PTLO 10-K & 10-Q changes, risk factors and insider trading

If the cost of our ingredients increase, we may suspend or permanently discontinue certain menu items rather than pay the increased cost for the ingredients. These changes to our menu could negatively impact our restaurant traffic and operational results during the shortage and thereafter. Additionally, we may be unable to offset all or even a portion of a future cost increase through menu price increases. Competitive conditions may Portillo's Inc. Form 10-K | 2 limit our menu pricing flexibility and implementing menu price increases may change our guests’ visit frequencies or purchasing patterns. Our industry depends on consumer discretionary spending and is affected by changes in consumer tastes, and macro- and micro-economic conditions (including economic downturns, consumer sentiment, inflation or increased food or energy costs). Factors such as traffic patterns, weather, fuel prices, local demographics, local regulations and the competitive landscape may adversely affect the performances of our individual locations.

Opening and profitably operating new restaurants in existing and new markets is key to our growth. OverWe theremain longfocused term,on wedisciplined aimgrowth toand increasedevelopment, ourbuilding numbernew restaurants designed for strong unit economics, attractive four-wall returns, and efficient capital deployment that will fuel long-term growth. As part of restaurantsthat byprocess, approximately 12% to 15% annually. Wewe may struggle to identify target markets, we may not be able to open our planned new restaurants within budget or on a timely basis, and our new restaurants may not perform as well as anticipated. New restaurant success is affected by several factors, many of which are beyond our control, including our ability to secure enougha sufficient pipeline of appropriate and attractive sites, and to complete construction in a timely and cost-efficient manner.

We may open restaurants in geographic markets where we have little or no prior operating experience. Moreover, consumer recognition of our brand has been important to the success of our existing restaurants, and our concept may have limited appeal in new markets. Restaurants in new markets may take longer to reach expected sales and profit targets and may have higher construction, occupancy and operating costs than existing restaurants. New restaurants in or near markets with existing restaurants could have a material adverse effect on sales at these existing restaurants. Failure on our part to recognize or respond to these challenges may adversely affect the success of new restaurants and could have a material adverse effect on our Results.

Some of our restaurants have higher-than-normal sales volumes during the initial startup period, and our Restaurant-Level Adjusted EBITDA Margins are generally lower in the first 12 months of operation. In new markets, the period before average sales stabilize is less predictable because of our limited knowledge of these markets and consumers’ limited awareness of our brand. In addition, our AUVs and same-restaurant sales may not increase atto the ratessame levels achieved by our existing restaurants have achieved over the past several years. Our ability to operate new restaurants profitably and increase AUVs and same-restaurant sales will depend on many factors, some of which are beyond our control.

As our restaurants mature, they require capital expenditures to remain competitive and maintain our brand standard. If we cannot fund capital expenditures using cash flows from operations, fundswe will need to be borrowedborrow or otherwise obtainedobtain funds or capex investments will be delayed or eliminated, which could make those restaurants less attractive to guests and materially, adversely affect the business.

OurWe incur costs and expend other resources on marketing efforts relyfor heavily on the use of social media. Many of our competitors are expanding their use of social media,new and newseasonal socialmenu mediaitems, platformsadvertising arecampaigns, rapidlyloyalty beingprograms, developed,and potentiallyrestaurant makingdesigns more traditional social media platforms obsolete. We mustand continuously evolve our digital and social media strategies to maintain customer mindshare and brand relevance, particularly given the riseimportance inof the digital focusexperience among customers. We also invest in other marketing initiatives across digitalpaid and organic channels andto help build customer awareness of, engagement with, and loyalty to our brand. These initiatives may not be successful, resulting in expenses incurred without higher sales or increased brand recognition.

IncidentsFood safety concerns and incidents involving food-borne illness and food safety could have an adverse effect.effect on our business.

Food safety is a top priority and we dedicate substantial resources to help ensure that our guests enjoy safe, quality food products. However, food-borne illnesses and other food safety issues have occurred in the past and could occur in the future. Incidents or reports of food-borne or water-borne illness or other food safety issues, food contamination or tampering, team member hygiene and cleanliness failures, improper team member conduct, or guests spreading illness while at our restaurants could lead to product liability or other legal claims. Such incidents or reports could negatively affect our brand and reputation and could have a material adverse effect on our Results.

Other restaurant chains have experienced incidents related to food-borne illness incidents that have had material adverse impacts on their operations, and it’s possible we could suffer a similar impact if one or more of our restaurants were to experience a material food safety incident. Additionally, even if food-borne illnesses are not identified at our restaurants, our restaurant sales could be adversely affected if instances of food-borne illnesses at other restaurant chains wereoccur and are highly publicized.

The restaurant industry is intensely competitive. We compete directly and indirectly with national, regional and local limited-service (e.g., quick serviceQSR or fast casualfast-casual) and full-service restaurants on food quality, brand recognition, service, price and value, convenience, design and location. Some competitors have significantly greater financial, marketing, personnel and other resources, and many are well-established in our target markets. Many of our competitors have greater name recognition locally, regionally, or nationally in these target markets.

Our continued success also depends on the popularity of our menu and overall guest experience. Consumer tastes, nutritional and dietary trends, traffic patterns and the type, number, and location of competing restaurants often affect restaurant performance, and our competitors may react more effectively to changes. In the past, some of our competitors have implemented promotional programs that provideoffer price discounts or reward programs, and they may continue to do so in the future. If we cannot compete effectively, our traffic, restaurant sales and restaurant operating profit margins could decline, which could have a material adverse effect on our Results. If our competitors increase spending on marketing and other initiatives or our marketing expenditures decrease, or our advertising, promotions, and restaurant designs and locations are less effective than those of our competitors, it could have a material adverse effect on our Results.

Our reputation and the perception of our brand are critical to our success. Any incident that erodes our consumer loyalty could significantly damage our business. We may be adversely affected by negative publicity relating to food quality, the safety, sanitation and welfareupkeep of our restaurant facilities, guest complaints or litigation, health inspection scores, integrity of our suppliers’ food processing and other policies, practices and procedures, team member relationships and welfare, employment practices or other matters at one or more of our restaurants. Furthermore, similar negative publicity or occurrences with respect to other restaurants could also decrease our guest traffic and have a similar material adverse effect on our business. In addition, the volume of restaurant commentary has increased dramatically with the proliferation of social media platforms. Negative publicity may adversely affect us or some or all of our restaurants, regardless of whether the allegations are valid, and we may not be able to Portillo's Inc. Form 10-K | 4 respond effectively. For example, we, or other restaurant companies generally, have and could again come under criticism from animal rights and welfare activists in regard to for our business practices or those of our suppliers. We may also face scrutiny and criticism concerning sustainability matters, environmental stewardship, and other social issues. Such criticisms could impair our brand, our restaurant sales, our hiring, and our expansion plans. If we changed our practices because of concerns about animal welfare, or in response to such criticisms, our costs might increase, or we may have to change our suppliers or our menu. A similar risk exists with respect to food service businesses unrelated to us if customers mistakenly associate such unrelated businesses with our operations. Team member claims against us based on, among other things, alleged wage and hour violations, discrimination, harassment or wrongful termination may create not only legal and financial liability but negative publicity that could adversely affect us and divert our financial and management resources from more productive initiatives. A significant increase in the number of these claims or an increase in the number of successful claims could have a material adverse effect on our Results.

The digital and delivery business, and expansion thereof, is uncertain and subject to inherent risk.

We believe digitalthat thoughtful investments toin berestaurant technology, digital engagement and the food delivery experience is a critical differentiator for our business, driving greater and more frequent engagement with new and existing customers. As the digital space continues to evolve, our technology must also evolve to stay competitive. If we do not maintain and innovate competitive digital systems, including our growing use of artificial intelligenceAI in our operations, our digital business and sales may be adversely affected as we lose guests to competitors. We rely on third-parties for our ordering and payment platforms. Services performed by these third-parties have been, and could be in the future, damaged or interrupted by technological issues or cyberattacks, which could negatively impact our sales and harm our reputation.

As availability of food delivery services increase, we understand the importance of meeting our guests’ needs. We have invested in marketing to promote our delivery partnerships, which could negatively impact our profitability if that channel does not continue to expand. We rely on third-parties to fulfill delivery orders in a timely and professional fashion. If these third-party delivery companies cease doing business with us, do not continue their relationship with us on favorable terms, or cannot make their scheduled deliveries (including a shortage of drivers), it may have a negative impact on our sales or revenue. Errors in providing adequate delivery services may result in guest dissatisfaction, which could also result in guest attrition, loss in sales and damage to our brand image. Additionally, as with any third-party handling food, such delivery services increase the risk of food tampering while in transit. We developed and implemented sealed packaging protocols to provide some deterrence against such potential food tampering, but some risk remains.

Third-party food delivery services are competitive. If our delivery partners fail to effectively compete with other third-party delivery providers, our delivery business may suffer, resulting in a loss of sales. If any third-party delivery provider with whom we partner with experiences damage to their brand image, we may also see ramifications due to our partnership with them.

Due to the concentration of our suppliers and distributors (“our vendors”, or "suppliers"), the cancellation, disruption, delay or inability of these suppliers to deliver these products to our restaurants for any reason may materially and adversely affect our operations until we establish an alternative.

We do not control our vendors’ operations and our efforts to monitor their performance may be unsuccessful. If our vendors fail to comply with food safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted and we may not be able to engage replacement suppliers on commercially reasonable terms or on a timely basis, if at all.

If our vendors do not fulfill their contractual obligations or we cannot identify alternative sources, we could encounter supply shortages and incur higher costs, which could have a material adverse effect on our results of operations. We have developed contingency plans to mitigate risks related to secondary supply, floor stocking arrangements, product diversification and inventory management, but therewe cancannot be no assuranceensure that we can obtain commercially reasonable terms or alternative product of equivalent quality.

We depend on our executive officers and certain other key team members,members. Our failure to retain such key personnel or manage the losstransition associated with senior leadership changes, including the recent departure of whomour CEO, and appointment of our new CEO, could have a material adverse effect on our business.

WeFurther, we rely upon the accumulated knowledge, skills and experience of our executive officers and certain other key team members. Our chief executive officer has been with us for more than five years and manyMost of our executive officers including our newly appointed President and Chief Executive Officer, have numerous years of experience in the food service industry. The loss of any of our current executive officers could have a material adverse effect on our Results, as we may be unable to find suitable replacements on a timely basis, without incurring increased costs, or at all. There is a high level of competition for experienced, successful executive personnel in our industry. Our inability to meet our executive staffing requirements could have a material adverse effect on our Results.

We believe that our corporate culture and values have beenare a critical component to our success.success Weand havewe mademust substantialpreserve, investmentsenhance inand leverage our team.brand, including our corporate purpose, mission and values. As we continue to grow, it may be difficult to maintain the innovation, teamwork, passion and focus on execution that are important to our culture. Any failure to preserve our culture could negatively impact our operations, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives. If we cannot maintain our corporate culture as we grow, it could have a material adverse effect on our Results.

Various federal and state labor laws govern our relationships with our team members and affect our operating costs, including the U.S. Occupational Safety and Health Act, which governs worker health and safety, the U.S. Fair Labor Standards Act, which governs such matters as minimum wages and overtime, and a variety of federal, state and local laws that govern employment law matters like employee classifications, unemployment tax rates, workers’ compensation rates, family leave, paid leave, working conditions, safety standards, immigration status, payroll taxes, discrimination, and citizenshiplawful residency requirements. In addition, under the U.S. Patient Protection and Affordable Care Act (“ACA”), we must provide affordable coverage, as defined in the ACA, to eligible team members, or make a payment per team member based on the ACA's affordability criteria. Additionally, some state and local laws mandate certain levels of health benefits by some employers. Significant additional government regulations and new laws, including mandated increases in minimum wages, changes in exempt and non-exempt classification status, worker privacy, paid leave, or increased mandated benefits such as health care and insurance costs could have a material adverse effect on our business, financial condition and results of operations. In addition, changes in federal or state workplace regulations could adversely affect our ability to meet our financial targets.

Federal law requires that we verify that our team members have the proper documentation and authorization to work in the U.S. Although we require all workers to provide us with government-specified documentation evidencing their employment eligibility, some of our team members may, without our knowledge, be unauthorized workers. We currently participate in the “E-Verify” program, an Internet-based, free program run by the U.S. government to verify employment eligibility in states where participation is required. However, use of the “E-Verify” program does not guarantee that we will properly identify all applicants who claim to have work authorization but are ineligible for employment. Unauthorized workers are subject to deportation and we may be subject to fines or penalties if any of our workers are found to be unauthorized. Termination of a significant number of team members who lack valid work authorization may disrupt our operations, cause temporary increases in our labor costs as we train new team members and result in adverse publicity. We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration compliance laws. As a result of such events, we could experience adverse publicity that may negatively impact our brand and may make it more difficult to hire and keepretain qualified team members. These factors could materially adversely affect our Results.

Our business is subject to the risk of litigation by team members, consumers, suppliers, shareholders or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. The outcome of litigation, particularly class action and regulatory actions,matters, is difficult to predict or quantify. In recent years, restaurant companies, including us, have been subject to lawsuits, including class actions, alleging violations of federal and state lawswage regardingand workplacehour regulations and employment conditions, discrimination, immigration statusretaliation and similar matters. Some lawsuits have resulted in substantial damage awards. Similar lawsuitsproceedings have been instituted from time to time alleging violations of various federal and state wage and hour laws regarding, among other things, employee meal deductions, meal and rest periods, overtime eligibility of managers and failure to pay for all hours worked. Whether or not claims against us are valid or whether we are found liable, claims may be expensive to defend anddefend, may divert time and money away from our operations and may result in increases in our insurance premiums. In addition, they may generate negative publicity, which Portillo's Inc. Form 10-K | 6 could reduce guest traffic and sales. Although we believe we maintain adequate levels of insurance, insurance may not be available at all or in sufficient amounts to cover all potential liabilities with respect to these or other matters. A judgment or other liability significantly in excess of our insurance coverage or any adverse publicity resulting from claims could have a material adverse effect on our Results.

Certain of our team members at our commissaries in Addison, IL and Aurora, IL voted on April 13, 20232023, and April 30, 2024, respectively, in favor of being represented by a union. We filed objections to the Addison 2023 election with the National Labor Relations Board ("NLRB") on April 19, 2023, asserting that the promises made by the union and its agent prevented a free and fair election. We are actively pursuing litigation to set aside the election results. We filed an objection to the Aurora 2024 election with the NLRB on May 7, 2024, asserting that the promises made by the union and its agents prevented a free and fair election. Our objections were denied and we filed exceptions to this decision with the NLRB. Although we have not received other petitions to unionize, it is possible that additional team members may seek to be represented by labor unions in the future. If a significant number of our team members were to become unionized and collective bargaining agreement terms were significantly different from our Portillo's Inc. Form 10-K | 6 current compensation arrangements, it could have a material adverse effect on our Results. In addition, a labor dispute involving some or all our team members may harm our reputation, disrupt our operations and reduce our revenues, and resolution of labor disputes could increase our costs. Further, if we enter into a new market with unionized construction companies, or the construction companies in our current markets become unionized, construction and build-out costs for new restaurants in such markets could materially increase.

Our success depends upon our ability to attract, motivate and retain enough qualified team members to meet the needs of our new and existing restaurants. Competition for qualified team members in some areas could require higher wages and greaterenhanced benefits. Our team members are typically paid more than the applicable minimum wage where they work. Increases in federal or state minimum wages, unemployment benefits, higher team member turnover rates, unionization of restaurant workers, or increases in the federally-mandated or state-mandated minimum wage, change in exempt and non-exempt status, or other employee benefits costs (including costs associated with health insurance coverage or workers’ compensation insurance) may also increase wage rates. We invest significant time and money in the qualification and training of our personnel, so failure to retain team members will increase costs without improving our Results. Inability to recruit or retain team members could also delay new restaurant openings, could adversely impact existing restaurants, or result in higher team member turnover in existing restaurants, increasing our labor costs and adversely affecting our Results.

We may be unable to increase our menu prices in order to pass future increased labor costs on to our guests, in which case our operating margins would be negatively affected. If we increase menu prices to cover increased labor costs, the higher prices could adversely affect demand for our menu items, resulting in lower sales.

Many of our restaurant leases are non-cancelable with initial terms of 10 to 20 years and typically provide for renewal options in five-year increments. Generally, our leases also require us to pay our share of the costs of real estate taxes, utilities, building operating expenses, insurance and other charges and may include rent escalations. If we close a restaurant, our lease obligations may remain, requiring, among other things, payment of the rent and other costs through the remainder of the lease term. In addition, as leases expire for restaurants that we continue to operate, we may be unable to negotiate renewals on commercially acceptable terms or at all. As a result, we may need to close or relocate the restaurant, resulting in unanticipated construction costs, the delay or failure by the landlord to timely deliver the new restaurant location to us, and unfavorable commercial, residential or infrastructure development near our new restaurant location, among other costs and risks. Revenues and profit, if any, generated at a relocated restaurant may not equal those generated at the existing restaurant.

We serve alcoholic beverages at most of our restaurants and we may expand service to additional restaurants in the future. Alcoholic beverage control regulations generally require our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for an annual license that may be revoked or suspended for cause at any time. Alcoholic beverage control regulations impact many parts of restaurant operations, including minimum age of team members, advertising, trade practices, wholesale purchasing, inventory control and handling, storage and dispensing of alcoholic beverages and team member training. Failure to comply with these regulations and obtain or retain licenses could have a material adverse effect on our Results.

We are also subject to “dram shop” statutes in certain states, which provide aan personindividual injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance program; however, litigation against restaurant chains has resulted in significant judgments and settlements under these statutes. These cases often seek punitive damages, which may not be covered by insurance, and such litigation could have a material effect on our Results. Regardless of whether any claims against us are valid or whether we are found liable, claims may be expensive to Portillo's Inc. Form 10-K | 7 defend and may divert time and money away from operations, hurting our financial performance. A judgment significantly in excess of our insurance coverage or not covered by insurance could have a material adverse effect on our Results.

Changes to estimates related to our property, fixtures and equipment and definite-lived intangible assets or operating results that are lower than our current estimates at certain restaurant locations may cause us to incur impairment charges or accelerate the amortization on certain long-lived assets, which could have a material adverse impact on our results of operations.Results.

Our Restaurant Support Center, restaurants, and their respective facilities, as well as certain of our vendors and customers, are located in areas that have been and could be subject to natural disasters such as snowstorms, floods, drought, hurricanes, tornadoes, fires or earthquakes. Because our restaurants are concentrated in the Midwestern United States and parts of the “Sunbelt,” adverse weather conditions or changes in weather patterns, including those that may result in electrical and technological failures, may disrupt our business and may adversely affect our sales and operations. Such events could result in physical damage to one or more restaurants, the temporary closure of some or all of our restaurants or our vendors, a workforce shortage, supply chain disruption, or disruption of our technology support or information systems, all of which would increase our costs and disrupt our business. Pandemics, political or social unrest, and acts of war or terrorism in the past, and could in the future, have negative effects on our Results. The events described herein also could have indirect consequences like increased insurance costs if they result in significant loss of property or other insurable damage. Any of these factors, or any combination thereof, could have a material adverse effect on our Results.

The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation, and adversely impact our Results.

Investors, environmental activists, the media and governmental and nongovernmental organizations remain focused on a variety of environmental, social and other sustainability matters, including energy, water, and food and packaging waste management, food safety, nutritional content, labor practices, and supply chain and management food sourcing. We have experienced and may continue to experience pressure to make sustainability-related commitments. If we are not effective in addressing environmental, social and other sustainability matters affecting our industry, or setting and meeting relevant sustainability goals, our brand image may suffer. In addition, we may experience increased costs to achieve our sustainability goals, which could have a material adverse impact on our Results. We may also experience backlash from individuals, organizations and investors who do not support such initiatives, including those who support the enactment of “Anti-ESG” legislation or policies.

Many of our corporate systems and processes and corporate support for our restaurant operations are centralized at one location. We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters, and back up and off-site locations for recovery of electronic and other forms of data and information, and events like the COVID-19 pandemic have provided a limited test of our ability to manage our business remotely. However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recoverydata of data,recovery, an inability to perform vital corporate functions, tardiness in reporting and compliance requirements, a failure to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operationoperations and exposure for administrative and other legal claims. In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting, planning for and protecting against such threats. As a result, our disaster recovery procedures and business continuity plans may not adequately address all threats we face or protect us from resulting losses.

We may not generate sufficient cash flow to repay our indebtedness when due and to meet our other cash needs. If this occurs, we may be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it may negatively affect our Results. If we are unable to pay our debts on time, credit ratings agencies may downgrade our credit rating, which may make it more difficult or expensive to refinance our existing debt or to obtain additional debt or equity financings in the future.

Events beyond our control, including changes in general economic and business conditions, may affect our ability to satisfy certain financial Portillo's Inc. Form 10-K | 8 covenants that apply under our credit agreements and we cannot guarantee that our lenders will waive any failure to satisfy such financial covenants.

Our credit facilities impose, and we anticipate future facilities may impose, limitations on our ability to enter into change of control transactions, the occurrence of which could constitute an event of default. The foregoing factors, as well as the significant common stock ownership by Berkshire, could make acquisition of our Class A common stock less desirable, which, under certain circumstances, could reduce its market value.

Under the Amended LLC Agreement, Portillo’s OpCo will be required from time to time to make pro rata distributions in cash to us and the other holders of LLC Units at certain assumed income tax rates in amounts that are intended to be sufficient to cover the income taxes payable on our and the other LLC Unit holders’ respective allocable shares of the taxable income of Portillo’s OpCo. Given (i) potential differences in taxable income allocable to us and the other LLC Unit holders, (ii) the lower income tax rate applicable to corporations than individuals and (iii) the use of an assumed income tax rate, we may receive tax distributions significantly in excess of our income tax liabilities and obligations to make payments under the Tax Receivable Agreement. Our Board, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, but we will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our shareholders. If we do not distribute such excess cash as dividends or otherwise undertake ameliorative actions, holders of our LLC Units (other than Portillo’s Inc.) may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following a redemption or exchange of their LLC Units, notwithstanding that such holders of our LLC Units (other than Portillo’s Inc.) may previously Portillo's Inc. Form 10-K | 9 have participated as holders of LLC Units in distributions by Portillo’s OpCo that resulted in such excess cash balances at Portillo’s Inc.

We use a 52- or 53-week fiscal year ending on the Sunday on or prior to December 31. In a 52-week fiscal year, each quarterly period is comprised of 13 weeks. The additional week (the "53rd week") in a 53-week fiscal year is added to the fourth quarter. The fiscal yearyears ended December 28, 2025 ("fiscal 2025") and December 29, 2024 ("fiscal 2024") both consisted of 52 weeks and the fiscal year ended December 31, 2023 ("fiscal 2023") consisted of 53 weeks. The 53rd week in fiscal 2023 included Christmas day, resulting in six additional operating days.

OurFinancial fiscalHighlights for Fiscal 2025 vs. Fiscal 2024 financial highlights include:

•AdjustedTotal EBITDA**revenue increased $2.53.0% or $21.5 million to $104.8$732.1 million.million

** Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are non-GAAP measures. Definitions and reconciliations of Adjusted EBITDA to net income (loss) and Restaurant-Level Adjusted EBITDA to operating income, the most directly comparable financial measures presented in accordance with GAAP, are set forth under the section "Key Performance Indicators and Non-GAAP Financial Measures".

In fiscal 2024,2025, total revenue grew 4.5%,3.0%, primarily due to new restaurant openings in 20242025 and 2023.2024. Same-restaurant sales declined 0.5% during fiscal 2025, compared to a decline of 0.6% during fiscal 2024, compared to an increase of 5.7% during fiscal 2023. Fiscal 2023 includes the positive impact of the 53rd week.2024.

In fiscal 2024, we continued to see commodity inflation stabilize versus 2023 levels. Commodity inflation was 3.9% in fiscal 2025 compared to 4.2% in fiscal 2024 compared to 5.5% in fiscal 2023.2024. In fiscal 2024,2025, we experienced aan decreaseincrease of 0.1%0.7% in labor expenses, as a percentage of revenue, compared to fiscal 20232024 primarily due to anlower increasetransactions, inincremental averagewage checkrate increases, deleverage from our newer restaurant openings, and lowerhigher variable-basedbenefit compensation,costs, partially offset by lowerlabor transactionsefficiencies and additionala wagehigher investments.average check.

Revenues for fiscal 20242025 were $710.6$732.1 million compared to $679.9$710.6 million for fiscal 2023,2024, an increase of $30.6$21.5 million or 4.5%.3.0%. The increase in total revenue was primarily attributed to the opening of teneight restaurants during fiscal 20242025 and twelveten restaurants in fiscal 2023, partially offset by a negative impact of $13.9 million due to the additional operating week in fiscal 2023 and a decrease in our same-restaurant sales.2024. This increase in revenues was partially offset by a same-restaurant sales decrease of 0.6%,0.5%, or $3.4$2.9 million. The same-restaurant sales decline was attributable to a 3.2%2.5% decrease in transactions, partially offset by an increase in average check of 2.6%.2.0%. The higher average check was primarily driven by an approximate 4.6%3.2% increase in menu pricesprices, partially offset by a 1.2% decrease in product mix. To mitigate inflationary cost pressures, we implemented targeted menu price adjustments in 2024,2025, including a 1.5% increase in January,January another 1.5% increase at the end of March, and2025, a 1.0% increase in June.April 2025, and a 0.7% increase in June 2025. Restaurants not in our Comparable Restaurant Base contributed $48.8$27.4 million of the total year-over-year increase. For the purpose of calculating same-restaurant sales asfor ofthe year ended December 29,28, 2024,2025, sales for 7180 restaurants were included in the Comparable Portillo's Inc. Form 10-K | 24 Restaurant Base (as defined in "Key Performance Indicators and Non-GAAP Financial Measures" below) as of the end of fiscal 2024..

(31) Total restaurants indicated are as of December 29,28, 2024. Revenue from fiscal 2022 reflects contributions from restaurants before they were added to the comparable store base.2025. Excludes a restaurant that is owned by C&O of which Portillo’sPortillo's owns 50% of the equity.

Food, beverage and packaging costs for fiscal 20242025 waswere $241.7$251.7 million compared to $230.9$241.7 million for fiscal 2023,2024, an increase of $10.8$10.0 million or 4.7%.4.1%. This increase was primarily driven by a 3.9% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and the opening of ten restaurants in fiscal 2024 and the opening of twelve restaurants in fiscal 2023 and a 4.2% increase in commodity prices, partially offset by lower third-party delivery commissions.2024. As a percentage of revenues, net, food, beverage and packaging costs remainedincreased flat0.4% during fiscal 20242025. asThe theincrease was primarily due to an increase in averagecertain checkcommodity andprices, lower third-party delivery commissions werepartially offset by an increase in certainaverage commodity prices.check.

Labor expenses for fiscal 20242025 were $181.1$191.7 million compared to $173.9$181.1 million for fiscal 2023,2024, an increase of $7.2$10.6 million or 4.2%.5.9%. This increase was primarily driven by the opening of teneight restaurants in fiscal 20242025 and the opening of twelveten restaurants in fiscal 2023, and2024, incremental investments to support our team members, includingand annualan rateincrease increases,in partiallybenefit offset by lower variable-based compensation.expenses. As a percentage of revenues, net, labor decreasedincreased 0.1%0.7% during fiscal 20242025 primarily due to lower transactions, incremental wage increases, and higher benefit costs, partially offset by labor efficiencies and an increase in our average check and lower variable-based compensation, partially offset by the lower transactions and the aforementioned wage rate increases.check.

Occupancy expenses for fiscal 20242025 were $36.6$40.6 million compared to $33.4$36.6 million for fiscal 2023,2024, an increase of $3.3$4.0 million or 9.8%,10.9%, primarily driven by the opening of eight restaurants in fiscal 2025 and the opening of ten restaurants in fiscal 2024 and the opening of twelve restaurants in 2023.2024. As a percentage of revenues, occupancy expenses increased 0.2%0.4% during fiscal 2024.2025 primarily due to lower transactions.

Other operating expenses for fiscal 20242025 were $83.0$89.6 million compared to $76.6$83.0 million for fiscal 2023,2024, an increase of $6.4$6.6 million or 8.3%,7.9%, Portillo's Inc. Form 10-K | 25 primarily due to the opening of eight restaurants in fiscal 2025 and the opening of ten restaurants in fiscal 2024 and the opening of twelve restaurants in 2023 and an increase in utilities, repair and maintenance expenses, IT expenses, and utilities,advertising expense, partially offset by a decrease in operatingcleaning suppliesexpenses anddue advertisingto expenses.vendor renegotiation. As a percentage of revenues, net, operating expenses increased 0.4%.0.6% primarily due to the aforementioned increases in expenses and lower transactions, partially offset by an increase in our average check.

General and administrative expenses for fiscal 20242025 were $75.1$77.1 million compared to $78.8$75.1 million for fiscal 2023,2024, aan decreaseincrease of $3.7$2.1 million or 4.8%.2.7%. This decrease was primarily driven by lower$5.1 equitymillion andof variable-baseddead compensationsite and insurance expenses, partially offset bycosts, an increase in advertising expenses driven by the Chicagoland ad campaign,wages and benefits, higher professional feesfees, andhigher software licenselicensing fees related to our enterprise resource planning ("ERP") and human capital management ("HCM") system implementations.implementations, and higher advertising expenses, partially offset by lower equity- and variable-based compensation.

Pre-opening expenses consist primarily of wages, occupancy expenses, which represent rent expense recognized during the period between the date of possession of the restaurant facility and the restaurant opening date, travel for the opening team and other supporting team members, food, beverage, and the initial stocking of operating supplies.supplies and legal fees. All such costs incurred prior to the opening are expensed in the period in which the expense was incurred. Pre-opening expenses can fluctuate significantly from period to period, based on the number and timing of openings and the specific pre-opening expenses incurred for each restaurant. Additionally, restaurant openings in new geographic market areas will experience higher pre-opening expenses than our established geographic market areas, such as the Chicagoland area, where we have greater economies of scale and incur lower travel and lodging costs for our training team.

Pre-opening expenses for fiscal 20242025 were $9.2$8.8 million compared to $9.0$9.2 million for fiscal 2023,2024, ana increasedecrease of $0.2$0.4 million or 2.4%.4.7%. This increasedecrease was due to the number, timing and location of executed and planned new restaurant openings for fiscal 20242025 as compared to fiscal 2023.2024.

Depreciation and amortization expenses consist of the depreciation of fixed assets, including leaseholdland improvements, buildings and improvements, fixtures and equipmentequipment, leasehold improvements, and the amortization of definite-lived intangible assets, which are primarily comprised of recipes.

Depreciation and amortization expense for fiscal 20242025 was $27.3$29.1 million compared to $24.3$27.3 million for fiscal 2023,2024, an increase of $3.0$1.8 million or 12.3%.6.6%. This increase was primarily attributable to incremental depreciation of capital expenditures related to the opening of teneight restaurants in fiscal 20242025 and the opening of twelveten restaurants in fiscal 2023.2024, partially offset by a reduction in depreciation expense due to fully depreciated assets and disposals compared to the prior year period.

Net income attributable to equity method investment for fiscal 20242025 was $1.2$1.3 million compared to $1.4$1.2 million for fiscal 2023,2024, aan decreaseincrease of $0.2$0.05 million or 12.3%.3.7%. This decreaseincrease was primarily driven by animproved increaseleverage inof restaurant-levellabor and operating expenses, partially offset by an increase in sales.expenses.

Other Income,Loss (Income), Net

Other income,loss (income), net includes, among other items, income resulting from discounts received for timely filing of sales tax returns, management fee income associated with our investment in C&O, trading gains or losses on our deferred compensation plan and gains, losses on asset disposals, and asset impairment charges.charges, and income resulting from discounts Portillo's Inc. Form 10-K | 26 received for timely filing of sales tax returns.

Other income,loss (income), net for fiscal 20242025 was $0.3a loss of $0.9 million compared to $1.0income of $0.3 million for fiscal 2023,2024, a decrease of $0.7$1.3 million or 69.9%.403.2%. OtherThis income,decrease net decreasedwas primarily dueattributable to a legacy Barnelli's trade name impairment charge of $2.2 million, partially offset by an increase in trading gains in the rabbi trust used to fund our deferred compensation plan and a technology asset impairment charge.charge in fiscal 2024.

Interest expense for fiscal 20242025 was $25.6$22.8 million compared to $27.5$25.6 million for fiscal 2023,2024, a decrease of $1.9$2.8 million or 6.7%.11.0%. This decrease was primarily driven by a lower effective interest rate dueattributable to the improved lending terms associated with our 20232025 TermCredit LoanAgreement andamendment, 2023partially offset by additional interest expense in connection with increased borrowings under our 2025 Revolver Facility.

The Tax Receivable Agreement liability adjustment was $9.1$2.9 million for the fiscal year ended December 29, 20242025 related primarily to a remeasurement primarily due to activity under equity-based compensation plans and effective state tax rate changes. The Tax Receivable Agreement liability adjustment was $3.3$9.1 million for the fiscal year ended December 31, 2023.2024.

Income tax expense for fiscal 20242025 was $6.8$3.0 million compared to $3.2$6.8 million for fiscal 2023,2024, ana increasedecrease of $3.6$3.8 million or 109.3%.55.9%. Our effective income tax rate for fiscal 20242025 was 16.2%,12.4%, compared to 11.5%16.2% for fiscal 2023.2024. The increasedecrease in our effective income tax rate for fiscal 20242025 compared to fiscal 20232024 was primarily driven by a decrease in the valuation allowance related to the separation of Mr. Osanloo and year-over-year impact of deferred tax asset remeasurement due to effective state tax rate changes, partially offset by an increase in the Company's ownership interest in Portillo's OpCo, which increases its Portillo's Inc. Form 10-K | 27 share of taxable income (loss) of Portillo's OpCo, remeasurement of deferred tax assets due to effective state tax rate changes and recording of net operating losses in the prior year. This was partially offset by the decrease in the valuation allowance and the exercise and vesting of equity-based awards.OpCo.

Net income attributable to non-controlling interests for fiscal 20242025 was $5.6$1.7 million, compared to $6.4$5.6 million for fiscal 2023.2024. The decrease in net Portillo's Inc. Form 10-K | 27 income attributable to non-controlling interests for fiscal 20242025 was primarily due to a decrease in net income and a decrease in the non-controllingpre-IPO interestLLC holders'Members' weighted average ownership fromto 25.9%8.3% for fiscal 20232025 tofrom 17.0% for fiscal 2024, partially offset by an increase in net income for fiscal 2024 compared to fiscal 2023. The weighted average ownership percentage decreased due to the Secondary Offering and Redemption of LLC units as discussed in Note 1. Description Of Business of our consolidated financial statements.2024.

(a) Includes C&O, as described in Note 2. Summary Of Significant Accounting Policies in our consolidated financial statements. Total restaurants indicated are as of a point in time. AUV for fiscal 2024 and fiscal 2023 consist of 52 weeks and 53 weeks, respectively.

As of MarchJune 29,28, 2026, we owned and operated 106109 Portillo’s restaurants across eleven11 states, including a restaurant owned by C&O Chicago, L.L.C. ("C&O") of which Portillo’s owns 50% of the equity.

In the quarter and two quarters ended MarchJune 29,28, 2026, total revenue grew 3.5%5.6% or $6.2$10.5 million and 4.6% or $16.7 million, respectively, primarily due to new restaurant openings in 2025 and 2026, partially offset by a decline in same-restaurant sales. Same-restaurant sales declined 0.1%1.2% during the quarter ended MarchJune 29,28, 2026, compared to a 1.8%0.7% increase during the quarter ended MarchJune 30,29, 2025. Same-restaurant sales declined 0.7% during the two quarters ended June 28, 2026, compared to a 1.2% increase during the two quarters ended June 29, 2025. Refer to "Selected Operating Data" section below for definition of Same-Restaurant Sales.

In the quarter and two quarters ended MarchJune 29,28, 2026, commodity inflation was 1.8%,7.0% and 4.5%, respectively, compared to 3.4%1.9% and 2.6% for the quarter and two quarters ended MarchJune 30,29, 2025. Labor, as a percentage of revenue, netnet, remained flat and increased 0.3%0.2% during the quarter and two quarters ended MarchJune 29,28, 2026, respectively, compared to the quarter and two quarters ended MarchJune 30,29, 2025,2025. The increase in labor as a percentage of revenue for the two quarters ended June 28, 2026 was primarily duedriven toby higherrevenue benefitdeleverage costs,from new restaurants and incremental wage rate increases and deleverage from our newer restaurant openings,increases, partially offset by labor efficiencies. We increased certain menu prices by approximately 2.0% in April 2026.

During the quarter ended MarchJune 29,28, 2026, we opened fourthree restaurants.restaurants Subsequentfor to March 29, 2026, we opened one additional restaurant, bringing oura total restaurant count to 107, as of the109 filing of this Quarterly Report on Form 10-Q,restaurants, including a restaurant owned by C&O, of which Portillo’s owns 50% of the equity. We plan to open threeone additional restaurantsrestaurant in the remainderfourth quarter of fiscal 2026, includingwhich ourwill first airport location at Dallas–Fort Worth International Airport andbe our second in-line location whichand will be located in Chicago.Chicago, Illinois.

The following table summarizes our results of operations for the quarter and two quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 (in thousands):

Revenues for the quarter ended MarchJune 29,28, 2026 were $182.6$199.0 million compared to $176.4$188.5 million for the quarter ended MarchJune 30,29, 2025, an increase of $6.2$10.5 million or 3.5%.5.6%. The increase in revenues was primarily attributed to the opening of eight restaurants in fiscal 2025 and fourseven restaurants during the quartertwo quarters ended MarchJune 29,28, 2026, partially offset by a decrease in our same-restaurant sales. Restaurants not in our Comparable Restaurant Base (as defined in "Selected Operating Data" below) contributed $7.7$13.3 million of the total year-over-year increase. Same-restaurant sales decreased 0.1%,1.2%, or $0.2$2.2 million in the quarter. The same-restaurant sales decline was attributable to a decrease in average checktransactions of 0.9%,3.4%, partially offset by an increase in transactionsaverage check of 0.8%.2.2%. The lowerhigher average check was driven by an approximate 1.0% decrease in product mix, partially offset by a 0.1%2.6% increase in certain menu prices, netpartially ofoffset promotionalby offers.a 0.4% decrease in product mix. We increased select menu prices by approximately 2.0% in April 2026. For the purpose of calculating same-restaurant sales for the quarter ended MarchJune 29,28, 2026, sales for 8385 restaurants that were open for at least 24 full fiscal periods were included in the Comparable Restaurant Base.

The following table summarizes the Company's revenue for the quarter ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 (in thousands):

(1) Total restaurants indicated are as of MarchJune 29,28, 2026. Excludes a restaurant that is owned by C&O of which Portillo’s owns 50% of the equity.

Food, beverage and packaging costs for the quarter ended MarchJune 29,28, 2026 were $63.3$69.6 million compared to $61.1$63.8 million for the quarter ended MarchJune 30,29, 2025, an increase of $2.2$5.8 million or 3.6%.9.1%. This increase was primarily driven by a 1.8%7.0% increase in commodity prices and the opening of eight restaurants in fiscal 2025 and fourseven restaurants during the quartertwo quarters ended MarchJune 29,28, 2026. As a percentage of revenues, net, food, beverage and packaging costs increased 0.1%1.2% during the quarter ended MarchJune 29,28, 2026. The increase was primarily due to an increase in certain commodity prices, partially offset by an increase in certainaverage menu prices, net of promotional offers.check.

Labor expenses include hourly and management wages, bonuses and equity-based compensation, payroll taxes, workers’ compensation expense, and team member benefits. Factors that influence labor costs include wage inflation and payroll tax and minimum wage legislation, health care costs and the staffing needs of our restaurants.

Labor expenses for the quarter ended MarchJune 29,28, 2026 were $49.2$51.1 million compared to $46.9$48.3 million for the quarter ended MarchJune 30,29, 2025, an increase of $2.3$2.8 million or 5.0%.5.7%. This increase was primarily driven by the opening of eight restaurants in fiscal 2025 and fourseven restaurants during the quartertwo quarters ended MarchJune 29,28, 2026, and incremental investments to support our team members. As a percentage of revenues, net, labor increasedwas 0.3%flat during the quarter ended MarchJune 29,28, 2026. The increase was primarily due to deleverage from our newer restaurant openings, higher benefit costs, and incremental wage rate increases, partially offset by labor efficiencies.

Occupancy expenses for the quarter ended MarchJune 29,28, 2026 were $11.2$11.7 million compared to $10.0 million for the quarter ended MarchJune 30,29, 2025, an increase of $1.2$1.7 million or 11.6%,17.3%, primarily driven by the opening of eight restaurants in fiscal 2025 and fourseven restaurants during the quartertwo quarters ended MarchJune 29,28, 2026. As a percentage of revenues, net, occupancy expenses increased 0.4%0.6% primarily driven by higher occupancy costs and revenue deleverage at new restaurants.

Other operating expenses for the quarter ended MarchJune 29,28, 2026 were $24.1$23.3 million compared to $21.8$21.9 million for the quarter ended MarchJune 30, Portillo's Inc. Form 10-Q | 2329, 2025, an increase of $2.3$1.4 million or 10.7%,6.5%, primarily due to the opening of eight restaurants in fiscal 2025 and fourseven restaurants during the quartertwo quarters ended MarchJune 29,28, 2026, and an increase in repairs and maintenance, operating supplies and insurance expense partially offset by lower cleaningutilities expenses.and insurance costs. As a percentage of revenues, net, other operating expenses increased 0.8%0.1% primarily due to the aforementioned increases in expenses and revenue deleverage at new restaurants.

General and administrative expenses for the quarter ended MarchJune 29,28, 2026 were $20.4$19.6 million compared to $18.9$18.8 million for the quarter ended MarchJune 30,29, 2025, an increase of $1.5$0.8 million or 7.7%.4.1%. This increase was primarily driven by higher equity‑based compensation and an increase in advertising and professional fees, including $0.5$0.9 million of dead site costs.costs, Theand increaseincreased wassoftware licensing fees. These increases were partially offset by lower vacation-related wage expense, software licensing and legal expenses.