Portillo’s expanded its restaurant base to 109 locations from 94 a year earlier, as new-unit openings became the primary driver of Q2 2026 revenue growth, helping the company increase sales even as comparable restaurant sales and customer transactions declined.
Revenue increased 5.6% to $199 million from $188.5 million, representing a year-over-year increase of approximately $10.5 million. Portillo’s attributed the growth primarily to eight restaurants opened during fiscal 2025 and seven restaurants opened during the first two quarters of fiscal 2026.
Restaurants outside the company’s Comparable Restaurant Base contributed approximately $13.3 million of incremental revenue, which was greater than Portillo’s total $10.5 million year-over-year revenue increase. That means growth from newer locations more than offset weaker sales across established restaurants and other factors affecting the comparison.
Portillo’s opened three restaurants during Q2, bringing its total restaurant count to 109 as of the earnings release. The restaurant base increased approximately 16% from 94 locations in the prior-year period.
All seven restaurants opened during the first half were in Texas. Portillo’s opened locations in Fort Worth, Humble, Dallas and El Paso during Q1, followed by restaurants in Frisco and Schertz during Q2 and its first airport location at Dallas-Fort Worth International Airport in May.
The DFW opening also gives Portillo’s another restaurant format as it evaluates ways to expand beyond its traditional large-format locations. The airport restaurant uses a smaller kitchen footprint and equipment enhancements, while the company plans to open its second inline restaurant in downtown Chicago later in 2026 and its first Wrigleyville location in 2027.
Growth from new restaurants offset weaker comparable-store trends during Q2. Same-restaurant sales declined 1.2%, or approximately $2.2 million, as transactions decreased 3.4%. The decline in traffic was partially offset by a 2.2% increase in average check.
Average check benefited from approximately 2.6% menu-price inflation, partially offset by a 0.4% unfavorable shift in product mix. Portillo’s also implemented an additional selective menu-price increase of approximately 2% in April to address inflationary cost pressures.
The expansion strategy is creating cost pressure while the restaurant base scales. Restaurant operating expenses increased 8.1% to $155.7 million from $144 million, outpacing the company’s 5.6% revenue growth. Commodity prices increased 7% year-over-year, while costs were also affected by the larger restaurant base and investments in employees.
Restaurant-Level Adjusted EBITDA declined 2.8% to $43.2 million from $44.5 million, while Adjusted EBITDA decreased 0.8% to $29.8 million from $30.1 million. Adjusted EBITDA margin declined to 15% from 16%.
Net income declined 28.8% to $7.2 million from $10 million, while operating income decreased 21.4% to $13.8 million from $17.5 million as higher revenue was more than offset by increased expenses and a $1.4 million increase in other loss associated with a legal contingency.
Portillo’s still expects to open eight new units during fiscal 2026, meaning one additional restaurant is planned for the remainder of the year. That location is expected to be the company’s second inline restaurant and will be located in Chicago.
The company continues to target fiscal 2026 Restaurant-Level Adjusted EBITDA margin of 19.5% to 20.5%, Adjusted EBITDA of $92 million to $96 million and capital expenditures of $55 million to $60 million.
Portillo’s also took steps after quarter-end to simplify its corporate cost structure. On July 31, the company reduced its active corporate headquarters workforce by approximately 18%, along with a limited number of field-management positions. No restaurant-level employees were affected.
The Q2 results show the increasingly important role restaurant development plays in Portillo’s growth strategy. New locations allowed total revenue to rise despite falling comparable sales and transactions, making the economics and maturation of the company’s expanding restaurant base an increasingly important factor in future revenue and margin performance.
KEY QUOTES:
“Q2 was highlighted by resilient underlying sales performance despite difficult promotional comparisons, as well as taking decisive actions to simplify the business to better support our priority of running great restaurants.”
“In parallel, we finalized our recent brand and consumer research which is helping to shape our long-term strategy focused on sustainable, profitable growth. We look forward to sharing that roadmap soon.”
Brett Patterson, Chief Executive Officer of Portillo’s
“While never an easy decision, it is imperative that we examine areas of the business where we can operate more efficiently and ensure our resources and future investments are directed at the right priorities. These actions, along with other efficiencies, will support our long-term growth strategy.”
Brett Patterson, Chief Executive Officer of Portillo’s
