COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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, $0.01 par value per share | |
Trading Symbol | PTLO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 61,612,096 | |
Entity Central Index Key | 0001871509 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-29 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents and restricted cash | $ 13,184 | $ 10,438 |
Accounts and tenant improvement receivables | 14,447 | 14,183 |
Inventory | 8,510 | 8,733 |
Prepaid expenses | 6,246 | 8,565 |
Total current assets | 42,387 | 41,919 |
Property and equipment, net | 306,106 | 295,793 |
Operating lease assets | 194,852 | 193,825 |
Goodwill | 394,298 | 394,298 |
Trade names | 223,925 | 223,925 |
Other intangible assets, net | 28,189 | 28,911 |
Equity method investment | 16,641 | 16,684 |
Deferred tax assets | 203,615 | 184,701 |
Other assets | 6,877 | 5,485 |
Total other assets | 873,545 | 854,004 |
TOTAL ASSETS | 1,416,890 | 1,385,541 |
CURRENT LIABILITIES: | ||
Accounts payable | 29,323 | 33,189 |
Current portion of long-term debt | 7,500 | 7,500 |
Current portion of Tax Receivable Agreement liability | 7,191 | 4,428 |
Short-term debt | 32,000 | 15,000 |
Current deferred revenue | 5,193 | 7,180 |
Short-term operating lease liability | 5,773 | 5,577 |
Accrued expenses | 29,895 | 32,039 |
Total current liabilities | 116,875 | 104,913 |
LONG-TERM LIABILITIES: | ||
Long-term debt, net of current portion | 282,239 | 283,923 |
Tax Receivable Agreement liability | 321,328 | 295,390 |
Long-term operating lease liability | 241,433 | 238,414 |
Other long-term liabilities | 2,670 | 2,791 |
Total long-term liabilities | 847,670 | 820,518 |
Total liabilities | 964,545 | 925,431 |
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 | 341,750 | 308,212 |
Retained earnings | 18,174 | 13,612 |
Total stockholders' equity attributable to Portillo's Inc. | 360,539 | 322,379 |
Non-controlling interest | 91,806 | 137,731 |
Total stockholders' equity | 452,345 | 460,110 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,416,890 | 1,385,541 |
Class A Common Stock | ||
STOCKHOLDERS' EQUITY: | ||
Common stock | 615 | 555 |
Class B Common Stock | ||
STOCKHOLDERS' EQUITY: | ||
Common stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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) | 61,561,592 | 55,502,375 |
Common stock outstanding (in shares) | 61,561,592 | 55,502,375 |
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) | 11,640,555 | 17,472,926 |
Common stock outstanding (in shares) | 11,640,555 | 17,472,926 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Income Statement [Abstract] | ||
REVENUES, NET | $ 165,831 | $ 156,061 |
Restaurant operating expenses: | ||
Food, beverage and packaging costs | 56,961 | 53,626 |
Labor | 43,302 | 40,459 |
Occupancy | 9,340 | 8,451 |
Other operating expenses | 19,857 | 18,704 |
Total restaurant operating expenses | 129,460 | 121,240 |
General and administrative expenses | 18,540 | 18,778 |
Pre-opening expenses | 1,423 | 2,344 |
Depreciation and amortization | 6,944 | 5,670 |
Net income attributable to equity method investment | (205) | (207) |
Other income, net | (428) | (257) |
OPERATING INCOME | 10,097 | 8,493 |
Interest expense | 6,530 | 7,444 |
Interest income | (79) | 0 |
Tax Receivable Agreement liability adjustment | (561) | (584) |
Loss on debt extinguishment | 0 | 3,465 |
INCOME (LOSS) BEFORE INCOME TAXES | 4,207 | (1,832) |
Income tax benefit | (1,137) | (559) |
NET INCOME (LOSS) | 5,344 | (1,273) |
Net income (loss) attributable to non-controlling interests | 782 | (759) |
NET INCOME (LOSS) ATTRIBUTABLE TO PORTILLO'S INC. | $ 4,562 | $ (514) |
Net income (loss) per common share attributable to Portillo's Inc.: | ||
Basic (in usd per share) | $ 0.08 | $ (0.01) |
Diluted (in usd per share) | $ 0.08 | $ (0.01) |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 57,437,782 | 49,599,074 |
Diluted (in shares) | 60,493,958 | 49,599,074 |
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. 25, 2022 | 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 (loss) | (1,273) | (514) | (759) | |||||
Equity-based compensation | 3,537 | 2,425 | 1,112 | |||||
Activity under equity-based compensation plans (in shares) | 153,628 | |||||||
Activity under equity-based compensation plans | 713 | $ 2 | 711 | |||||
Redemption of LLC Interests (in shares) | 5,893,600 | (5,893,600) | ||||||
Redemption of LLC Interests | 0 | $ 59 | (59) | |||||
Non-controlling interest adjustment | 0 | 43,736 | (43,736) | |||||
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 | (12,493) | (12,493) | ||||||
Ending balance (in shares) at Mar. 26, 2023 | 54,467,951 | 17,943,562 | ||||||
Ending balance at Mar. 26, 2023 | 422,986 | $ 545 | $ 0 | 294,984 | (5,326) | 132,783 | ||
Beginning balance (in shares) at Dec. 31, 2023 | 55,502,375 | 17,472,926 | 55,502,375 | 17,472,926 | ||||
Beginning balance at Dec. 31, 2023 | 460,110 | $ 555 | $ 0 | 308,212 | 13,612 | 137,731 | ||
Total Stockholders' Equity | ||||||||
Net income (loss) | 5,344 | 4,562 | 782 | |||||
Equity-based compensation | 2,827 | 2,221 | 606 | |||||
Activity under equity-based compensation plans (in shares) | 226,846 | |||||||
Activity under equity-based compensation plans | 815 | $ 2 | 813 | |||||
Redemption of LLC Interests (in shares) | 5,832,371 | 5,832,371 | (5,832,371) | |||||
Redemption of LLC Interests | 0 | $ 58 | (58) | |||||
Non-controlling interest adjustment | 0 | 46,475 | (46,475) | |||||
Distributions paid to non-controlling interest holders | (838) | (838) | ||||||
Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis | (15,913) | (15,913) | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 61,561,592 | 11,640,555 | 61,561,592 | 11,640,555 | ||||
Ending balance at Mar. 31, 2024 | $ 452,345 | $ 615 | $ 0 | $ 341,750 | $ 18,174 | $ 91,806 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 5,344 | $ (1,273) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,944 | 5,670 |
Amortization of debt issuance costs and discount | 190 | 431 |
Loss on sales of assets | 76 | 118 |
Equity-based compensation | 2,827 | 3,537 |
Deferred income tax benefit | (1,137) | (559) |
Tax Receivable Agreement liability adjustment | (561) | (584) |
Gift card breakage | (300) | (329) |
Loss on debt extinguishment | 0 | 3,465 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (179) | 499 |
Receivables from related parties | (37) | (101) |
Inventory | 223 | 2,128 |
Other current assets | 1,228 | (957) |
Operating lease assets | 2,213 | 2,081 |
Accounts payable | (3,500) | (3,160) |
Accrued expenses and other liabilities | (3,792) | (4,513) |
Operating lease liabilities | (1,025) | (798) |
Deferred lease incentives | 942 | 850 |
Other assets and liabilities | (379) | (19) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 9,077 | 6,486 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (16,939) | (20,216) |
Proceeds from the sale of property and equipment | 0 | 26 |
NET CASH USED IN INVESTING ACTIVITIES | (16,939) | (20,190) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term debt, net | 17,000 | 10,000 |
Proceeds from long-term debt | 0 | 300,000 |
Payments of long-term debt | (1,875) | (322,428) |
Proceeds from equity offering, net of underwriting discounts | 114,960 | 166,400 |
Repurchase of outstanding equity / Portillo's OpCo units | (114,960) | (166,400) |
Distributions paid to non-controlling interest holders | (838) | 0 |
Proceeds from stock option exercises | 632 | 590 |
Employee withholding taxes related to net settled equity awards | (12) | (19) |
Proceeds from Employee Stock Purchase Plan purchases | 130 | 127 |
Payments of Tax Receivable Agreement liability | (4,429) | (813) |
Payment of deferred financing costs | 0 | (3,569) |
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES | 10,608 | (16,112) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 2,746 | (29,816) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 10,438 | 44,427 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | 13,184 | 14,611 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Interest paid | 6,282 | 5,703 |
Income tax paid | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrued capital expenditures | 12,402 | 4,852 |
Establishment of liabilities under Tax Receivable Agreement | $ 33,690 | $ 47,380 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Portillo’s Inc. ( "Inc.") was formed and incorporated as a Delaware corporation on June 8, 2021. Inc. 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"). Portillo's Inc. is the sole managing member of Portillo’s OpCo, and a s sole managing member, Inc. operates and controls all of the business and affairs 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 March 31, 2024 and December 31, 2023, the Company had 84 and 83 restaurants in operation, respectively. The Company also had two non-traditional locations in operation as of March 31, 2024 and December 31, 2023. 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 Chicago, L.L.C. ("C&O"), which is excluded from the Company's restaurant count noted above. The Company’s principal corporate offices are located in Oak Brook, Illinois. Secondary Offerings In the first quarter of 2024, the Company completed a secondary offering of 8,000,000 shares of the Company's Class A common stock at an offering price of $14.37 per share ("Q1 2024 Secondary Offering"). The Company granted BofA Securities, Inc., the underwriter (the "Underwriter"), a 30-day option to purchase up to an additional 1,200,000 shares of Class A common stock. The underwriter did not exercise its overallotment option within the 30-day period. We used all of the net proceeds from the Q1 2024 Secondary Offering 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 2024 Secondary Offering were used to (i) purchase 2,167,629 existing shares of Class A common stock from the shareholders of the Blocker Companies and (ii) redeem 5,832,371 LLC Units held by the pre-IPO LLC Members. In connection with the redemption, 5,832,371 shares of Class B common stock were surrendered by the pre-IPO LLC Members and canceled and the Company received 5,832,371 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 first quarter of 2023, the Company completed one secondary offering of 8,000,000 shares 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. As of March 31, 2024, the Company owns 84.1% of Portillo's OpCo and the pre-IPO LLC Members own the remaining 15.9% of Portillo's OpCo. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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 31, 2023 . 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 2024 and 2023 consist of 52 and 53 weeks, respectively. The fiscal periods presented in this report are the quarters ended March 31, 2024 and March 26, 2023, 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 Issued Accounting Standards In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If, by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently evaluating the effect of adopting this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires public entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2024 | |
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 $0.3 million for the quarters ended March 31, 2024 and March 26, 2023 . 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): March 31, 2024 December 31, 2023 Gift card liability $ 5,156 $ 6,981 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 March 31, 2024 March 26, 2023 Revenue recognized from gift card liability balance at the beginning of the year $ 2,070 $ 1,937 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 6,396 $ 6,737 Work in progress 143 157 Finished goods 1,198 912 Consigned inventory 773 927 $ 8,510 $ 8,733 |
PROPERTY & EQUIPMENT, NET
PROPERTY & EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY & EQUIPMENT, NET | PROPERTY & EQUIPMENT, NET Property and equipment, net consisted of the following (in thousands): March 31, 2024 December 31, 2023 Land improvements $ 19,353 $ 19,000 Furniture, fixtures, and equipment 158,619 155,871 Leasehold improvements 234,532 227,080 Transportation equipment 2,851 2,881 Construction-in-progress 22,631 16,808 437,986 421,640 Less accumulated depreciation (131,880) (125,847) $ 306,106 $ 295,793 Depreciation expense w as $6.2 million and $5.0 million for the quarters ended March 31, 2024 and March 26, 2023, respectively , and is included in depreciation and amortization in the condensed consolidated statements of operations. |
GOODWILL & INTANGIBLE ASSETS
GOODWILL & INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
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. Intangible assets, net consisted of the following (in thousands): March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,928) 28,189 $ 280,042 $ (27,928) $ 252,114 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,206) 28,911 $ 280,042 $ (27,206) $ 252,836 Amortization expense was $0.7 million for both the quarters ended March 31, 2024 and March 26, 2023, 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 March 31, 2024 for the remainder of this year and the succeeding five years and thereafter is as follows (in thousands): Estimated Amortization 2024 (excluding the quarter ending March 31, 2024) $ 2,091 2025 2,707 2026 2,707 2027 2,707 2028 2,707 2029 2,150 2030 and thereafter 13,120 $ 28,189 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2024 | |
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 and tenant improvement receivables, 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 March 31, 2024 and December 31, 2023, the fair value of the mutual fund investments and deferred compensation obligations were as follows (in thousands): March 31, 2024 December 31, 2023 Level 1 Level 1 Assets - Investments designated for deferred compensation plan Cash/money accounts $ 927 $ 1,083 Mutual funds 2,439 2,181 Total assets $ 3,366 $ 3,264 As of March 31, 2024 and December 31, 2023, 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 Measured at Fair Value on a Non-Recurring Basis |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt consisted of the following (in thousands): March 31, 2024 December 31, 2023 2023 Term Loan $ 292,500 $ 294,375 2023 Revolver Facility 32,000 15,000 Unamortized discount and debt issuance costs (2,761) (2,952) Total debt, net 321,739 306,423 Less: Short-term debt (32,000) (15,000) Less: Current portion of long-term debt (7,500) (7,500) Long-term debt, net $ 282,239 $ 283,923 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 March 31, 2024, the interest rates on the 2023 Term Loan and 2023 Revolver Facility were 7.96% and 7.93%, respectively. Pursuant to the 2023 Credit Agreement, as of March 31, 2024, the commitment fees to maintain the 2023 Revolver Facility were 0.20% and letter of credit fees were 2.50%. Commitment fees and letter of credit fees are recorded as interest expense in the condensed consolidated statements of operations. As of March 31, 2024, the effective interest rate was 8.37%. As of March 26, 2023, the interest rates on the 2023 Term Loan and 2023 Revolver Facility were 7.59% and 7.47%, respectively. Pursuant to the 2023 Credit Agreement, as of March 26, 2023, the commitment fees to maintain the 2023 Revolver Facility were 0.25%, and letter of credit fees 2.75%. As of March 26, 2023, the effective interest rate was 8.09%. The 2023 Term Loan will amortize in quarterly installments equaling an aggregate annual amount of $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 March 31, 2024, outstanding borrowings under the 2023 Credit Agreement totaled $324.5 million, comprised of $292.5 million under the 2023 Term Loan, and $32.0 million under the 2023 Revolver Facility. Letters of credit issued under the 2023 Revolver Facility totaled $4.2 million. As a result, as of March 31, 2024, the Company had $63.8 million available under the 2023 Revolver Facility. As of December 31, 2023, outstanding borrowings under the 2023 Credit Agreement totaled $309.4 million, comprised of $294.4 million under the 2023 Term Loan, and $15.0 million under the 2023 Revolver Facility. Letters of credit issued under the 2023 Revolver Facility totaled $4.3 million. As a result, as of December 31, 2023, the Company had $80.7 million available under the 2023 Revolver Facility. 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 into 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. 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, Debt Issuance Costs and Interest Expense 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. The Company amortized an immaterial amount of deferred financing costs during the quarter ended March 31, 2024 and $0.3 million for the quarter ended March 26, 2023, which is included in interest expense in the condensed consolidated statements of operations. In addition, the Company also amortized $0.2 million in original issue discount related to the long-term debt during both the quarters ended March 31, 2024 and March 26, 2023, which is included in interest expense in the condensed consolidated statements of operations. 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 quarter ended March 26, 2023 in the condensed consolidated statement of operations. Total interest expense was $6.5 million and $7.4 million for the quarters ended March 31, 2024 and March 26, 2023, respectively. Fair Value of Debt As of March 31, 2024 and December 31, 2023, 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. Guarantees and Covenants 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). |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 3 Months Ended |
Mar. 31, 2024 | |
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 quarter of 2024, in connection with the secondary offering described in Note 1. Description Of Business, 5,832,371 of LLC Units and corresponding shares of Class B common stock were redeemed by the pre-IPO LLC Members for newly-issued shares of Class A common stock and we received a total of 5,832,371 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: March 31, 2024 December 31, 2023 LLC Units Ownership % LLC Units Ownership % Portillo's Inc. 61,561,592 84.1 % 55,502,375 76.1 % pre-IPO LLC Members 11,640,555 15.9 % 17,472,926 23.9 % Total 73,202,147 100.0 % 72,975,301 100.0 % 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 quarters ended March 31, 2024 and March 26, 2023 was 21.4% and 31.4%, respectively. The following table summarizes the effects of changes in ownership in Portillo's OpCo on the Company’s equity (in thousands): Quarter Ended March 31, 2024 March 26, 2023 Net income (loss) attributable to Portillo's Inc. $ 4,562 $ (514) Activity under equity-based compensation plans 813 711 Non-controlling interest adjustment 46,475 43,736 Redemption of LLC Units (58) (59) Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis (15,913) (12,493) Total effect of changes in ownership interest on equity attributable to Portillo's Inc. $ 35,879 $ 31,381 |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
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 Ending March 31, 2024 March 26, 2023 Labor $ 408 $ 346 General and administrative expenses 2,419 3,191 Total equity-based compensation expense $ 2,827 $ 3,537 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We 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 generally not subject to U.S. federal and state and local income taxes. 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 (Benefit) The effective income tax rate for the quarters ended March 31, 2024 and March 26, 2023 was (27.0)% and 30.5%, respectively. The decrease in our effective income tax rate for the quarter ended March 31, 2024 compared to the quarter ended March 26, 2023 was primarily driven by a decrease in the valuation allowance recorded against a portion of the Company's deferred tax assets as a result of the Q1 2024 Secondary Offering, 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 Portillo's 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 March 31, 2024, 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 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) 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 net earnings (loss) per share for the quarters ended March 31, 2024 and March 26, 2023 are as follows (in thousands, except per share data): Quarter Ended March 31, 2024 March 26, 2023 Net income (loss) $ 5,344 $ (1,273) Net income (loss) attributable to non-controlling interests 782 (759) Net income (loss) attributable to Portillo's Inc. $ 4,562 $ (514) Shares: Weighted-average number of common shares outstanding-basic 57,438 49,599 Dilutive share awards 3,056 — Weighted-average number of common shares outstanding-diluted 60,494 49,599 Basic net income (loss) per share $ 0.08 $ (0.01) Diluted net income (loss) per share $ 0.08 $ (0.01) Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of Portillo's Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented. The following shares were excluded from the calculation of diluted earnings per share because they would be antidilutive (in thousands) : Quarter Ended March 31, 2024 March 26, 2023 Shares subject to performance conditions 1,748 1,807 Shares that were antidilutive 38 3,538 Total shares excluded from diluted net income per share 1,786 5,345 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The 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 | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As of March 31, 2024 and December 31, 2023 the related parties’ receivables balance consisted of $0.4 million and $0.3 million, respectively, due from C&O, which is included in accounts and tenant improvement 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 quarters ended March 31, 2024 and March 26, 2023 (in thousands): Quarter Ended March 31, 2024 March 26, 2023 Food, beverage and packaging costs $ 502 $ 585 Other operating expenses 102 114 Net Olo-related costs $ 604 $ 699 As of March 31, 2024 and December 31, 2023, $0.3 million and $0.4 million, respectively, were payable to Olo and were 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. For the quarters ended March 31, 2024 and March 26, 2023, the Company made TRA payments of $4.4 million relating to tax year 2022 and $0.8 million relating to tax year 2021, respectively. We expect a payment of $7.2 million relating to tax year 2023 to be paid within the next 12 months. (in thousands) March 31, 2024 December 31, 2023 Current portion of Tax Receivable Agreement liability $ 7,191 $ 4,428 Tax receivable agreement liability 321,328 295,390 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 19.3% of the Company as of March 31, 2024. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company opened one new restaurant subsequent to March 31, 2024 in Surprise, Arizona for a total of 85 restaurants, excluding a restaurant owned by C&O, of which Portillo's owns 50% of the equity. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Pay vs Performance Disclosure | ||
Net income (loss) attributable to Portillo's Inc. | $ 4,562 | $ (514) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the quarter ended March 31, 2024, the following officer of the Company amended his "Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K: Name/ Title Type of Plan Original Adoption Date Modification Date Expiration Date Aggregate Number of Securities to be Sold Plan Description Nicholas Scarpino, Chief Marketing Officer 10b5-1 Trading Plan September 7, 2022 March 7, 2024 (a) January 3, 2025 Up to 96,722 Exercise of Options and Sale of Shares (a) |
Non-Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nicholas Scarpino, Adopted September 7, 2022 [Member] | Nicholas Scarpino [Member] | |
Trading Arrangements, by Individual | |
Name | Nicholas Scarpino |
Title | Chief Marketing Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | September 7, 2022 |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | March 7, 2024 |
Arrangement Duration | 304 days |
Nicholas Scarpino, Modified March 7, 2024 [Member] | Nicholas Scarpino [Member] | |
Trading Arrangements, by Individual | |
Name | Nicholas Scarpino |
Title | Chief Marketing Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 7, 2024 |
Arrangement Duration | 302 days |
Aggregate Available | 96,722 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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 31, 2023 . |
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 2024 and 2023 consist of 52 and 53 weeks, respectively. The fiscal periods presented in this report are the quarters ended March 31, 2024 and March 26, 2023, respectively. |
Use of Estimates | Use of Estimates |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If, by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is currently evaluating the effect of adopting this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires public entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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): March 31, 2024 December 31, 2023 Gift card liability $ 5,156 $ 6,981 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 March 31, 2024 March 26, 2023 Revenue recognized from gift card liability balance at the beginning of the year $ 2,070 $ 1,937 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 6,396 $ 6,737 Work in progress 143 157 Finished goods 1,198 912 Consigned inventory 773 927 $ 8,510 $ 8,733 |
PROPERTY & EQUIPMENT, NET (Tabl
PROPERTY & EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): March 31, 2024 December 31, 2023 Land improvements $ 19,353 $ 19,000 Furniture, fixtures, and equipment 158,619 155,871 Leasehold improvements 234,532 227,080 Transportation equipment 2,851 2,881 Construction-in-progress 22,631 16,808 437,986 421,640 Less accumulated depreciation (131,880) (125,847) $ 306,106 $ 295,793 |
GOODWILL & INTANGIBLE ASSETS (T
GOODWILL & INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangibles, Net | Intangible assets, net consisted of the following (in thousands): March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,928) 28,189 $ 280,042 $ (27,928) $ 252,114 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,206) 28,911 $ 280,042 $ (27,206) $ 252,836 |
Schedule of Finite-Lived Intangibles, Net | Intangible assets, net consisted of the following (in thousands): March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,928) 28,189 $ 280,042 $ (27,928) $ 252,114 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 223,925 $ — $ 223,925 Intangible subject to amortization: Recipes 56,117 (27,206) 28,911 $ 280,042 $ (27,206) $ 252,836 |
Schedule of Aggregate Amortization Expense | The estimated aggregate amortization expense related to intangible assets held at March 31, 2024 for the remainder of this year and the succeeding five years and thereafter is as follows (in thousands): Estimated Amortization 2024 (excluding the quarter ending March 31, 2024) $ 2,091 2025 2,707 2026 2,707 2027 2,707 2028 2,707 2029 2,150 2030 and thereafter 13,120 $ 28,189 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Mutual Fund Investments and Deferred Compensation Obligations | As of March 31, 2024 and December 31, 2023, the fair value of the mutual fund investments and deferred compensation obligations were as follows (in thousands): March 31, 2024 December 31, 2023 Level 1 Level 1 Assets - Investments designated for deferred compensation plan Cash/money accounts $ 927 $ 1,083 Mutual funds 2,439 2,181 Total assets $ 3,366 $ 3,264 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Debt consisted of the following (in thousands): March 31, 2024 December 31, 2023 2023 Term Loan $ 292,500 $ 294,375 2023 Revolver Facility 32,000 15,000 Unamortized discount and debt issuance costs (2,761) (2,952) Total debt, net 321,739 306,423 Less: Short-term debt (32,000) (15,000) Less: Current portion of long-term debt (7,500) (7,500) Long-term debt, net $ 282,239 $ 283,923 |
NON-CONTROLLING INTERESTS (Tabl
NON-CONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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: March 31, 2024 December 31, 2023 LLC Units Ownership % LLC Units Ownership % Portillo's Inc. 61,561,592 84.1 % 55,502,375 76.1 % pre-IPO LLC Members 11,640,555 15.9 % 17,472,926 23.9 % Total 73,202,147 100.0 % 72,975,301 100.0 % |
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 March 31, 2024 March 26, 2023 Net income (loss) attributable to Portillo's Inc. $ 4,562 $ (514) Activity under equity-based compensation plans 813 711 Non-controlling interest adjustment 46,475 43,736 Redemption of LLC Units (58) (59) Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis (15,913) (12,493) Total effect of changes in ownership interest on equity attributable to Portillo's Inc. $ 35,879 $ 31,381 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 Ending March 31, 2024 March 26, 2023 Labor $ 408 $ 346 General and administrative expenses 2,419 3,191 Total equity-based compensation expense $ 2,827 $ 3,537 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Computations of Basic and Diluted (Loss) Earnings per Share | The computations of basic and diluted net earnings (loss) per share for the quarters ended March 31, 2024 and March 26, 2023 are as follows (in thousands, except per share data): Quarter Ended March 31, 2024 March 26, 2023 Net income (loss) $ 5,344 $ (1,273) Net income (loss) attributable to non-controlling interests 782 (759) Net income (loss) attributable to Portillo's Inc. $ 4,562 $ (514) Shares: Weighted-average number of common shares outstanding-basic 57,438 49,599 Dilutive share awards 3,056 — Weighted-average number of common shares outstanding-diluted 60,494 49,599 Basic net income (loss) per share $ 0.08 $ (0.01) Diluted net income (loss) per share $ 0.08 $ (0.01) |
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 March 31, 2024 March 26, 2023 Shares subject to performance conditions 1,748 1,807 Shares that were antidilutive 38 3,538 Total shares excluded from diluted net income per share 1,786 5,345 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Company incurred the following Olo-related costs for th e quarters ended March 31, 2024 and March 26, 2023 (in thousands): Quarter Ended March 31, 2024 March 26, 2023 Food, beverage and packaging costs $ 502 $ 585 Other operating expenses 102 114 Net Olo-related costs $ 604 $ 699 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. For the quarters ended March 31, 2024 and March 26, 2023, the Company made TRA payments of $4.4 million relating to tax year 2022 and $0.8 million relating to tax year 2021, respectively. We expect a payment of $7.2 million relating to tax year 2023 to be paid within the next 12 months. (in thousands) March 31, 2024 December 31, 2023 Current portion of Tax Receivable Agreement liability $ 7,191 $ 4,428 Tax receivable agreement liability 321,328 295,390 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 3 Months Ended | |||
Apr. 05, 2023 $ / shares shares | Mar. 31, 2024 food_production_commissary state restaurant $ / shares shares | Mar. 26, 2023 offering $ / shares shares | Dec. 31, 2023 restaurant | |
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 | 84 | 83 | ||
Number of non-traditional locations | restaurant | 2 | 2 | ||
Portillo's Inc. | Portillo's Opco | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership % | 84.10% | 76.10% | ||
Portillo's Inc. | Blocker Companies | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Shares acquired (in shares) | 2,167,629 | |||
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 | ||
Sale of stock, price per share (in usd per share) | $ / shares | $ 21.05 | $ 14.37 | $ 21.05 | |
Number of offerings | offering | 1 | |||
Portillo's Inc. | Over-Allotment Option | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of shares issued in transaction (in shares) | 620,493 | 1,200,000 | ||
Sale of stock, transaction period | 30 days | |||
LLC Units | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Redemption of LLC Interests (in shares) | 5,832,371 | |||
Issuance (in shares) | 5,832,371 | |||
pre-IPO LLC Members | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Redemption of LLC Interests (in shares) | 5,832,371 | |||
pre-IPO LLC Members | Portillo's Opco | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership % | 15.90% | 23.90% | ||
C&O | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 50% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2024 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 | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Revenue from Contract with Customer [Abstract] | ||
Gift card sales that will not be redeemed, percent | 11% | |
Gift card breakage | $ 300 | $ 329 |
REVENUE RECOGNITION - Gift Card
REVENUE RECOGNITION - Gift Card Liability (Details) - Gift Card - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | |
Revenue from External Customer [Line Items] | |||
Gift card liability | $ 5,156 | $ 6,981 | |
Revenue recognized from gift card liability balance at the beginning of the year | $ 2,070 | $ 1,937 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,396 | $ 6,737 |
Work in progress | 143 | 157 |
Finished goods | 1,198 | 912 |
Consigned inventory | 773 | 927 |
Total inventory | $ 8,510 | $ 8,733 |
PROPERTY & EQUIPMENT, NET (Deta
PROPERTY & EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 437,986 | $ 421,640 | |
Less accumulated depreciation | (131,880) | (125,847) | |
Total property and equipment | 306,106 | 295,793 | |
Depreciation expense | 6,200 | $ 5,000 | |
Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 19,353 | 19,000 | |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 158,619 | 155,871 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 234,532 | 227,080 | |
Transportation equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,851 | 2,881 | |
Construction-in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 22,631 | $ 16,808 |
GOODWILL & INTANGIBLE ASSETS -
GOODWILL & INTANGIBLE ASSETS - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) reporting_unit | Mar. 26, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of reporting units | reporting_unit | 1 | |
Amortization expense | $ | $ 0.7 | $ 0.7 |
GOODWILL & INTANGIBLE ASSETS _2
GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 223,925 | $ 223,925 |
Accumulated Amortization | (27,928) | (27,206) |
Intangible subject to amortization, net | 28,189 | |
Gross Carrying Amount | 280,042 | 280,042 |
Net Carrying Amount | 252,114 | 252,836 |
Recipes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible subject to amortization, gross | 56,117 | 56,117 |
Accumulated Amortization | (27,928) | (27,206) |
Intangible subject to amortization, net | $ 28,189 | $ 28,911 |
GOODWILL & INTANGIBLE ASSETS _3
GOODWILL & INTANGIBLE ASSETS - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (excluding the quarter ending March 31, 2024) | $ 2,091 |
2025 | 2,707 |
2026 | 2,707 |
2027 | 2,707 |
2028 | 2,707 |
2029 | 2,150 |
2030 and thereafter | 13,120 |
Intangible subject to amortization, net | $ 28,189 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Asset impairment charges | $ 0 | $ 0 | |
Recurring | Level 1 | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total assets | 3,366,000 | $ 3,264,000 | |
Recurring | Level 1 | Cash/money accounts | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total assets | 927,000 | 1,083,000 | |
Recurring | Level 1 | Mutual funds | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total assets | $ 2,439,000 | $ 2,181,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Unamortized discount and debt issuance costs | $ (2,761) | $ (2,952) |
Total debt, net | 321,739 | 306,423 |
Less: Short-term debt | (32,000) | (15,000) |
Less: Current portion of long-term debt | (7,500) | (7,500) |
Long-term debt, net | 282,239 | 283,923 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
2023 Revolver Facility | 324,500 | 309,400 |
Less: Short-term debt | (32,000) | (15,000) |
Less: Current portion of long-term debt | (7,500) | (7,500) |
Line of Credit | 2023 Term Loan | 2023 Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 292,500 | 294,375 |
2023 Revolver Facility | 292,500 | 294,400 |
Line of Credit | 2023 Term Loan | 2023 Revolver Facility | ||
Debt Instrument [Line Items] | ||
2023 Revolver Facility | 32,000 | 15,000 |
Revolving Credit Facility | 2023 Revolver Facility | ||
Debt Instrument [Line Items] | ||
2023 Revolver Facility | $ 32,000 | $ 15,000 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Feb. 02, 2023 | Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | Dec. 06, 2019 | Aug. 01, 2014 | |
Debt Instrument [Line Items] | ||||||
Amortization of debt issuance costs | $ 0 | $ 300,000 | ||||
Amortization of debt discount | 200,000 | 200,000 | ||||
Loss on debt extinguishment | 0 | 3,465,000 | ||||
Interest cost | $ 6,530,000 | $ 7,444,000 | ||||
Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 0.20% | 0.25% | ||||
Letter of credit fee percentage | 2.50% | 2.75% | ||||
Effective interest rate | 8.37% | 8.09% | ||||
2023 Revolver Facility | $ 324,500,000 | $ 309,400,000 | ||||
Debt issuance costs | $ 3,600,000 | |||||
Loss on debt extinguishment | $ 3,500,000 | |||||
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 | ||||
Payments of debt | $ 321,800,000 | |||||
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 | 7.96% | 7.59% | ||||
Annual amount for first year | $ 7,500,000 | |||||
Annual amount for second year | 7,500,000 | |||||
Annual amount for third year | 15,000,000 | |||||
Annual amount for fourth year | 15,000,000 | |||||
Annual amount for fifth year | 30,000,000 | |||||
2023 Revolver Facility | 292,500,000 | 294,400,000 | ||||
Line of Credit | 2023 Term Loan | 2023 Revolver Facility | ||||||
Debt Instrument [Line Items] | ||||||
2023 Revolver Facility | $ 32,000,000 | 15,000,000 | ||||
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 | Revolving Credit Facility | New Revolver Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate at period end | 7.93% | 7.47% | ||||
Remaining borrowing capacity | $ 63,800,000 | 80,700,000 | ||||
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 | ||||
Line of Credit | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit maximum borrowing capacity | $ 7,500,000 | |||||
Line of Credit | Letter of Credit | New Revolver Facility | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit | $ 4,200,000 | $ 4,300,000 |
NON-CONTROLLING INTERESTS - Nar
NON-CONTROLLING INTERESTS - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Portillo's Opco | ||
Noncontrolling Interest [Line Items] | ||
Weighted average ownership percentage | 21.40% | 31.40% |
LLC Units | ||
Noncontrolling Interest [Line Items] | ||
Redemption of LLC Interests (in shares) | 5,832,371 |
NON-CONTROLLING INTERESTS - Sch
NON-CONTROLLING INTERESTS - Schedule of LLC Interest Ownership by Portillo's Inc. and Pre-IPO LLC Members (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Total | 100% | 100% |
LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 73,202,147 | 72,975,301 |
Portillo's Inc. | Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Ownership % | 84.10% | 76.10% |
Portillo's Inc. | LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 61,561,592 | 55,502,375 |
pre-IPO LLC Members | Portillo's Inc. | ||
Noncontrolling Interest [Line Items] | ||
Ownership % | 15.90% | 23.90% |
pre-IPO LLC Members | LLC Units | ||
Noncontrolling Interest [Line Items] | ||
LLC Interests (in shares) | 11,640,555 | 17,472,926 |
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 | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Noncontrolling Interest [Abstract] | ||
Net income (loss) attributable to Portillo's Inc. | $ 4,562 | $ (514) |
Transfers from (to) non-controlling interests: | ||
Activity under equity-based compensation plans | 813 | 711 |
Non-controlling interest adjustment | 46,475 | 43,736 |
Redemption of LLC Units | (58) | (59) |
Establishment of liabilities under Tax Receivable Agreement and related changes to deferred tax assets associated with increases in tax basis | (15,913) | (12,493) |
Total effect of changes in ownership interest on equity attributable to Portillo's Inc. | $ 35,879 | $ 31,381 |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total equity-based compensation expense | $ 2,827 | $ 3,537 |
Labor | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total equity-based compensation expense | 408 | 346 |
General and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total equity-based compensation expense | $ 2,419 | $ 3,191 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | |
Income Tax Contingency [Line Items] | |||
Effective income tax rate percent | (27.00%) | 30.50% | |
Deferred tax assets from Tax Receivable Agreement | $ 17,800 | ||
Additional tax receivable liability | 33,700 | ||
Tax receivable agreement liability | 328,500 | ||
TRA amounts paid | 4,400 | $ 800 | |
Expected payment | $ 7,191 | $ 4,428 | $ 4,428 |
LLC Units | |||
Income Tax Contingency [Line Items] | |||
Redemption of LLC Interests (in shares) | 5,832,371 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Basic and Diluted (Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 5,344 | $ (1,273) |
Net income (loss) attributable to non-controlling interests | 782 | (759) |
NET INCOME (LOSS) ATTRIBUTABLE TO PORTILLO'S INC. | $ 4,562 | $ (514) |
Shares: | ||
Weighted-average number of common shares outstanding-basic (in shares) | 57,437,782 | 49,599,074 |
Dilutive share awards (in shares) | 3,056,000 | 0 |
Weighted-average number of common shares outstanding-diluted (in shares) | 60,493,958 | 49,599,074 |
Basic net income (loss) per share (in usd per share) | $ 0.08 | $ (0.01) |
Diluted net income (loss) per share (in usd per share) | $ 0.08 | $ (0.01) |
EARNINGS (LOSS) PER SHARE - S_2
EARNINGS (LOSS) PER SHARE - Schedule of Units Excluded from Calculation of Diluted Earnings per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 26, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from diluted net income per share (in shares) | 1,786 | 5,345 |
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) | 1,748 | 1,807 |
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) | 38 | 3,538 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 26, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Food, beverage and packaging costs | $ 56,961 | $ 53,626 | |
Other operating expenses | 19,857 | 18,704 | |
Total restaurant operating expenses | 129,460 | 121,240 | |
Accounts payable | $ 29,323 | $ 33,189 | |
TRA obligation percent | 85% | ||
Current portion of Tax Receivable Agreement liability | $ 7,191 | 4,428 | 4,428 |
TRA amounts paid | 4,400 | 800 | |
Tax receivable agreement liability | $ 321,328 | 295,390 | |
Portillo's Inc. | Berkshire Partners LLC | |||
Related Party Transaction [Line Items] | |||
Ownership % | 19.30% | ||
Related party | |||
Related Party Transaction [Line Items] | |||
Accounts and tenant improvement receivables | $ 400 | 300 | |
Food, beverage and packaging costs | 502 | 585 | |
Other operating expenses | 102 | 114 | |
Total restaurant operating expenses | 604 | $ 699 | |
Accounts payable | $ 300 | $ 400 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - restaurant | 1 Months Ended | ||
May 07, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | |||
Number of restaurants | 84 | 83 | |
C&O | |||
Subsequent Event [Line Items] | |||
Ownership percentage | 50% | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of new restaurants | 1 | ||
Number of restaurants | 85 | ||
Subsequent Event | C&O | |||
Subsequent Event [Line Items] | |||
Ownership percentage | 50% |