COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 25, 2023 | Jul. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 25, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40951 | |
Entity Registrant Name | PORTILLO'S INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-1104304 | |
Entity Address, Address Line One | 2001 Spring Road | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Oak Brook | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60523 | |
City Area Code | 630 | |
Local Phone Number | 954-3773 | |
Title of 12(b) Security | Class A common stock, $0.01 par value per share | |
Trading Symbol | PTLO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 55,101,465 | |
Entity Central Index Key | 0001871509 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents and restricted cash | $ 22,457 | $ 44,427 |
Accounts receivable | 11,496 | 8,590 |
Inventory | 6,493 | 7,387 |
Prepaid expenses | 5,139 | 4,922 |
Total current assets | 45,585 | 65,326 |
Property and equipment, net | 250,443 | 227,036 |
Operating lease assets | 179,449 | 166,808 |
Goodwill | 394,298 | 394,298 |
Trade names | 223,925 | 223,925 |
Other intangible assets, net | 30,356 | 31,800 |
Equity method investment | 16,373 | 16,274 |
Deferred tax assets | 186,997 | 150,497 |
Other assets | 4,061 | 4,119 |
Total other assets | 856,010 | 820,913 |
TOTAL ASSETS | 1,331,487 | 1,280,083 |
CURRENT LIABILITIES: | ||
Accounts payable | 24,147 | 30,273 |
Current portion of long-term debt | 7,500 | 4,155 |
Current portion of Tax Receivable Agreement liability | 6,309 | 813 |
Short-term debt | 10,000 | 0 |
Current deferred revenue | 4,696 | 7,292 |
Short-term operating lease liability | 5,053 | 4,849 |
Accrued expenses | 31,322 | 29,915 |
Total current liabilities | 89,027 | 77,297 |
LONG-TERM LIABILITIES: | ||
Long-term debt, net of current portion | 289,168 | 314,425 |
Tax Receivable Agreement liability | 295,696 | 252,003 |
Long-term operating lease liability | 217,989 | 200,166 |
Other long-term liabilities | 3,151 | 3,291 |
Total long-term liabilities | 806,004 | 769,885 |
Total liabilities | 895,031 | 847,182 |
COMMITMENTS AND CONTINGENCIES (NOTE 14) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Additional paid-in-capital | 301,622 | 260,664 |
Retained earnings (accumulated deficit) | 1,462 | (4,812) |
Total stockholders' equity attributable to Portillo's Inc. | 303,635 | 256,336 |
Non-controlling interest | 132,821 | 176,565 |
Total stockholders' equity | 436,456 | 432,901 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,331,487 | 1,280,083 |
Class A Common Stock | ||
STOCKHOLDERS' EQUITY: | ||
Common stock | 551 | 484 |
Class B Common Stock | ||
STOCKHOLDERS' EQUITY: | ||
Common stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 25, 2023 | Dec. 25, 2022 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 380,000,000 | 380,000,000 |
Common stock issued (in shares) | 55,073,993 | 48,420,723 |
Common stock outstanding (in shares) | 55,073,993 | 48,420,723 |
Class B Common Stock | ||
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock issued (in shares) | 17,472,926 | 23,837,162 |
Common stock outstanding (in shares) | 17,472,926 | 23,837,162 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Income Statement [Abstract] | ||||
REVENUES, NET | $ 169,182 | $ 150,623 | $ 325,242 | $ 285,105 |
Restaurant operating expenses: | ||||
Food, beverage and packaging costs | 56,229 | 51,774 | 109,856 | 98,040 |
Labor | 43,153 | 37,906 | 83,612 | 75,219 |
Occupancy | 8,237 | 7,379 | 16,688 | 15,134 |
Other operating expenses | 18,832 | 15,178 | 37,536 | 30,343 |
Total restaurant operating expenses | 126,451 | 112,237 | 247,692 | 218,736 |
General and administrative expenses | 19,609 | 15,439 | 38,387 | 31,126 |
Pre-opening expenses | 275 | 423 | 2,619 | 979 |
Depreciation and amortization | 5,941 | 5,309 | 11,610 | 10,514 |
Net income attributable to equity method investment | (381) | (275) | (588) | (398) |
Other (income) loss, net | (97) | 51 | (354) | (105) |
OPERATING INCOME | 17,384 | 17,439 | 25,876 | 24,253 |
Interest expense | 6,523 | 6,097 | 13,966 | 12,196 |
Tax Receivable Agreement liability adjustment | (579) | (1,754) | (1,163) | (1,754) |
Loss on debt extinguishment | 0 | 0 | 3,465 | 0 |
INCOME BEFORE INCOME TAXES | 11,440 | 13,096 | 9,608 | 13,811 |
Income tax expense | 1,542 | 2,340 | 983 | 2,505 |
NET INCOME | 9,898 | 10,756 | 8,625 | 11,306 |
Net income attributable to non-controlling interests | 3,110 | 5,645 | 2,351 | 6,001 |
NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. | $ 6,788 | $ 5,111 | $ 6,274 | $ 5,305 |
Net income per common share attributable to Portillo's Inc.: | ||||
Basic (in usd per share) | $ 0.12 | $ 0.14 | $ 0.12 | $ 0.15 |
Diluted (in usd per share) | $ 0.12 | $ 0.13 | $ 0.11 | $ 0.13 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 54,964,649 | 35,991,079 | 52,252,053 | 35,899,125 |
Diluted (in shares) | 58,550,057 | 39,687,090 | 55,806,455 | 39,839,292 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 26, 2021 | 35,807,171 | 35,673,321 | ||||||
Beginning balance at Dec. 26, 2021 | $ 423,406 | $ 358 | $ 0 | $ 186,856 | $ (15,950) | $ 252,142 | ||
Total Stockholders' Equity | ||||||||
Net income | 11,306 | 5,305 | 6,001 | |||||
Equity-based compensation | 7,649 | 3,837 | 3,812 | |||||
Activity under equity-based compensation plans (in shares) | 411,184 | |||||||
Activity under equity-based compensation plans | 1,451 | $ 4 | 1,447 | |||||
Non-controlling interest adjustment | 0 | 722 | (722) | |||||
Ending balance (in shares) at Jun. 26, 2022 | 36,218,355 | 35,673,321 | ||||||
Ending balance at Jun. 26, 2022 | 443,812 | $ 362 | $ 0 | 192,862 | (10,645) | 261,233 | ||
Beginning balance (in shares) at Mar. 27, 2022 | 35,807,171 | 35,673,321 | ||||||
Beginning balance at Mar. 27, 2022 | 427,741 | $ 358 | $ 0 | 188,752 | (15,756) | 254,387 | ||
Total Stockholders' Equity | ||||||||
Net income | 10,756 | 5,111 | 5,645 | |||||
Equity-based compensation | 3,864 | 1,941 | 1,923 | |||||
Activity under equity-based compensation plans (in shares) | 411,184 | |||||||
Activity under equity-based compensation plans | 1,451 | $ 4 | 1,447 | |||||
Non-controlling interest adjustment | 0 | 722 | (722) | |||||
Ending balance (in shares) at Jun. 26, 2022 | 36,218,355 | 35,673,321 | ||||||
Ending balance at Jun. 26, 2022 | 443,812 | $ 362 | $ 0 | 192,862 | (10,645) | 261,233 | ||
Beginning balance (in shares) at Dec. 25, 2022 | 48,420,723 | 23,837,162 | 48,420,723 | 23,837,162 | ||||
Beginning balance at Dec. 25, 2022 | 432,901 | $ 484 | $ 0 | 260,664 | (4,812) | 176,565 | ||
Total Stockholders' Equity | ||||||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,350,717 | |||||||
Ending balance (in shares) at Mar. 26, 2023 | 54,467,951 | 17,943,562 | ||||||
Ending balance at Mar. 26, 2023 | 422,986 | $ 545 | 294,984 | (5,326) | 132,783 | |||
Beginning balance (in shares) at Dec. 25, 2022 | 48,420,723 | 23,837,162 | 48,420,723 | 23,837,162 | ||||
Beginning balance at Dec. 25, 2022 | 432,901 | $ 484 | $ 0 | 260,664 | (4,812) | 176,565 | ||
Total Stockholders' Equity | ||||||||
Net income | 8,625 | 6,274 | 2,351 | |||||
Equity-based compensation | 7,720 | 5,571 | 2,149 | |||||
Activity under equity-based compensation plans (in shares) | 289,034 | |||||||
Activity under equity-based compensation plans | 1,291 | $ 3 | 1,288 | |||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,364,236 | (6,364,236) | ||||||
Redemption of LLC Interests | 0 | $ 64 | (64) | |||||
Non-controlling interest adjustment | 0 | 47,845 | (47,845) | |||||
Distributions paid to non-controlling interest holders | (399) | (399) | ||||||
Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis | (13,682) | (13,682) | ||||||
Ending balance (in shares) at Jun. 25, 2023 | 55,073,993 | 17,472,926 | 55,073,993 | 17,472,926 | ||||
Ending balance at Jun. 25, 2023 | 436,456 | $ 551 | $ 0 | 301,622 | 1,462 | 132,821 | ||
Beginning balance (in shares) at Mar. 26, 2023 | 54,467,951 | 17,943,562 | ||||||
Beginning balance at Mar. 26, 2023 | 422,986 | $ 545 | 294,984 | (5,326) | 132,783 | |||
Total Stockholders' Equity | ||||||||
Net income | 9,898 | 6,788 | 3,110 | |||||
Equity-based compensation | 4,183 | 3,146 | 1,037 | |||||
Activity under equity-based compensation plans (in shares) | 135,406 | |||||||
Activity under equity-based compensation plans | 578 | $ 1 | 577 | |||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 470,636 | (470,636) | ||||||
Redemption of LLC Interests | 0 | $ 5 | (5) | |||||
Non-controlling interest adjustment | 0 | 4,109 | (4,109) | |||||
Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis | (1,189) | (1,189) | ||||||
Ending balance (in shares) at Jun. 25, 2023 | 55,073,993 | 17,472,926 | 55,073,993 | 17,472,926 | ||||
Ending balance at Jun. 25, 2023 | $ 436,456 | $ 551 | $ 0 | $ 301,622 | $ 1,462 | $ 132,821 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 25, 2023 | Jun. 26, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 8,625 | $ 11,306 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 11,610 | 10,514 |
Amortization of debt issuance costs and discount | 620 | 1,243 |
Loss on sales of assets | 496 | 107 |
Equity-based compensation | 7,720 | 7,649 |
Deferred rent and tenant allowance | 0 | 2,112 |
Deferred income tax expense | 983 | 2,505 |
Tax Receivable Agreement liability adjustment | (1,163) | (1,754) |
Amortization of deferred lease incentives | 0 | (166) |
Gift card breakage | (528) | (474) |
Loss on debt extinguishment | 3,465 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (906) | (1,089) |
Receivables from related parties | (141) | (66) |
Inventory | 894 | 439 |
Other current assets | (218) | 754 |
Operating lease assets | 3,880 | 0 |
Accounts payable | (2,779) | (2,908) |
Accrued expenses and other liabilities | (559) | (6,140) |
Operating lease liabilities | (1,359) | 0 |
Deferred lease incentives | 850 | 1,251 |
Other assets and liabilities | (181) | 76 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 31,309 | 25,359 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (37,359) | (13,940) |
Proceeds from the sale of property and equipment | 33 | 30 |
NET CASH USED IN INVESTING ACTIVITIES | (37,326) | (13,910) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term debt, net | 10,000 | 0 |
Proceeds from long-term debt | 300,000 | 0 |
Payments of long-term debt | (322,428) | (1,662) |
Proceeds from equity offering, net of underwriting discounts | 179,306 | 0 |
Repurchase of outstanding equity / Portillo's OpCo units | (179,306) | 0 |
Distributions paid to non-controlling interest holders | (399) | 0 |
Proceeds from stock option exercises | 1,015 | 1,451 |
Employee withholding taxes related to net settled equity awards | (56) | 0 |
Proceeds from Employee Stock Purchase Plan purchases | 297 | 0 |
Payments of Tax Receivable Agreement liability | (813) | 0 |
Payment of deferred financing costs | (3,569) | 0 |
Payment of initial public offering issuance costs | 0 | (771) |
NET CASH USED IN FINANCING ACTIVITIES | (15,953) | (982) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (21,970) | 10,467 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 44,427 | 39,263 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | 22,457 | 49,730 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | 13,447 | 10,815 |
Income tax paid | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrued capital expenditures | 6,537 | 333 |
Establishment of liabilities under Tax Receivable Agreement | $ 51,165 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 25, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Portillo’s Inc. (the "Company") was formed and incorporated as a Delaware corporation on June 8, 2021. The Company was formed for the purpose of completing an initial public offering ("IPO") and related reorganization transactions (collectively, the "Transactions”) in order to carry on the business of PHD Group Holdings LLC and its subsidiaries ("Portillo's OpCo"). Following the consummation of the Transactions on October 20, 2021, the Company became the sole managing member of Portillo’s OpCo, and a s sole managing member, the Company operates and controls all of the business and affairs of Portillo's OpCo. As a result, the Company consolidates the financial results of Portillo's OpCo and reports a non-controlling interest representing the economic interest in Portillo's OpCo held by the other members of Portillo's OpCo (the "pre-IPO LLC Members"). Unless the context otherwise requires, references to "we," "us," "our," "Portillo's," and the "Company" refer to Portillo's Inc. and its subsidiaries, including Portillo's OpCo. The Company operates fast-casual restaurants in 10 states, along with two food production commissaries in Illinois. As of June 25, 2023 and December 25, 2022, the Company had 75 and 71 restaurants in operation, respectively. The Company also had two non-traditional locations in operation as of June 25, 2023 and December 25, 2022. These non-traditional locations include a food truck and a ghost kitchen (small kitchen with no store-front presence, used to fill online orders). Portillo's additionally has a 50% interest in a single restaurant owned by C&O, which is excluded from the Company's restaurant count. The Company’s principal corporate offices are located in Oak Brook, Illinois. Secondary Offerings In the first quarter of 2023, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $21.05 per share. On April 5, 2023, the Underwriter exercised its overallotment option in part, to purchase an additional 620,493 shares of the Company's Class A common stock at an offering price of $21.05 per share (collectively the "Q1 Secondary Offering and Overallotment Option"). We used all of the net proceeds from the Q1 Secondary Offering and Overallotment Option to purchase LLC Units and corresponding shares of Class B common stock from certain pre-IPO LLC Members and to repurchase shares of Class A common stock from the shareholders of the entities treated as corporations for U.S. tax purposes that held LLC Units prior to the Transactions ("Blocker Companies") at a price per LLC Unit or share of Class A common stock, as applicable, equal to the public offering price per share of Class A common stock, less the underwriting discounts and commissions. The proceeds from the Q1 Secondary Offering and Overallotment Option were used to (i) purchase 2,269,776 existing shares of Class A common stock from the shareholders of the Blocker Companies and (ii) redeem 6,350,717 LLC Units held by the pre-IPO LLC Members. In connection with the redemption, 6,350,717 shares of Class B common stock were surrendered by the pre-IPO LLC Members and canceled and the Company received 6,350,717 newly-issued LLC Units, increasing the Company's total ownership interest in Portillo's OpCo. As a result, Portillo’s did not receive any proceeds from the offering, and the total number of shares of Class A common stock and Class B common stock did not change; however, the number of outstanding shares of Class A common stock increased by the same number of the canceled shares of Class B common stock. In the third and fourth quarters of 2022, the Company completed two secondary offerings of 8,066,458 shares (including 66,458 shares sold to the underwriters pursuant to their overallotment option) and 8,000,000 shares, respectively, of the Company's Class A common stock at an offering price of $23.75 and $22.69, respectively, per share. As of June 25, 2023, the Company owns 75.9% of Portillo's OpCo and the pre-IPO LLC Members own the remaining 24.1% of Portillo's OpCo. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 25, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated f inancial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022. All intercompany balances and transactions have been eliminated in consolidation. The Company does not have any components of other comprehensive income (loss) recorded within its condensed consolidated financial statements, and therefore, does not separately present a statement of comprehensive income (loss). Segment Reporting The Company owns and operates fast-casual restaurants in the United States, along with two food production commissaries in Illinois. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer ("CEO"). The CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. The Company has one operating segment and one reportable segment. Fiscal Year The Company uses a 52- or 53-week fiscal year ending on the Sunday prior to or on December 31. In a 52-week fiscal year, each quarterly period is comprised of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter. Fiscal 2023 and 2022 consist of 53 and 52 weeks, respectively. The fiscal periods presented in this report are the quarters and two quarters ended June 25, 2023 and June 26, 2022, respectively. Use of Estimates The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the period. Actual results could differ from those estimates. Recently Adopted Accounting Standards In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. FASB has extended the sunset date to December 31, 2024. The Company does not believe the impact of the transition from LIBOR to alternative reference rates is material to its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASC 842"), along with related clarifications and improvements. The pronouncement requires lessees to recognize a liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. The update is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this standard effective December 27, 2021, electing the modified retrospective approach to apply the standard as of the transition date. We have elected the transition package of three practical expedients permitted under the new standard, which eliminates the requirement to reassess the conclusions about historical lease identifications, lease classifications, and initial direct costs. We did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease terms and impairments of right-of-use assets. We elected to apply the practical expedient of combining lease and non-lease components. Additionally, we elected to utilize the short-term lease exception policy, which allows us to not apply the recognition requirements of this standard to leases with a term of 12 months or less. The adoption of this standard had a significant impact on the Company’s condensed consolidated balance sheet as we recognized the right-of-use asset and lease liabilities for our operating leases. The adoption had an immaterial impact on the condensed consolidated statement of operations, cash flows and overall liquidity. See Note 9. Leases for additional information. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 25, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenues from retail restaurants are presented net of discounts and recognized when food and beverage products are sold to the end customer. Sales taxes collected from customers are excluded from revenues and the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. Delivery sales are generally fulfilled by third-party delivery partners whether ordered through the Portillo's app and website ("Dispatch Sales") or through third-party delivery partners ("Marketplace Sales"). Dispatch Sales include delivery and service fees as the Company controls the delivery. Revenue from Dispatch Sales is recognized when food is delivered to the customer. For these sales, the Company receives payment directly from the customer at the time of sale. Revenue for Marketplace Sales is recognized in the amount paid to the delivery partner by the customer for food and excludes delivery and service fees charged by the third-party delivery partner as the Company does not control the delivery. Revenue from Marketplace Sales is recognized when food is delivered to the customer. For these sales, the Company receives payment from the delivery partner subsequent to the transfer of order, which is generally paid one week in arrears. For all delivery sales of food, the Company is considered the principal and recognizes revenue on a gross basis. The Company sells gift cards which do not have expiration dates. The Company records the sale of the gift card as a contract liability and recognizes revenue from gift cards when: (i) the gift card is redeemed by the customer; or (ii) in the event a gift card is not expected to be redeemed, in proportion to the pattern of rights exercised by the customer (gift card breakage). The Company has determined that 11% of gift card sales will not be redeemed and will be retained by us based on a portfolio assessment of historical data on gift card redemption patterns. Gift card breakage is recorded within revenues, net in the condensed consolidated statements of operations. The Company recognized gift card breakage of $0.2 million and $0.5 million fo r the quarter and two quarters ended June 25, 2023, respectively, and $0.2 million and $0.5 million for the quarter and two quarters ended June 26, 2022 , respectively. The Company’s revenue related to performance obligations not yet satisfied is revenue from gift cards sold but not yet redeemed. The gift card liability included in current deferred revenue on the condensed consolidated balance sheets is as follows (in thousands): June 25, 2023 December 25, 2022 Gift card liability $ 4,624 $ 6,988 Revenue recognized in the condensed consolidated statement of operations for the redemption of gift cards that were included in their respective liability balances at the beginning of the year is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Revenue recognized from gift card liability balance at the beginning of the year $ 900 $ 830 $ 2,837 $ 2,681 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 25, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following (in thousands): June 25, 2023 December 25, 2022 Raw materials $ 4,711 $ 5,722 Work in progress 123 104 Finished goods 846 876 Consigned inventory 813 685 $ 6,493 $ 7,387 |
PROPERTY & EQUIPMENT, NET
PROPERTY & EQUIPMENT, NET | 6 Months Ended |
Jun. 25, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY & EQUIPMENT, NET | PROPERTY & EQUIPMENT, NET Property and equipment, net consisted of the following (in thousands): June 25, 2023 December 25, 2022 Land improvements $ 16,525 $ 16,369 Furniture, fixtures, and equipment 139,943 126,130 Leasehold improvements 180,639 153,341 Transportation equipment 2,672 2,281 Construction-in-progress 26,081 35,386 365,860 333,507 Less accumulated depreciation (115,417) (106,471) $ 250,443 $ 227,036 Depreciation expense was $5.2 million and $10.2 million for the quarter and two quarters ended June 25, 2023, respectively, and $4.5 million and $8.9 million for the quarter and two quarters ended June 26, 2022, respectively, and is included in depreciation and amortization in the condensed consolidated statements of operations. |
GOODWILL & INTANGIBLE ASSETS
GOODWILL & INTANGIBLE ASSETS | 6 Months Ended |
Jun. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL & INTANGIBLE ASSETS | GOODWILL & INTANGIBLE ASSETS The Company has one reporting unit for goodwill which is evaluated for impairment annually in the fourth quarter of each fiscal year. Intangibles, net consisted of the following (in thousands): June 25, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (25,761) 30,356 $ 280,042 $ (25,761) $ 254,281 December 25, 2022 Gross Carrying Amount Accumulated Amortization ASC 842 Adjustment Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (24,317) — 31,800 Covenants not-to-compete 40,799 (40,799) — — Favorable rental contracts 2,991 (1,849) (1,142) — $ 323,832 $ (66,965) $ (1,142) $ 255,725 Amortization expense was $0.7 million and $1.4 million for the quarter and two quarters ended June 25, 2023, respectively, and $0.8 million and $1.6 million for the quarter and two quarters ended June 26, 2022, respectively, and is included in depreciation and amortization in the condensed consolidated statements of operations. The estimated aggregate amortization expense related to intangible assets held at June 25, 2023 for the remainder of this year and the succeeding five years and thereafter is as follows (in thousands): Estimated Amortization 2023 (excluding the two quarters ended June 25, 2023) $ 1,445 2024 2,813 2025 2,707 2026 2,707 2027 2,707 2028 2,707 2029 and thereafter 15,270 $ 30,356 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 25, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The carrying value of the Company's cash and cash equivalents, restricted cash, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to the short-term nature of these financial instruments. Other assets consist of a deferred compensation plan with related assets held in a rabbi trust. Deferred Compensation Plan - The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities carried at fair value. The fair value measurement of these trading securities is considered Level 1 of the fair value hierarchy as they are measured using quoted market prices. As of June 25, 2023 and December 25, 2022, the fair value of the mutual fund investments and deferred compensation obligations were as follows (in thousands): June 25, 2023 December 25, 2022 Level 1 Level 1 Assets - Investments designated for deferred compensation plan Cash/money accounts $ 995 $ 1,470 Mutual funds 2,625 2,241 Total assets $ 3,620 $ 3,711 As of June 25, 2023 and December 25, 2022, we had no Level 2 or Level 3 assets. The deferred compensation investments and obligations are included in other assets, accrued expenses and other long-term liabilities in the consolidated balance sheets. Changes in the fair value of securities held in the rabbi trust are recognized as trading gains and losses and included in other income in the consolidated statements of operations and offsetting increases or decreases in the deferred compensation obligation are recorded in other long-term liabilities in the consolidated balance sheets. Refer to Note 8. Debt for additional information relating to the fair value of the Company's outstanding debt instruments. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis |
DEBT
DEBT | 6 Months Ended |
Jun. 25, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt consisted of the following (in thousands): June 25, 2023 December 25, 2022 2023 Term Loan $ 300,000 $ — 2014 Term B-3 Loans — 322,428 2023 Revolver Facility 10,000 — Unamortized discount and debt issuance costs (3,332) (3,848) Total debt, net 306,668 318,580 Less: Short-term debt (10,000) — Less: Current portion of long-term debt (7,500) (4,155) Long-term debt, net $ 289,168 $ 314,425 2023 Credit Agreement On February 2, 2023 (the "Closing Date"), PHD Intermediate LLC (“Holdings”), Portillo’s Holdings LLC (the “Borrower”), the other Guarantors party thereto from time to time, each lender party thereto from time to time and Fifth Third Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender entered into a credit agreement (“2023 Credit Agreement”) which provides for a term A loan (the "2023 Term Loan") in an initial aggregate principal amount of $300.0 million and revolving credit commitments in an initial aggregate principal amount of $100.0 million (the “2023 Revolver Facility”). The 2023 Term Loan and 2023 Revolver Facility are scheduled to mature on February 2, 2028. The 2023 Term Loan and the 2023 Revolver Facility will accrue interest at the forward-looking secured overnight financing rate (“SOFR”) plus an applicable rate determined upon the consolidated total net rent adjusted leverage ratio, subject to a floor of 0.00% (plus a credit spread adjustment of 0.10% per annum for 1-month interest periods and 0.15% for 3-month interest periods). As of June 25, 2023, the interest rate on both the 2023 Term Loan and 2023 Revolver Facility was 8.00%. Pursuant to the 2023 Credit Agreement, as of June 25, 2023, the commitment fees to maintain the 2023 Revolver Facility were 0.250%, letter of credit fees were 2.75%, and letter of credit fronting fees were 0.125%. Commitment fees, letter of credit fees, and letter of credit fronting fees are recorded as interest expense in the condensed consolidated statements of operations. As of June 25, 2023, the effective interest rate was 8.16%. The 2023 Term Loan will amortize in equal quarterly installments in aggregate annual amounts equal to $7.5 million for the first two (2) years following the Closing Date, (b) $15.0 million for the third (3rd) and fourth (4th) years following the Closing Date, and (c) $30.0 million for the fifth (5th) year following the Closing Date, commencing on the last day of the first full fiscal quarter ended after the Closing Date, with the balance payable on the final maturity date. As of June 25, 2023, outstanding borrowings under the 2023 Credit Agreement totaled $310.0 million, comprising $300.0 million under the 2023 Term Loan and $10.0 million under the 2023 Revolver Facility. Letters of credit issued under the 2023 Revolver Facility totaled $4.3 million. As a result, as of June 25, 2023, the Company had $85.7 million available under the 2023 Revolver Facility. On July 31, 2023, the Company made a $5.0 million payment on the 2023 Revolver Facility (see Note 16. Subsequent Events for additional details). 2014 Credit Agreement Holdings, the Borrower and certain of its subsidiaries entered into a credit agreement ("2014 Credit Agreement"), dated as of August 1, 2014 and as amended October 25, 2016, May 18, 2018 and December 6, 2019, with UBS AG, Stamford Branch, as the administrative agent and collateral agent, and other lenders from time to time party thereto (the “2014 Lenders”). The 2014 Lenders extended credit in the form of (i) first lien initial term loans in an initial aggregate principal amount of $335.0 million and (ii) a revolving credit facility in an original principal amount equal to $30.0 million, including a letter of credit sub-facility with a $7.5 million sublimit (the “2014 Revolving Facility” and the loans thereunder, the “2014 Revolving Loans”). On December 6, 2019, the Borrower entered a third amendment to the 2014 Credit Agreement (the “Third Amendment to 2014 Credit Agreement”) whereby the aggregate principal amount of the term loans as of the effective date of the Third Amendment to 2014 Credit Agreement was $332.4 million (the “2014 Term B-3 Loans”), and the 2014 Revolving Facility was increased to $50.0 million. The maturity date with respect to the 2014 Term B-3 Loans was extended to September 6, 2024, and the maturity date with respect to the 2014 Revolving Loans was extended to June 6, 2024. In connection with the Third Amendment to 2014 Credit Agreement, the interest rates spread for the 2014 Term B-3 Loans increased by 100 basis points to 5.50% for the adjusted London interbank offered rate ("Eurocurrency Rate") loans. As of June 26, 2022, the interest rate on the 2014 Term B-3 Loans was 6.56%. Beginning with December 31, 2019, the Company is required to pay on the last business day of each calendar quarter, March 31, June 30, September 30, and December 31, an aggregate principal amount of $0.8 million. As of December 25, 2022, the Company had no borrowings under the 2014 Revolving Facility. As of June 26, 2022, the interest rate on the 2014 Revolving Facility was 3.25%, subject to change based on a consolidated first lien net leverage ratio as defined in the 2014 Credit Agreement. As of June 26, 2022, the commitment fees, pursuant to the 2014 Credit Agreement, to maintain the 2014 Revolving Facility were 0.250%. Also pursuant to the 2014 Credit Agreement, as of June 26, 2022, letter of credit fronting fees were 0.125%. Commitment fees and letter of credit fronting fees are recorded as interest expense in the condensed consolidated statements of operations. As of June 26, 2022, the effective interest rate was 7.38% . The Company had $4.2 million of letters of credit issued against the 2014 Revolving Facility as of December 25, 2022. On February 2, 2023, the Company used proceeds from the 2023 Term Loan and 2023 Revolver Facility, along with cash on hand, to pay off the 2014 Credit Agreement in full in the amount of $321.8 million. The 2023 Revolver Facility under the 2023 Credit Agreement replaces the $50.0 million 2014 Revolving Facility under the 2014 Credit Agreement. Discount and Debt Issuance Costs Pursuant to the 2023 Credit Agreement, the Company capitalized deferred financing costs and issuance discount of $3.6 million which will be amortized over the term of the 2023 Credit Agreement. In connection with the repayment of the 2014 Credit Agreement as described above, deferred financing costs and original issuance discount of $3.5 million were recorded as a loss on debt extinguishment during the two quarters ended June 25, 2023 in the condensed consolidated statement of operations. The Company amortized an immaterial amount and $0.3 million of deferred financing costs during the quarter and two quarters ended June 25, 2023, respectively, and $0.5 million and $0.9 million during the quarter and two quarters ended June 26, 2022, respectively, which is included in interest expense in the condensed consolidated statements of operations. In addition, the Company also amortized $0.2 million and $0.3 million in original issue discount related to the long-term debt during the quarter and two quarters ended June 25, 2023, respectively, and $0.1 million and $0.3 million, respectively, in the quarter and two quarters ended June 26, 2022 which is included in interest expense in the condensed consolidated statements of operations. Total interest costs incurred were $6.5 million and $14.0 million for the quarter and two quarters ended June 25, 2023, respectively, and $6.1 million and $12.2 million for the quarter and two quarters ended June 26, 2022, respectively. As of June 25, 2023 and December 25, 2022, the fair value of long-term debt approximates the carrying value as it is variable rate debt. The fair value measurement of this debt is considered Level 2 of the fair value hierarchy as inputs to interest are observable, unadjusted quoted prices in active markets for similar assets or liabilities. The 2023 Credit Agreement is guaranteed by all domestic subsidiaries of the Borrower (subject to customary exceptions) and secured by liens on substantially all of the assets of Holdings, the Borrower and the subsidiary guarantors (subject to customary exceptions). |
LEASES
LEASES | 6 Months Ended |
Jun. 25, 2023 | |
Leases [Abstract] | |
LEASES | LEASES We qualify as an emerging growth company pursuant to the provisions of the Jumpstart our Business Startups ("JOBS") Act. As such, we adopted ASU 2016-02, Leases (Topic 842) , along with related clarifications and improvements, using a modified retrospective approach, with first presentation of the application of ASC 842 in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022. Quarterly interim financial statements for 2023 are presented under ASC 842. Quarterly interim financial statements were not required in 2022 under prior lease accounting guidance, therefore comparative amounts are not presented for those periods. A summary of operating lease right-of-use assets and liabilities is as follows (in thousands): Operating leases Classification June 25, 2023 December 25, 2022 Right-of-use assets Operating lease assets $ 179,449 $ 166,808 179,449 166,808 Current lease liabilities Short-term operating lease liability 5,053 4,849 Non-current lease liabilities Long-term operating lease liability 217,989 200,166 $ 223,042 $ 205,015 The components of lease expense were as follows (in thousands): Quarter Ended Two Quarters Ended Operating leases Classification June 25, 2023 June 25, 2023 Operating lease cost Occupancy $ 7,007 $ 13,835 Short-term operating lease cost Occupancy 180 332 Variable lease cost Occupancy 1,028 2,022 $ 8,215 $ 16,189 A summary of lease terms and discount rates for operating leases is as follows: Operating leases June 25, 2023 December 25, 2022 Weighted-average remaining lease term (years): 25.4 25.0 Weighted-average discount rate: 9.8 % 9.8 % Supplemental cash flow information related to leases is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 5,808 $ 11,581 Operating lease assets obtained in exchange for lease liabilities: Operating leases 7,834 15,097 As of June 25, 2023, the maturity analysis of the lease liabilities consisted of the following (in thousands): Year Ending Operating Leases 2023 (excluding the two quarters ended June 25, 2023) $ 11,987 2024 24,548 2025 24,558 2026 24,638 2027 23,933 Thereafter 583,994 Total lease payments 693,658 Less: imputed interest (470,616) Total operating lease liabilities $ 223,042 As of June 25, 2023, operating lease payments include $398.7 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $53.1 million of minimum payments for leases signed but not yet commenced. |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 6 Months Ended |
Jun. 25, 2023 | |
Noncontrolling Interest [Abstract] | |
NON-CONTROLLING INTERESTS | NON-CONTROLLING INTERESTS We are the sole managing member of Portillo's OpCo, and as a result, consolidate the financial results of Portillo's OpCo. We report a non-controlling interest representing the LLC Units in Portillo's OpCo held by pre-IPO LLC Members. Changes in our ownership interest in Portillo's OpCo while we retain our controlling interest in Portillo's OpCo will be accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Units in Portillo's OpCo by the pre-IPO LLC members will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital. In the first and second quarters of 2023, in connection with the Q1 Secondary Offering and Overallotment Option described in Note 1. Description Of Business, 6,350,717 of LLC Units and corresponding shares of Class B common stock were redeemed, respectively, by the pre-IPO LLC Members for newly-issued shares of Class A common stock. We received a total of 6,350,717 newly-issued LLC Units, increasing our total ownership interest in Portillo's OpCo. The following table summarizes the LLC interest ownership by Portillo's Inc. and pre-IPO LLC members: June 25, 2023 December 25, 2022 LLC Units Ownership % LLC Units Ownership % Portillo's Inc. 55,073,993 75.9 % 48,420,723 67.0 % pre-IPO LLC Members 17,472,926 24.1 % 23,837,162 33.0 % Total 72,546,919 100.0 % 72,257,885 100.0 % The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to Portillo's Inc. and the pre-IPO LLC Members. The pre-IPO LLC Members' weighted average ownership percentage for the quarter and two quarters ended June 25, 2023 was 24.2% and 27.8%, respectively. The pre-IPO LLC Members' weighted average ownership percentage for both the quarter and two quarters ended June 26, 2022 was 49.8%. The following table summarizes the effects of changes in ownership in Portillo's OpCo on the Company’s equity (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Net income attributable to Portillo's Inc. $ 6,788 $ 5,111 $ 6,274 $ 5,305 Activity under equity-based compensation plans 577 1,447 1,288 1,447 Non-controlling interest adjustment 4,109 722 47,845 722 Redemption of LLC Units (5) — (64) — Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis (1,189) — (13,682) — Total effect of changes in ownership interest on equity attributable to Portillo's Inc. $ 10,280 $ 7,280 $ 41,661 $ 7,474 |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 6 Months Ended |
Jun. 25, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Equity-based compensation expense is calculated based on equity awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment to equity-based compensation expense will be recognized at that time. Equity-based compensation expense included in the Company’s consolidated statements of operations is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Labor $ 440 $ 340 $ 785 $ 689 General and administrative expenses 3,744 3,525 6,935 6,960 Total equity-based compensation expense $ 4,184 $ 3,865 $ 7,720 $ 7,649 During the quarter ended June 25, 2023, we granted 236,096 and 56,488 restricted stock units (“RSUs”) under the Portillo's Inc. 2021 Equity Incentive Plan (the "2021 Plan") to certain employees and directors, respectively. During the two quarters ended June 25, 2023, we granted 236,812 and 56,488 RSUs under the 2021 Plan to certain employees and directors, respectively. The weighted average fair value of these awards was determined using the Company's closing stock price on the applicable grant dates, which was $20.51. The RSUs granted to employees will vest one-third on each of the first three Employee Stock Purchase Plan During the quarter and two quarters ended June 25, 2023, the Company issued 9,051 and 15,014 shares, respectively, under the Employee Stock Purchase Plan ("ESPP"). At June 25, 2023, 227,248 shares remained available for issuance under the ESPP. The expense incurred under the ESPP was immaterial for the quarter and two quarters ended June 25, 2023 and is included within general and administrative expenses and labor in the condensed consolidated statements of operations. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 25, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESWe are the sole managing member of Portillo's OpCo, and as a result, consolidate the financial results of Portillo's OpCo. Portillo's OpCo is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Portillo's OpCo is not subject to U.S. federal and state and local income taxes in the majority of states in which it operates. Any taxable income or loss generated by Portillo's OpCo is passed through to and included in the taxable income or loss of its members, including us, based upon the respective member's ownership percentage in Portillo's OpCo. We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Portillo's OpCo, as well as any stand-alone income or loss generated by Portillo's Inc. Income Tax Expense The effective income tax rate for the quarter and two quarters ended June 25, 2023 was 13.5% and 10.2%, and 17.9% and 18.1% for the quarter and two quarters ended June 26, 2022, respectively . The decrease in our effective income tax rate for the quarter and two quarters ended June 25, 2023 compared to the quarter and two quarters ended June 26, 2022 was primarily driven by the recording of net operating loss carryforwards, partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its share of taxable income (loss) of Portillo's OpCo. The Company’s annual effective tax rate differs from the statutory rate of 21% primarily because the Company is not liable for federal or state income taxes on the portion of OpCo’s earnings that are attributable to non-controlling interests, deferred tax adjustments and impacts from equity-based award activity. We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of a deferred tax asset may not be realized. As of June 25, 2023, the Company concluded, based on the weight of all available positive and negative evidence, that all of its deferred tax assets (except for those deferred tax assets relating to the basis difference in its investment in Portillo's OpCo that will never be realizable or only reverse upon the eventual sale of its interest in Portillo's OpCo, which we expect would result in a capital loss which we do not expect to be able to utilize) are more likely than not to be realized. Secondary Offerings In the first quarter of 2023, in connection with the Q1 Secondary Offering and Overallotment Option previously discussed in Note 1. Description Of Business, 6,350,717 LLC Units were redeemed by the pre-IPO LLC Members for newly-issued shares of Class A common stock and on April 5, 2023, the Underwriter exercised its overallotment option in part, causing an additional 457,117 LLC Units to be redeemed. As a result, an increase in the tax basis of net assets of Portillo's OpCo subject to the provisions of the Tax Receivable Agreement (the "Tax Receivable Agreement" or "TRA") was recorded. The Company recorded a deferred tax asset of $37.5 million and an additional TRA liability of $51.2 million . As of June 25, 2023, we estimated that our obligation for future payments under the TRA liability totaled $302.0 million . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 25, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic net earnings per share of Class A common stock is computed by dividing net income attributable to Portillo's Inc. by the weighted-average number of Class A common stock outstanding. Diluted net earnings per share is computed by dividing net income attributable to Portillo's Inc. by the weighted-average number of dilutive securities, using the treasury stock method. The computations of basic and diluted earnings per share for the quarters and two quarters ended June 25, 2023 and June 26, 2022 are as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Net income $ 9,898 $ 10,756 $ 8,625 $ 11,306 Net income attributable to non-controlling interests 3,110 5,645 2,351 6,001 Net income attributable to Portillo's Inc. $ 6,788 $ 5,111 $ 6,274 $ 5,305 Shares: Weighted-average number of common shares outstanding-basic 54,965 35,991 52,252 35,899 Dilutive share awards 3,585 3,696 3,554 3,940 Weighted-average number of common shares outstanding-diluted 58,550 39,687 55,806 39,839 Basic net income per share $ 0.12 $ 0.14 $ 0.12 $ 0.15 Diluted net income per share $ 0.12 $ 0.13 $ 0.11 $ 0.13 The following shares were excluded from the calculation of diluted earnings per share because they would be antidilutive (in thousands) : Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Shares subject to performance conditions 1,807 1,794 1,807 1,794 Shares that were antidilutive 22 28 14 18 Total shares excluded from diluted net income per share 1,829 1,822 1,821 1,812 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 25, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIESThe Company is party to legal proceedings and potential claims arising in the normal conduct of business, including claims related to employment matters, contractual disputes, customer injuries, and property damage. Although the ultimate outcome of these claims and lawsuits cannot be predicted with certainty, management believes that the resulting liability, if any, will not have a material effect on the Company’s condensed consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 25, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of both June 25, 2023 and December 25, 2022, the related parties’ receivables balance consisted of $0.4 million due from C&O, which is included in accounts receivable in the condensed consolidated balance sheets. Olo, Inc. Noah Glass, a member of the Company's Board, is the founder and CEO of Olo, Inc. ("Olo"), a platform the Company uses in connection with our mobile ordering application and delivery. The Company incurred the following Olo-related costs for th e quarter and two quarters ended June 25, 2023 and June 26, 2022 (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Food, beverage and packaging costs $ 478 $ 558 $ 1,063 $ 883 Other operating expenses 112 101 226 215 Net Olo-related costs $ 590 $ 659 $ 1,289 $ 1,098 As of June 25, 2023 and December 25, 2022, $0.1 million and $0.2 million, respectively, were payable to Olo and was included in accounts payable in the condensed consolidated balance sheets. Tax Receivable Agreement We are party to a TRA with certain members of Portillo's OpCo that provides for the payment by us of 85% of the amount of tax benefits, if any, that Portillo's Inc. actually realizes or in some cases is deemed to realize as a result of certain transactions. The Company made payments of $0.8 million under the TRA relating to tax year 2021 during the two quarters ended June 25, 2023. There were no amounts paid under the TRA during the quarter ended June 25, 2023 and quarter and two quarters ended June 26, 2022. (in thousands) June 25, 2023 December 25, 2022 Current portion of Tax Receivable Agreement liability $ 6,309 $ 813 Tax receivable agreement liability 295,696 252,003 Secondary Offerings In connection with the secondary offerings previously discussed in Note 1. Description Of Business, we purchased LLC Units and corresponding shares of Class B common stock and shares of Class A common stock using the proceeds of the secondary offerings at a price equal to the public offering price less the underwriting discounts and commissions from certain pre-IPO LLC Members and shareholders of the Blocker Companies, including from funds affiliated with Berkshire Partners LLC, which is our largest shareholder that beneficially owns approximately 30.8% of the Company as of June 25, 2023 . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 25, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On July 31, 2023, the Company made a $5.0 million payment on the 2023 Revolver Facility. The outstanding balance of the 2023 Revolver Facility upon payment is $5.0 million. As a result, as of July 31, 2023, the Company had $90.7 million available under the 2023 Revolver Facility. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Pay vs Performance Disclosure | ||||
Net income attributable to Portillo's Inc. | $ 6,788 | $ 5,111 | $ 6,274 | $ 5,305 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 25, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 25, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated f inancial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022. |
Consolidation | All intercompany balances and transactions have been eliminated in consolidation. |
Segment Reporting | Segment Reporting The Company owns and operates fast-casual restaurants in the United States, along with two food production commissaries in Illinois. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer ("CEO"). The CODM reviews financial performance and allocates resources at a consolidated level on a recurring basis. The Company has one operating segment and one reportable segment. |
Fiscal Year | Fiscal Year The Company uses a 52- or 53-week fiscal year ending on the Sunday prior to or on December 31. In a 52-week fiscal year, each quarterly period is comprised of 13 weeks. The additional week in a 53-week fiscal year is added to the fourth quarter. Fiscal 2023 and 2022 consist of 53 and 52 weeks, respectively. The fiscal periods presented in this report are the quarters and two quarters ended June 25, 2023 and June 26, 2022, respectively. |
Use of Estimates | Use of EstimatesThe preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the period. Actual results could differ from those estimates. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. FASB has extended the sunset date to December 31, 2024. The Company does not believe the impact of the transition from LIBOR to alternative reference rates is material to its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASC 842"), along with related clarifications and improvements. The pronouncement requires lessees to recognize a liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases. The update is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company adopted this standard effective December 27, 2021, electing the modified retrospective approach to apply the standard as of the transition date. We have elected the transition package of three practical expedients permitted under the new standard, which eliminates the requirement to reassess the conclusions about historical lease identifications, lease classifications, and initial direct costs. We did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease terms and impairments of right-of-use assets. We elected to apply the practical expedient of combining lease and non-lease components. Additionally, we elected to utilize the short-term lease exception policy, which allows us to not apply the recognition requirements of this standard to leases with a term of 12 months or less. The adoption of this standard had a significant impact on the Company’s condensed consolidated balance sheet as we recognized the right-of-use asset and lease liabilities for our operating leases. The adoption had an immaterial impact on the condensed consolidated statement of operations, cash flows and overall liquidity. See Note 9. Leases for additional information. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Gift Card Liability | The gift card liability included in current deferred revenue on the condensed consolidated balance sheets is as follows (in thousands): June 25, 2023 December 25, 2022 Gift card liability $ 4,624 $ 6,988 Revenue recognized in the condensed consolidated statement of operations for the redemption of gift cards that were included in their respective liability balances at the beginning of the year is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Revenue recognized from gift card liability balance at the beginning of the year $ 900 $ 830 $ 2,837 $ 2,681 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): June 25, 2023 December 25, 2022 Raw materials $ 4,711 $ 5,722 Work in progress 123 104 Finished goods 846 876 Consigned inventory 813 685 $ 6,493 $ 7,387 |
PROPERTY & EQUIPMENT, NET (Tabl
PROPERTY & EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): June 25, 2023 December 25, 2022 Land improvements $ 16,525 $ 16,369 Furniture, fixtures, and equipment 139,943 126,130 Leasehold improvements 180,639 153,341 Transportation equipment 2,672 2,281 Construction-in-progress 26,081 35,386 365,860 333,507 Less accumulated depreciation (115,417) (106,471) $ 250,443 $ 227,036 |
GOODWILL & INTANGIBLE ASSETS (T
GOODWILL & INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangibles, Net | Intangibles, net consisted of the following (in thousands): June 25, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (25,761) 30,356 $ 280,042 $ (25,761) $ 254,281 December 25, 2022 Gross Carrying Amount Accumulated Amortization ASC 842 Adjustment Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (24,317) — 31,800 Covenants not-to-compete 40,799 (40,799) — — Favorable rental contracts 2,991 (1,849) (1,142) — $ 323,832 $ (66,965) $ (1,142) $ 255,725 |
Schedule of Finite-Lived Intangibles, Net | Intangibles, net consisted of the following (in thousands): June 25, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (25,761) 30,356 $ 280,042 $ (25,761) $ 254,281 December 25, 2022 Gross Carrying Amount Accumulated Amortization ASC 842 Adjustment Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ — $ 223,925 Intangibles subject to amortization: Recipes 56,117 (24,317) — 31,800 Covenants not-to-compete 40,799 (40,799) — — Favorable rental contracts 2,991 (1,849) (1,142) — $ 323,832 $ (66,965) $ (1,142) $ 255,725 |
Schedule of Aggregate Amortization Expense | The estimated aggregate amortization expense related to intangible assets held at June 25, 2023 for the remainder of this year and the succeeding five years and thereafter is as follows (in thousands): Estimated Amortization 2023 (excluding the two quarters ended June 25, 2023) $ 1,445 2024 2,813 2025 2,707 2026 2,707 2027 2,707 2028 2,707 2029 and thereafter 15,270 $ 30,356 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Mutual Fund Investments and Deferred Compensation Obligations | As of June 25, 2023 and December 25, 2022, the fair value of the mutual fund investments and deferred compensation obligations were as follows (in thousands): June 25, 2023 December 25, 2022 Level 1 Level 1 Assets - Investments designated for deferred compensation plan Cash/money accounts $ 995 $ 1,470 Mutual funds 2,625 2,241 Total assets $ 3,620 $ 3,711 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Debt consisted of the following (in thousands): June 25, 2023 December 25, 2022 2023 Term Loan $ 300,000 $ — 2014 Term B-3 Loans — 322,428 2023 Revolver Facility 10,000 — Unamortized discount and debt issuance costs (3,332) (3,848) Total debt, net 306,668 318,580 Less: Short-term debt (10,000) — Less: Current portion of long-term debt (7,500) (4,155) Long-term debt, net $ 289,168 $ 314,425 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Right-of-use Assets and Liabilities | A summary of operating lease right-of-use assets and liabilities is as follows (in thousands): Operating leases Classification June 25, 2023 December 25, 2022 Right-of-use assets Operating lease assets $ 179,449 $ 166,808 179,449 166,808 Current lease liabilities Short-term operating lease liability 5,053 4,849 Non-current lease liabilities Long-term operating lease liability 217,989 200,166 $ 223,042 $ 205,015 |
Schedule of Components of Lease Expense | The components of lease expense were as follows (in thousands): Quarter Ended Two Quarters Ended Operating leases Classification June 25, 2023 June 25, 2023 Operating lease cost Occupancy $ 7,007 $ 13,835 Short-term operating lease cost Occupancy 180 332 Variable lease cost Occupancy 1,028 2,022 $ 8,215 $ 16,189 Supplemental cash flow information related to leases is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 25, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 5,808 $ 11,581 Operating lease assets obtained in exchange for lease liabilities: Operating leases 7,834 15,097 |
Schedule of Lease Terms and Discount Rates | A summary of lease terms and discount rates for operating leases is as follows: Operating leases June 25, 2023 December 25, 2022 Weighted-average remaining lease term (years): 25.4 25.0 Weighted-average discount rate: 9.8 % 9.8 % |
Schedule of Maturity Analysis of Lease Liabilities | As of June 25, 2023, the maturity analysis of the lease liabilities consisted of the following (in thousands): Year Ending Operating Leases 2023 (excluding the two quarters ended June 25, 2023) $ 11,987 2024 24,548 2025 24,558 2026 24,638 2027 23,933 Thereafter 583,994 Total lease payments 693,658 Less: imputed interest (470,616) Total operating lease liabilities $ 223,042 |
NON-CONTROLLING INTERESTS (Tabl
NON-CONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of LLC Interest Ownership by Portillo's Inc. and Pre-IPO LLC Members | The following table summarizes the LLC interest ownership by Portillo's Inc. and pre-IPO LLC members: June 25, 2023 December 25, 2022 LLC Units Ownership % LLC Units Ownership % Portillo's Inc. 55,073,993 75.9 % 48,420,723 67.0 % pre-IPO LLC Members 17,472,926 24.1 % 23,837,162 33.0 % Total 72,546,919 100.0 % 72,257,885 100.0 % |
Schedule of Effects of Changes in Ownership in Portillo's OpCo on the Company’s Equity | The following table summarizes the effects of changes in ownership in Portillo's OpCo on the Company’s equity (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Net income attributable to Portillo's Inc. $ 6,788 $ 5,111 $ 6,274 $ 5,305 Activity under equity-based compensation plans 577 1,447 1,288 1,447 Non-controlling interest adjustment 4,109 722 47,845 722 Redemption of LLC Units (5) — (64) — Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis (1,189) — (13,682) — Total effect of changes in ownership interest on equity attributable to Portillo's Inc. $ 10,280 $ 7,280 $ 41,661 $ 7,474 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation Expense | Equity-based compensation expense included in the Company’s consolidated statements of operations is as follows (in thousands): Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Labor $ 440 $ 340 $ 785 $ 689 General and administrative expenses 3,744 3,525 6,935 6,960 Total equity-based compensation expense $ 4,184 $ 3,865 $ 7,720 $ 7,649 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computations of Basic and Diluted (Loss) Earnings per Share | Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Net income $ 9,898 $ 10,756 $ 8,625 $ 11,306 Net income attributable to non-controlling interests 3,110 5,645 2,351 6,001 Net income attributable to Portillo's Inc. $ 6,788 $ 5,111 $ 6,274 $ 5,305 Shares: Weighted-average number of common shares outstanding-basic 54,965 35,991 52,252 35,899 Dilutive share awards 3,585 3,696 3,554 3,940 Weighted-average number of common shares outstanding-diluted 58,550 39,687 55,806 39,839 Basic net income per share $ 0.12 $ 0.14 $ 0.12 $ 0.15 Diluted net income per share $ 0.12 $ 0.13 $ 0.11 $ 0.13 |
Schedule of Units Excluded from Calculation of Diluted Earnings per Share | The following shares were excluded from the calculation of diluted earnings per share because they would be antidilutive (in thousands) : Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Shares subject to performance conditions 1,807 1,794 1,807 1,794 Shares that were antidilutive 22 28 14 18 Total shares excluded from diluted net income per share 1,829 1,822 1,821 1,812 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 25, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Quarter Ended Two Quarters Ended June 25, 2023 June 26, 2022 June 25, 2023 June 26, 2022 Food, beverage and packaging costs $ 478 $ 558 $ 1,063 $ 883 Other operating expenses 112 101 226 215 Net Olo-related costs $ 590 $ 659 $ 1,289 $ 1,098 We are party to a TRA with certain members of Portillo's OpCo that provides for the payment by us of 85% of the amount of tax benefits, if any, that Portillo's Inc. actually realizes or in some cases is deemed to realize as a result of certain transactions. The Company made payments of $0.8 million under the TRA relating to tax year 2021 during the two quarters ended June 25, 2023. There were no amounts paid under the TRA during the quarter ended June 25, 2023 and quarter and two quarters ended June 26, 2022. (in thousands) June 25, 2023 December 25, 2022 Current portion of Tax Receivable Agreement liability $ 6,309 $ 813 Tax receivable agreement liability 295,696 252,003 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 3 Months Ended | 6 Months Ended | ||||
Apr. 05, 2023 $ / shares shares | Mar. 26, 2023 $ / shares shares | Dec. 25, 2022 restaurant $ / shares shares | Sep. 25, 2022 $ / shares shares | Dec. 25, 2022 offering restaurant $ / shares | Jun. 25, 2023 restaurant food_production_commissary state | |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of states | state | 10 | |||||
Number of food production commissaries | food_production_commissary | 2 | |||||
Number of restaurants | restaurant | 71 | 71 | 75 | |||
Number of non-traditional locations | restaurant | 2 | 2 | 2 | |||
Portillo's Inc. | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of shares issued in transaction (in shares) | 6,350,717 | |||||
Portillo's Inc. | Portillo's Opco | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership % | 67% | 67% | 75.90% | |||
Portillo's Inc. | Blocker Companies | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Shares acquired (in shares) | 2,269,776 | |||||
Portillo's Inc. | Secondary Offering | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of shares issued in transaction (in shares) | 8,000,000 | 8,000,000 | 8,066,458 | |||
Sale of stock, price per share (in usd per share) | $ / shares | $ 21.05 | $ 22.69 | $ 23.75 | $ 22.69 | ||
Number of offerings | offering | 2 | |||||
Portillo's Inc. | Over-Allotment Option | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of shares issued in transaction (in shares) | 620,493 | 66,458 | ||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 21.05 | |||||
LLC Units | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,350,717 | |||||
Issuance (in shares) | 6,350,717 | |||||
pre-IPO LLC Members | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,350,717 | |||||
pre-IPO LLC Members | Portillo's Opco | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership % | 33% | 33% | 24.10% | |||
C&O | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Jun. 25, 2023 food_production_commissary segment | |
Accounting Policies [Abstract] | |
Number of food production commissaries | food_production_commissary | 2 |
Number of operating segments | 1 |
Number of reportable segments | 1 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Gift card sales that will not be redeemed, percent | 11% | 11% | ||
Gift card breakage | $ 200 | $ 200 | $ 528 | $ 474 |
REVENUE RECOGNITION - Gift Card
REVENUE RECOGNITION - Gift Card Liability (Details) - Gift Card - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | |
Revenue from External Customer [Line Items] | |||||
Gift card liability | $ 4,624 | $ 4,624 | $ 6,988 | ||
Revenue recognized from gift card liability balance at the beginning of the year | $ 900 | $ 830 | $ 2,837 | $ 2,681 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,711 | $ 5,722 |
Work in progress | 123 | 104 |
Finished goods | 846 | 876 |
Consigned inventory | 813 | 685 |
Total inventory | $ 6,493 | $ 7,387 |
PROPERTY & EQUIPMENT, NET (Deta
PROPERTY & EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 365,860 | $ 365,860 | $ 333,507 | ||
Less accumulated depreciation | (115,417) | (115,417) | (106,471) | ||
Total property and equipment | 250,443 | 250,443 | 227,036 | ||
Depreciation expense | 5,200 | $ 4,500 | 10,200 | $ 8,900 | |
Land improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 16,525 | 16,525 | 16,369 | ||
Furniture, fixtures, and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 139,943 | 139,943 | 126,130 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 180,639 | 180,639 | 153,341 | ||
Transportation equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 2,672 | 2,672 | 2,281 | ||
Construction-in-progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 26,081 | $ 26,081 | $ 35,386 |
GOODWILL & INTANGIBLE ASSETS -
GOODWILL & INTANGIBLE ASSETS - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 USD ($) | Jun. 26, 2022 USD ($) | Jun. 25, 2023 USD ($) reporting_unit | Jun. 26, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of reporting units | reporting_unit | 1 | |||
Amortization expense | $ | $ 0.7 | $ 0.8 | $ 1.4 | $ 1.6 |
GOODWILL & INTANGIBLE ASSETS _2
GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 | Dec. 27, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 223,925 | $ 223,925 | |
Accumulated Amortization | (25,761) | (66,965) | |
Intangibles subject to amortization, net | 30,356 | ||
Gross Carrying Amount | 280,042 | 323,832 | |
Net Carrying Amount | 254,281 | 255,725 | |
Adoption of Accounting Standards Codification 842 - Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ (1,142) | ||
Recipes | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles subject to amortization, gross | 56,117 | 56,117 | |
Accumulated Amortization | (25,761) | (24,317) | |
Intangibles subject to amortization, net | $ 30,356 | 31,800 | |
Covenants not-to-compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles subject to amortization, gross | 40,799 | ||
Accumulated Amortization | (40,799) | ||
Intangibles subject to amortization, net | 0 | ||
Favorable rental contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles subject to amortization, gross | 2,991 | ||
Accumulated Amortization | (1,849) | ||
Intangibles subject to amortization, net | $ 0 | ||
Favorable rental contracts | Adoption of Accounting Standards Codification 842 - Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles subject to amortization, gross | $ (1,142) |
GOODWILL & INTANGIBLE ASSETS _3
GOODWILL & INTANGIBLE ASSETS - Future Amortization Expense (Details) $ in Thousands | Jun. 25, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (excluding the two quarters ended June 25, 2023) | $ 1,445 |
2024 | 2,813 |
2025 | 2,707 |
2026 | 2,707 |
2027 | 2,707 |
2028 | 2,707 |
2029 and thereafter | 15,270 |
Intangibles subject to amortization, net | $ 30,356 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Recurring | Level 1 | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Investments, fair value | 3,620,000 | 3,620,000 | $ 3,711,000 | ||
Recurring | Level 1 | Cash/money accounts | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Investments, fair value | 995,000 | 995,000 | 1,470,000 | ||
Recurring | Level 1 | Mutual funds | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Investments, fair value | $ 2,625,000 | $ 2,625,000 | $ 2,241,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 |
Debt Instrument [Line Items] | ||
Unamortized discount and debt issuance costs | $ (3,332) | $ (3,848) |
Total debt, net | 306,668 | 318,580 |
Less: Current portion of long-term debt | (7,500) | (4,155) |
Long-term debt, net | 289,168 | 314,425 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt | (10,000) | 0 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt | (7,500) | (4,155) |
Line of Credit | 2023 Term Loan | 2023 Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 300,000 | 0 |
Line of Credit | 2014 Term B-3 Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 322,428 |
Line of Credit | 2023 Revolver Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 10,000 | $ 0 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jul. 31, 2023 | Feb. 02, 2023 | Dec. 06, 2019 | Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | Aug. 01, 2014 | |
Debt Instrument [Line Items] | |||||||||
Loss on debt extinguishment | $ 0 | $ 0 | $ 3,465,000 | $ 0 | |||||
Amortization of debt issuance costs | 0 | 500,000 | 300,000 | 900,000 | |||||
Amortization of debt discount | 200,000 | 100,000 | 300,000 | 300,000 | |||||
Interest cost | $ 6,523,000 | $ 6,097,000 | $ 13,966,000 | $ 12,196,000 | |||||
Revolving Credit Facility | 2023 Revolver Facility | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit | $ 5,000,000 | ||||||||
Remaining borrowing capacity | 90,700,000 | ||||||||
Payments | $ 5,000,000 | ||||||||
Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage | 0.25% | ||||||||
Letter of credit fee percentage | 2.75% | 2.75% | |||||||
Fronting fee, percentage | 0.125% | 0.125% | |||||||
Effective interest rate | 8.16% | 7.38% | 8.16% | 7.38% | |||||
Line of credit | $ 310,000,000 | $ 310,000,000 | |||||||
Debt issuance costs | $ 3,600,000 | ||||||||
Line of Credit | Secured Overnight Financing Rate (SOFR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Adjusted leverage ratio | 0% | ||||||||
Line of Credit | One-Month Secured Overnight Financing Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Adjusted leverage ratio | 0.10% | ||||||||
Line of Credit | Three-Month Secured Overnight Financing Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Adjusted leverage ratio | 0.15% | ||||||||
Line of Credit | 2014 Term B-3 Loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 332,400,000 | $ 335,000,000 | |||||||
Interest rate (as of) | 6.56% | ||||||||
Periodic principal payment | 800,000 | ||||||||
Payments of debt | $ 321,800,000 | ||||||||
Loss on debt extinguishment | $ 3,500,000 | ||||||||
Line of Credit | 2014 Term B-3 Loans | Eurocurrency Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Adjusted leverage ratio | 5.50% | ||||||||
Increase in term loan percent | 1% | ||||||||
Line of Credit | 2014 Revolving Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit maximum borrowing capacity | $ 50,000,000 | ||||||||
Line of Credit | 2023 Term Loan | Term Loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | 300,000,000 | ||||||||
Interest rate at period end | 8% | 8% | |||||||
Annual amount for first year | $ 7,500,000 | $ 7,500,000 | |||||||
Annual amount for second year | 7,500,000 | 7,500,000 | |||||||
Annual amount for third year | 15,000,000 | 15,000,000 | |||||||
Annual amount for fourth year | 15,000,000 | 15,000,000 | |||||||
Annual amount for fifth year | 30,000,000 | 30,000,000 | |||||||
Line of credit | $ 300,000,000 | $ 300,000,000 | |||||||
Line of Credit | 2023 Term Loan | 2023 Revolver Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate at period end | 8% | 8% | |||||||
Line of Credit | Revolving Credit Facility | 2023 Revolver Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit maximum borrowing capacity | 100,000,000 | ||||||||
Line of credit | $ 10,000,000 | $ 10,000,000 | |||||||
Remaining borrowing capacity | 85,700,000 | 85,700,000 | |||||||
Line of Credit | Revolving Credit Facility | 2014 Revolving Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit maximum borrowing capacity | $ 50,000,000 | 30,000,000 | |||||||
Interest rate at period end | 3.25% | 3.25% | |||||||
Commitment fee percentage | 0.25% | ||||||||
Line of credit | $ 0 | ||||||||
Line of Credit | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit maximum borrowing capacity | $ 7,500,000 | ||||||||
Line of credit | $ 4,200,000 | ||||||||
Line of Credit | Letter of Credit | 2023 Revolver Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit | $ 4,300,000 | $ 4,300,000 | |||||||
Line of Credit | Letter of Credit | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Fronting fee, percentage | 0.125% | 0.125% |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classification of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 |
Leases [Abstract] | ||
Operating lease assets | $ 179,449 | $ 166,808 |
Current lease liabilities | 5,053 | 4,849 |
Non-current lease liabilities | 217,989 | 200,166 |
Right-of-use assets | $ 223,042 | $ 205,015 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 25, 2023 | Jun. 25, 2023 | |
Leases [Abstract] | ||
Operating lease cost | $ 7,007 | $ 13,835 |
Short-term operating lease cost | 180 | 332 |
Variable lease cost | 1,028 | 2,022 |
Operating leases | $ 8,215 | $ 16,189 |
LEASES - Schedule of Lease Term
LEASES - Schedule of Lease Terms and Discount Rates (Details) | Jun. 25, 2023 | Dec. 25, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term (years): | 25 years 4 months 24 days | 25 years |
Weighted-average discount rate: | 9.80% | 9.80% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 25, 2023 | Jun. 25, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 5,808 | $ 11,581 |
Operating lease assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 7,834 | $ 15,097 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 25, 2023 | Dec. 25, 2022 |
Operating Leases | ||
2023 (excluding the two quarters ended June 25, 2023) | $ 11,987 | |
2024 | 24,548 | |
2025 | 24,558 | |
2026 | 24,638 | |
2027 | 23,933 | |
Thereafter | 583,994 | |
Total lease payments | 693,658 | |
Less: imputed interest | (470,616) | |
Total operating lease liabilities | $ 223,042 | $ 205,015 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 25, 2023 USD ($) | |
Leases [Abstract] | |
Options to extend lease | $ 398.7 |
Minimum payments for leases signed but not yet commenced | $ 53.1 |
NON-CONTROLLING INTERESTS - Nar
NON-CONTROLLING INTERESTS - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2023 | Mar. 26, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Portillo's Opco | |||||
Noncontrolling Interest [Line Items] | |||||
Weighted average ownership percentage | 24.20% | 49.80% | 27.80% | 49.80% | |
LLC Units | |||||
Noncontrolling Interest [Line Items] | |||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,350,717 | ||||
Stock received, newly-issued LLC units (in shares) | 6,350,717 |
NON-CONTROLLING INTERESTS - Sch
NON-CONTROLLING INTERESTS - Schedule of LLC Interest Ownership by Portillo's Inc. and Pre-IPO LLC Members (Details) - shares | Jun. 25, 2023 | Dec. 25, 2022 |
Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Total | 100% | 100% |
LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 72,546,919 | 72,257,885 |
Portillo's Inc. | Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Ownership % | 75.90% | 67% |
Portillo's Inc. | LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 55,073,993 | 48,420,723 |
pre-IPO LLC Members | Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Ownership % | 24.10% | 33% |
pre-IPO LLC Members | LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 17,472,926 | 23,837,162 |
NON-CONTROLLING INTERESTS - Cha
NON-CONTROLLING INTERESTS - Changes in Ownership in Portillo's OpCo on the Company’s Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Noncontrolling Interest [Abstract] | ||||
Net income attributable to Portillo's Inc. | $ 6,788 | $ 5,111 | $ 6,274 | $ 5,305 |
Transfers from (to) non-controlling interests: | ||||
Activity under equity-based compensation plans | 577 | 1,447 | 1,288 | 1,447 |
Non-controlling interest adjustment | 4,109 | 722 | 47,845 | 722 |
Redemption of LLC Units | (5) | 0 | (64) | 0 |
Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis | (1,189) | 0 | (13,682) | 0 |
Total effect of changes in ownership interest on equity attributable to Portillo's Inc. | $ 10,280 | $ 7,280 | $ 41,661 | $ 7,474 |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | $ 4,184 | $ 3,865 | $ 7,720 | $ 7,649 |
Labor | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | 440 | 340 | 785 | 689 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total equity-based compensation expense | $ 3,744 | $ 3,525 | $ 6,935 | $ 6,960 |
EQUITY-BASED COMPENSATION - Nar
EQUITY-BASED COMPENSATION - Narrative (Details) | 3 Months Ended | 6 Months Ended |
Jun. 25, 2023 $ / shares shares | Jun. 25, 2023 $ / shares shares | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value, granted (in usd per share) | $ / shares | $ 20.51 | $ 20.51 |
Vesting period | 3 years | |
RSUs | Share-Based Payment Arrangement, Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights, percentage | 33% | |
RSUs | Share-Based Payment Arrangement, Tranche Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights, percentage | 33% | |
RSUs | Share-Based Payment Arrangement, Tranche Three | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights, percentage | 33% | |
RSUs | Share-Based Payment Arrangement, Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 236,096 | 236,812 |
RSUs | Share-Based Payment Arrangement, Nonemployee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 56,488 | 56,488 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued (in shares) | 9,051 | 15,014 |
Options available for issuance (in shares) | 227,248 | 227,248 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Apr. 05, 2023 | Jun. 25, 2023 | Mar. 26, 2023 | Sep. 25, 2022 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | |
Income Tax Contingency [Line Items] | ||||||||
Effective income tax rate percent | 13.50% | 17.90% | 10.20% | 18.10% | ||||
Deferred tax assets from Tax Receivable Agreement | $ 37,500,000 | |||||||
Additional tax receivable liability | $ 51,200,000 | |||||||
Tax receivable agreement liability | $ 302,000,000 | $ 302,000,000 | ||||||
TRA amounts paid | 0 | $ 0 | 800,000 | $ 0 | ||||
Expected payment | $ 6,309,000 | $ 6,309,000 | $ 813,000 | |||||
LLC Units | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Issuance (in shares) | 6,350,717 | |||||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 6,350,717 | |||||||
LLC Units | Underwriter Exercise Redemption | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Redemption of LLC Units in connection with the secondary offering (in shares) | 457,117 | |||||||
Portillo's Inc. | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Number of shares issued in transaction (in shares) | 6,350,717 | |||||||
Portillo's Inc. | Over-Allotment Option | ||||||||
Income Tax Contingency [Line Items] | ||||||||
Number of shares issued in transaction (in shares) | 620,493 | 66,458 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Basic and Diluted (Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 9,898 | $ 10,756 | $ 8,625 | $ 11,306 |
Net income attributable to non-controlling interests | 3,110 | 5,645 | 2,351 | 6,001 |
NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. | $ 6,788 | $ 5,111 | $ 6,274 | $ 5,305 |
Shares: | ||||
Weighted-average number of common shares outstanding-basic (in shares) | 54,964,649 | 35,991,079 | 52,252,053 | 35,899,125 |
Dilutive share awards (in shares) | 3,585,000 | 3,696,000 | 3,554,000 | 3,940,000 |
Weighted-average number of common shares outstanding-diluted (in shares) | 58,550,057 | 39,687,090 | 55,806,455 | 39,839,292 |
Basic net income per share (in usd per share) | $ 0.12 | $ 0.14 | $ 0.12 | $ 0.15 |
Diluted net income per share (in usd per share) | $ 0.12 | $ 0.13 | $ 0.11 | $ 0.13 |
EARNINGS PER SHARE - Schedule_2
EARNINGS PER SHARE - Schedule of Units Excluded from Calculation of Diluted Earnings per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income per share (in shares) | 1,829 | 1,822 | 1,821 | 1,812 |
Shares subject to performance conditions | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income per share (in shares) | 1,807 | 1,794 | 1,807 | 1,794 |
Shares that were antidilutive | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income per share (in shares) | 22 | 28 | 14 | 18 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Oct. 25, 2021 | Jun. 25, 2023 | Jun. 26, 2022 | Jun. 25, 2023 | Jun. 26, 2022 | Dec. 25, 2022 | |
Related Party Transaction [Line Items] | ||||||
Accounts receivable | $ 11,496,000 | $ 11,496,000 | $ 8,590,000 | |||
Food, beverage and packaging costs | 56,229,000 | $ 51,774,000 | 109,856,000 | $ 98,040,000 | ||
Other operating expenses | 18,832,000 | 15,178,000 | 37,536,000 | 30,343,000 | ||
Total restaurant operating expenses | 126,451,000 | 112,237,000 | 247,692,000 | 218,736,000 | ||
Accounts payable | 24,147,000 | 24,147,000 | 30,273,000 | |||
TRA obligation percent | 85% | |||||
TRA amounts paid | 0 | 0 | 800,000 | 0 | ||
Current portion of Tax Receivable Agreement liability | 6,309,000 | 6,309,000 | 813,000 | |||
Tax receivable agreement liability | $ 295,696,000 | $ 295,696,000 | 252,003,000 | |||
Portillo's Inc. | Berkshire Partners LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership % | 30.80% | 30.80% | ||||
Related party | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable | $ 400,000 | $ 400,000 | 400,000 | |||
Food, beverage and packaging costs | 478,000 | 558,000 | 1,063,000 | 883,000 | ||
Other operating expenses | 112,000 | 101,000 | 226,000 | 215,000 | ||
Total restaurant operating expenses | 590,000 | $ 659,000 | 1,289,000 | $ 1,098,000 | ||
Accounts payable | $ 100,000 | $ 100,000 | $ 200,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Revolving Credit Facility - 2023 Revolver Facility - Subsequent Event $ in Millions | Jul. 31, 2023 USD ($) |
Subsequent Event [Line Items] | |
Payments | $ 5 |
Line of credit | 5 |
Remaining borrowing capacity | $ 90.7 |