Portillo’s expects to open only eight new units this year, compared to the 12 openings it had estimated earlier.
Portillo’s (PTLO) shares slid nearly 5% in early trading on Wednesday after the company reduced its forecast on new restaurant openings for the fiscal year 2025 and stated it expects a drop in same-store sales.
The restaurant chain expects to open only eight new units this year, compared to the 12 openings it had estimated earlier. Portillo’s also forecast annual same-store sales to decline between 1% and 1.5%, compared with the prior expectation of a 1% to 3% rise.
The firm stated that for fiscal 2026, it expects to open eight restaurants, which includes the company’s first airport location, and the net build cost average for these eight restaurants is projected to be less than $5 million.
Retail sentiment on Portillo’s remained unchanged in the ‘bullish’ territory, with message volumes at ‘high’ levels, according to data from Stocktwits.
Portillo’s CEO Michael Osanloo said that the company has announced a slew of initiatives to align with its efforts to drive sustainable traffic and grow unit economics. The measures include simplifying operations, including the discontinuation of its Chicago breakfast pilot, and sharpening its focus with a more measured pace of new restaurant growth.
Brokerage Stephens noted that Portillo’s has framed FY25 as a reset year, marked by “this morning’s guidance cut” and Tuesday’s appointment of a new CMO, according to TheFly.
The firm argued that the company will require “a string of upside surprises” to renew investor confidence and drive a higher share price. Stephens has an ‘Equal Weight’ rating and $10 price target on Portillo’s shares.
A user on Stocktwits noted that they are looking for a re-entry if an opportunity arises on Portillo’s.
Shares of Portillo’s have declined 34% this year and have lost nearly half of their value in the last 12 months.
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