Operations

Portillo’s trims portfolio, shrinks prototype as Q3 sales climb

Photo: Portillo's

November 5, 2026

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Illinois-based Portillo's plans to close a group of underperforming restaurants outside Chicagoland and build smaller units going forward, even as the Chicago-style chain posted higher third-quarter sales and raised its full-year profit outlook.

The company expects to close a mid-to-high single-digit number of restaurants, with most closures coming in the fourth quarter, according to its earnings release Thursday. Portillo's weighed each unit's sales, restaurant-level margins and projected performance before making the call. It did not name the locations.

Revenue rose 7% to $194.1 million for the quarter ended Sept. 27, driven mainly by new units. Same-restaurant sales increased 1.4%, as a 2.1% bump in average check, tied to menu price increases, offset a 0.7% drop in transactions. Net income climbed to $4.8 million from $0.8 million a year earlier.

The chain raised its 2026 adjusted EBITDA guidance to $98 million to $101 million, up from $92 million to $96 million, and expects revenue of $768 million to $773 million, including the planned closures.

"While we are encouraged by the progress, one quarter does not establish a trend. We have significant work ahead, and our focus remains on executing consistently and building a foundation for durable profitable growth," Brett Patterson, CEO of Portillo's, said in a company press release.

A plan for growth

Portillo's also introduced a strategic plan built on operational excellence, integrated marketing and disciplined development. Its 2028 prototype will be about 4,600 square feet, more than 40% smaller than its previous average restaurant, on roughly 1.5 acres instead of 3. The company is targeting cash-on-cash returns above 20% for all new restaurants beginning in 2028.

On the operations side, the brand is cutting the number of restaurants each field leader oversees, overhauling hourly and management training, and investing in kitchen technology and equipment to improve order accuracy and speed. A new executive chef will oversee core-menu quality and innovation, and the company is reviewing its Portillo's Perks loyalty program while targeting two millennial audiences identified in brand research.

Long term, Portillo's expects annual same-restaurant sales growth of 2% to 3% and plans to ramp new-unit growth to a high-single-digit percentage within three years.

"Lastly, we evaluated every restaurant in the system and made the decision to close a select group of underperforming locations outside of Chicagoland," Patterson said in the release. "This will improve portfolio quality, strengthen returns on invested capital and reflect our commitment to disciplined growth."

Portillo's started as a hot dog trailer in Chicago and now operates 109 company-owned restaurants, including one owned by a joint venture in which it holds a 50% stake. All seven 2026 openings so far have been in Texas, including a unit at Dallas-Fort Worth International Airport. One more opening is planned for the fourth quarter: the brand's second in-line location, in Chicago.

Operations