Portillo’s kicked off fiscal 2025 with a mixed bag of results.
Total revenue for the first quarter reached $176.4 million, a 6.4 percent increase year-over-year. Same-store sales were up 1.8 percent, driven largely by a 4.9 percent increase in average check. That growth was partially offset by a 3.1 percent decline in transactions.
Company leaders attributed the higher average check to a 4.4 percent hike in select menu prices and a 0.5 percent increase in product mix. The chain raised menu prices by 1.5 percent in January and approximately 1 percent in April. The effective price increase for Q2 is expected to be around 3.5 percent, with 1 percent scheduled to roll off by mid-June.
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Store-level margin was 20.8 percent, down 110 basis points compared to the same period last year.
CEO Michael Osanloo pointed to a number of familiar challenges that impacted the quick-service category in Q1—namely declining consumer confidence, poor weather in February across much of the country, and ongoing fluctuations in tariffs. Those pressures have been particularly noticeable at Portillo’s newest restaurants.
“In markets where we have strong brand awareness, we’re more insulated against these types of macro pressures, but newer markets remain a little more vulnerable until they find their footing,” he said.
Portillo’s has spent decades building a loyal following in the Midwest, especially in its hometown of Chicago. In recent years, it’s been working to replicate that same brand affinity in other parts of the country, with a concentrated effort in Texas—most notably the Dallas area. Last year saw the chain expand its presence in areas like Houston, Phoenix and Orlando, too.
Those newer units are off to a slower-than-expected start. Osanloo pointed to a nearly perfect correlation between brand awareness and restaurant performance, though he emphasized that guest satisfaction in new markets is tracking closely with top-performing locations.
“It really does signal that we’re just relatively unknown,” Osanloo said. “So, how do you fix that? Well, we are doubling down on all of our field marketing activities.”
The company is leaning into the use of its mobile Beef Bus to stir excitement in new Texas markets. Osanloo characterized the effort as a long-term play.
“Everything that we see suggests that these businesses are going to be fine,” he said. “They just came out of the gate a little bit slower than maybe we hoped.”
Portillo’s did not open any new units in Q1, but plans to open 12 restaurants throughout the remainder of the year, primarily outside of the Chicagoland area. The growth strategy continues to focus on the Sunbelt, with planned openings in San Antonio and Atlanta in the back half of the year. All but two of the upcoming stores will feature Portillo’s new 6,200-square-foot “Restaurant of the Future 1.0” format.
The company will also open another Portillo’s Pickup location in Plainfield, Illinois—its fourth store with no dining room. Additionally, it plans to debut a first-of-its-kind walk-up restaurant in Central Florida. The unit will be a smaller-format build with no drive-thru, designed for high-foot-traffic urban areas.
With the majority of expansion now happening outside of its home market, Portillo’s has made it a priority to invest in advertising beyond Chicagoland. A Q1 campaign in the Dallas-Fort Worth area used a mix of traditional and digital media, incorporating crowdsourced content and a social media-forward strategy. The campaign helped boost brand awareness by nearly 10 percent and delivered high-single-digit sales growth in local restaurants. A similar campaign is now underway in Phoenix.
Another key initiative for the brand is its recently launched loyalty program, Portillo’s Perks. Rolled out at the end of Q1, the program is designed to be more personalized and data-driven, with offers tailored to guest behavior.
The launch phase focused on signups, using a free fry offer to incentivize enrollment. In Chicago and Dallas, the brand also tested its first “surprise and delight” offers, giving guests either a free Italian beef sandwich or a burger.
Early redemptions were strong, and the company plans to expand the program’s reach with broader offers.
“In new markets, these offers are designed to drive trial and awareness,” Onsaloo said. “In existing markets, we’re testing which offer types can drive incremental visits. As we build a data set around our most loyal fans, we will shift to more targeted offers in the back half of the year.”
The goal is to reach 1.6 million signups by mid-summer. Executives didn’t share specific progress toward that benchmark but expressed confidence in hitting the target.
“We feel great about the performance of this,” Osanloo said. “It’s like a new toy, almost. We get to test how people respond to different offers, how people respond to badging, how signups are working. We’re testing all that and we’ll continue to test it through Q2, and then I think we have an opportunity to do some really interesting, innovative, one-to-one marketing in the back half of this year. Really, it’s probably the most exciting thing that we’re doing as an organization.”
Osanloo added that the social media-style marketing strategy has played a role in lifting the loyalty program’s visibility and performance.
“We’ve gotten very contemporary in the way we market and talk about ourselves,” Osanloo said. “We’re linking it to our Portillo’s Perks program and trying to make sure that we’ve got people really working in a beautiful virtuous cycle. They hear about us, they try us, they have a great experience, they have multiple ways of seeing us and signing up for loyalty—and it all creates that frequency that we want.”
One area the company hasn’t heavily promoted yet is its breakfast test. In early Q2, Portillo’s began testing breakfast service at five Chicagoland restaurants. Though the trial is still in its early stages, initial feedback has been encouraging. The test menu includes items like scrambled eggs, breakfast sandwiches, and a chocolate cake donut.
“We’ve got a big asset sitting there empty for four hours in the morning,” Osanloo said. “Obviously, the incrementality of breakfast can be fantastic if it works.”
He noted that there has always been demand for morning offerings, especially driven by the popularity of the pepper and egg sandwich offered during Lent. Over the years, guests have consistently asked for it to be available in the morning, which prompted the current test.
“We want to make sure that the food works and that the operational execution is flawless,” Osanloo said. “We also want to make sure that we’re not negatively affecting lunch and the prep for lunch. We’re going to keep testing, see how it works, and then we’ll make a decision on whether to expand or not by the end of the summer.”
Portillo’s also is focused on improving operations, particularly around speed, accuracy, and hospitality. It has implemented new technology tools, including an AI-powered drive-thru camera system, to support those efforts. Kiosks, which began rolling out last August, are also seeing strong results—boosting average checks by at least 15 percent and increasing add-on purchases.
“We’ve studied the top quartile of our restaurants with the highest kiosk performance and applied those insights across the other restaurants in our portfolio,” Osanloo said. “This data-driven approach ensures that we continue to enhance the guest experience while maximizing the impact of our kiosks.”
