The food industry is witnessing a rebound as people revert to their earlier habits of eating out. Street food has always been popular among those who are looking for a quick meal. Portillo’s Inc., a restaurant chain offering Chicago street food, is making its market debut next week. Here’s what to know about this IPO:
IPO details
Portillo’s Inc. is scheduled to go public on Thursday, October 21. The company will begin trading on NASDAQ under the ticker symbol PTLO. It will offer 20.3 million shares at a price range of $17 to $20 to raise $375 million. The IPO will be managed by a group of underwriters led by Jefferies and Morgan Stanley.
Company intro
Portillo’s Inc. serves Chicago street food through its multi-channel restaurants. As of June 27, 2021, the company owned and operated 67 locations across nine states. Its menu features Chicago-style hot dogs and sausages, burgers, homemade chocolate cake, among others.
Nearly all the company’s restaurants have double lane/drive-thrus and allow various modes of service such as dine-in, carryout/curbside, delivery and catering. Each Portillo’s location on average served approx. 800,000 guests in 2020 and approx. 825,000 guests in the 12 months ended June 27, 2021.
Financials
Portillo’s generated total revenue of $455 million in 2020 compared to revenue of $479 million in 2019. Net income in 2020 rose to $12 million from $6 million in 2019. Drive-thru sales amounted to $4.6 million and dine-in sales totaled $1.9 million in 2020. Delivery sales in 2020 were $800,000.
Portillo’s revenues for the third quarter ended September 26, 2021 are expected to be approx. $138 million, up around 15% from the third quarter ended September 27, 2020. This growth is mainly attributable to an increase in average check and new restaurant openings.
Same-restaurant sales are expected to increase approx. 6.8% during the third quarter ended September 26, 2021. Net income for the third quarter ended September 26, 2021 is expected to be between $5.5 million and $6.5 million, which is down approx. 26% from the third quarter ended September 27, 2020.
Growth strategy
From November 2020 through the end of 2021, Portillo’s is targeting seven new restaurant openings. These include new locations in Illinois, Michigan, Florida and Arizona. Over the long term, the company plans to increase the number of its restaurants by around 10% annually. Based on data from Forum Analytics, the company believes it has a long-term opportunity to grow to more than 600 restaurants domestically over the next 25 years.