 percent in Q4 and further upticks might happen if needed, the company said.
But broadly, Osanloo said, Portillo’s elected to absorb traffic blows rather than overact. “Portillo’s does not play the discount game,” he said in Q3. “We compete on great everyday pricing for our craveable food and abundant portions, and we know this approach will benefit us in the medium and long term.”