Chicago-Style IPO Seeks Big Expansion With Earnings Due

Portillo’s (PTLO), a restaurant chain serving Chicago street food, reports third-quarter earnings on Thursday — the company’s first since its trading debut last month. Portillo’s stock was up on Wednesday.


The Illinois-based chain reports in the wake of other restaurant IPOs this year, and as it tries to expand beyond the Midwest after building a loyal following in the Chicago region.

Portillo’s Earnings

Estimates: Wall Street expects Portillo’s earnings to come in at nine cents per share, on revenue of $138 million, according to FactSet. Same-store sales were seen up 6.8%.

Results: Due before the market open on Thursday.

Portillo’s Stock

Portillo’s stock reversed from a gain of as much as 8% to a modest loss before closing up 2.2% to 54.22 in the stock market today. Shares began trading on Oct. 21.

The stock has an 83 Composite Rating. Its EPS Rating is 68.

The IPO for Portillo’s stock follows the recent debuts of doughnut chain Krispy Kreme (DNUT) and coffee chain Dutch Bros (BROS). Dutch Bros this month reported third-quarter earnings that beat estimates.

Dutch Bros fell 6.1% on Wednesday. Krispy Kreme added 3%.

McDonald’s (MCD) edged up 0.1% at 252.69. Shares were in range of a 247.15 flat-base buy point. Starbucks (SBUX) was up 0.3%. Domino’s Pizza (DPZ) rose 1.2%.

600 Locations?

Portillo’s, known for its Italian beef sandwiches, sausages and burgers, reports as restaurants deal with rising food costs, particularly for meat. Pandemic disruptions to the supply chain, thin staffing and rising prices for livestock feed have driven those costs higher.

Founded in 1963, Portillo’s runs 67 locations across nine states. Most are in the Midwest and the Chicago area. The company believes it can stretch that domestic restaurant count to more than 600 over the next 25 years.

For now, though, it will be expanding into a restaurant landscape in which the industry has struggled to attract and keep workers, and where digital ordering, drive-thru and delivery have become more important after last year’s Covid-related restaurant restrictions.

“Key risks include geographic portability outside the Midwest, Portillo’s high concentration of locations in Illinois, and likely restaurant-level margin contraction as the company expands throughout the United States,” William Blair analyst Sharon Zackfia said this week in initiating coverage on Portillo’s stock.

Most of Portillo’s restaurants were built with double-lane drive-thrus, and were “designed with a layout that accommodates a variety of access modes including dine-in, carryout/curbside, delivery and catering,” the company said in its IPO prospectus.

Portillo’s brought in sales of $455.5 million last year, down 5% from 2019. Sales for the first half of this year rose 19% to $258 million.


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