Casual restaurant chain Portillo’s (NASDAQ: PTLO) missed Wall Street’s revenue expectations in Q3 CY2025 as sales only rose 1.8% year on year to $181.4 million. Its GAAP profit of $0.02 per share was $0.02 below analysts’ consensus estimates.

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“Portillo’s took a number of steps to reset our growth model in the third quarter, as we proceed at a more measured pace in new markets while pursuing better unit economics,” said Mike Miles, Chairman of the Board and Interim President and Chief Executive Officer of Portillo’s.

Company Overview

Begun as a Chicago hot dog stand in 1963, Portillo’s (NASDAQ: PTLO) is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $730.9 million in revenue over the past 12 months, Portillo's is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the bright side, it can grow faster because it has more white space to build new restaurants.

As you can see below, Portillo’s sales grew at a decent 7.5% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new restaurants and expanded its reach.

This quarter, Portillo’s revenue grew by 1.8% year on year to $181.4 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.2% over the next 12 months, similar to its six-year rate. This projection is above average for the sector and implies its newer menu offerings will help maintain its historical top-line performance.

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Restaurant Performance

Number of Restaurants

The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.

Portillo's sported 98 locations in the latest quarter. Over the last two years, it has opened new restaurants at a rapid clip by averaging 12.4% annual growth, among the fastest in the restaurant sector. This gives it a chance to scale into a mid-sized business over time.

When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.

Same-Store Sales

The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Portillo’s demand within its existing dining locations has barely increased over the last two years as its same-store sales were flat. Portillo's should consider improving its foot traffic and efficiency before expanding its restaurant base.

In the latest quarter, Portillo’s year on year same-store sales were flat. This performance was more or less in line with its historical levels.

Key Takeaways from Portillo’s Q3 Results

It was good to see Portillo's narrowly top analysts’ same-store sales expectations this quarter. On the other hand, its EPS was in line and its EBITDA fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.5% to $5.17 immediately after reporting.

Portillo's didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.