Portillo's (PTLO) 7 May 222022 Q1 Earnings call transcript

Hello, and thank you for standing by. Welcome to Portillo's Fiscal First Quarter 2022 Conference Call and Webcast. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Barbara Noverini, Director of Investor Relations at Portillo's, to begin.

Thank you, operator. welcome is fiscal as also Director Investor and earnings quarter Portillo's everyone, of which call, my Relations. morning, to first our XXXX new Good first call both with what about with you. analysts working learning resonates to forward future and looking and I'm shareholders current and more our With the Officer. is call Michael Chief President and Financial me Officer; company's and Chief on Executive Michelle today Osanloo, Hook, the everyone begin our include formal that remind part we me will of before And forward-looking let statements. discussion today's remarks, and performance future not of guarantees not are statements relied unduly should upon. These be We required financial do that risks and detailed you condition. earnings undertake statements not more to update and the release by to could forward-looking these impact press our unless for of refer SEC Portillo's filings law future and discussions results today's operating

most also our adjusted financial comparable alternative to this reconciliations to or adjusted for remarks an financial or net our our such include level restaurant you as measure other on not measures as operating of as issued of GAAP income should earnings non-GAAP We release and available performance. GAAP non-GAAP website the such liquidity EBITDA. or considered is GAAP measures EBITDA direct any be measures. financial morning measures the these which Any income to non-GAAP measures Our

remarks, Finally, for after prepared we deliver the we lines open will our your questions.

Executive Let me now Officer. Osanloo, Chief turn to and over the call President Michael

and experience spending journey. over to lifelong and to Barb in growth I'm going Barb, pleased focus to demand from Morningstar. our Chicagoan, $XXX.X Same in great an at restaurant Barb great grew strong continues years welcome us which the understand and XX shareholders and it demand delivering We grew line a better resource X.X%, she's value. you, sales what that with after research on for family. performance Portillo's be so Thank a our to Portillo's our total million. Relations analysts and our Portillo's equity also journey And continued unbelievable is XX.X% amazing at Portillo's, reflects sales food comes a strong help Investor joins to a the quarter. top be.

everyone produce restaurant class profitability, will EBITDA us remind Michelle most We're level company. annual restaurant to lot and track provide on puts where the our first for on importantly, unique runway to We're we're in in growth in I'd detail as sales. a We generating to company. we're quarterly about a almost healthy EBITDA and, industry. same like we're a margins, adjusted recent unit moment. We've on XX% got long-term grow a continue to excited track XX% growth restaurant growth more the results headed sustain But a which more it.

to public foundation and of While build. which continue markets, solid we to long may we'll the be a XX-year-old we're a success history with brand new a upon

Let's about year. of return about talk and experience growth are We're this little we're excited thrilled guests rooms a the our pipeline. Portillo's the see business. our bit dining that into really off-premise in-restaurant direction proud also to But of

X-month anniversary to its continues in box our impress This first footprint opening That's Our expectations. and continues winter small despite Chicago. managed to of celebrated us Joliet, dead Illinois perform in pickup and to location in just impress. has Portillo's above the

St. members' local design even Pete this Arizona in the restaurant we're recently how to may that the about but the into celebrated suburb and both sites operations that open we'll slated at into in continue also in the are Belt. we're Sun growing same continue restaurant Similar will Gilbert we've to fun, energy trajectory. that build that scaling those and Grandscape in for greatness, about we've used actively to success thanks will We in started our confident recently my sending the market that who's also us of announced her a guests of above name to us. heart have Chief service. see us. C-suite. absolutely continue We prioritize We to fill retro take also to supportive a our in Florida, the Colony. you searching year. beautiful Texas town, Florida. Abruscato, possible for retention quarter the 'XX It's the in exciting our teams members to We X family, Joliet, more experience. our us Colony. our know that without environment. beyond. Tucson, fits wait meeting first years St. our ambition open of will openings The and growth to work of pipeline execute course, are fourth is Development entry with our We've allow values. summer We fun, to environment. and expectations. this the suburb And team in underwriting our realize Sherri inspiring statistics. our performing XX gorgeous. here. we teenager shoes, engaged retiring And dedication identified unwavering it's pipeline and but when of Officer opening To Kissimmee this in and responded some our It's Schererville, our led Phoenix to restaurants Worth grow of already as and early, it talk and of to will It's That's after can't our commitment a who and team operators growth so and development in her restaurant Portillo’s in Supply The her style values, Central We're the success in that And to to kind can't of of We have in how our next to now linchpin is of on this a People with Petersburg, Portillo’s, know efficient X with hard the our I the want work, you build restaurant the We're who Chief performing of grow our noticed be this proof XXXX. rapid the diner and have in That thrilled track we we about and Dallas-Fort Indiana. can in XX% identified commitment. Orlando they're Development importantly, Sherri market and, more another opened Officer restaurants later year, Chain and all this

into of choice. unrivaled work current points family Our it's experiences, and team hourly turnover treating We're an the rate industry them This reflection working. we is being below member employer creating put XX XX percentage a to average. of is like the

well-staffed So high-growth long points restaurants? I how highlight as restaurant do X beyond main having a Today, term the our we beautiful want to concept. and resilience a both about win in company as

revenue. revenue us very on predicated generated drives in to growth. great which in we attractive plus-sized have profitability, million we profitability AUV the for continue months financial First, flexibility gives 'XX. XX need We the $X.X QX That ended investing

we can Second, control. what we focus on

external as experienced those shocks. as permanent. those categorize see pressures market more by a into volatility pressure are transient operators, versus on that cost As we're market We brought to likely transient we commodity see restaurant able

duration to year. Occasionally, competitive we demanding, in are signals And labor reflect throughout half more change. more covered you the continue talk We're that anytime now input to the to environment, in our of do for the the is Michelle a of timing spend magnitude, step industry a through that's more stair contracts. limit the rest know, changing cost see response about change over Our will and fixed-price resetting permanent and increases not cost wages this. as soon. restaurant

we team only company, a a members opportunity members on So as we our they get focusing ensure what that and offer control, Portillo’s; again, are our as we can as can productive two, compelling team a possible. one,

efficiencies operational some measurable year this implemented we've a fact, impact. had that have In

don't until up times great business. across help come and to operators wait who our efficiencies for We're we oftentimes company. it's us are with tough operations ideas. Third, our And an implement look

in By a guests into conversion already we in means reduced by a The completion few the developments friction of mentioned translates to rates have more we the the our that turnover see improved the interface, One can a experience XX%. trend in to or that more sales significant who their clicks. this for early from that line, ordering trend finally, app who past, is just through guests. holding. complete cart streamlining quarter, user our guests why order experience. website Portillo's first now customize our their in upgrading Bottom I of recent And order orders more the average. understaffed our this few the successfully better carts. is family digital orders of is digital their this show results early with now our What improvement abandoning still as upward instead at were At our We as start we've continues than digital the evidence industry locations. commitment and comes

an service staffing satisfaction order face the giving scores experience, everything accident. And back. to We speed customer over pre-COVID on gas have guest and to increased we we've Now, been same act has that in and we is satisfaction highest talked When have simple. importance highest experience. This high good guest respite better is In the call, leading team you prices do we're inflation, high It's about restaurant an to of be restaurants satisfaction. that attention and oasis with very of On the scores being the well-staffed XX we're indicator guests. higher to average seen in March, This sales. past even know satisfaction as quarter's be we volatility. overall guest a our global that managers not for levels. you'll overall last accuracy, of a concern The achieved our that accuracy and back members that proud say the months. see of want order that the scores. produce We

take point. mean convenient, we're for clear delicious, about pricing. we we're that at We our being be will very means fun, not It a taking pricing. But want price I welcoming about a take remain This high-quality meal that to and how their family guests methodical doesn't something. can place thoughtful great

While input value to we've the guests. we're of some our we've counteract pressures still of mindful prices preserving seen, for cost raised

margins. little resistance shore we healthy no to have when we price, or there's We our I earlier, have to have As elasticity up said, taken inflation effect. overshoot profitability. don't That to said been

At We details have that. very power. restaurant pricing our it end growth long-term of We're the shared manage during our executing you I'll to The the going our algorithm. how we is IPO. to we for in off with confident we're ups in of industry more are We're the confident It's hand to day, our the track. playbook its to business Michelle know that, downs, but quarter. cyclical. share and on With

everyone. Great. Thank good morning, and you, Michael,

During quarter, cost line. our bottom the impact but we pressures saw line first top strong did growth,

of However, our committed long-term we the strategy. model confident business and remain to in our fundamentals remain

an increase our new driven restaurants compared to XX.X% X.X% Let's or change was million with in same-restaurant of decline discuss by 'XX in by of and third-party combined results. higher X.X% 'XX. a in X.X%. the menu driven to primarily pricing. the The a menu due increase This X.X% The of X.X% increase the $XXX.X average and by first increase a primarily traffic sales, benefit Revenues sales average X.X% This with same-restaurant offset increase 'XX. delivery was details the increase a was of $XX.X a driven were by check prices from in combined an check quarter mix. X.X% partially in of million, in was quarter recording of reflecting first opening

the cap a quarter comp we with transactions January beef and March as consistency sales of from prices which on is XX.X% When our on XX.X% of tougher basis, percentage the sold quarter several negative our second at all of lap grew grew began This during in in to our quarter trends with look mentioned last to brand. driven higher In durability excluding XX% a of revenues in and our of impact first quarter. will Sales weeks X-year 'XX a continue did long-term This of of in of we goods as a as line depreciation comp from our will stack comp a the as by and our first the you previously was first 'XX. increased target a speaks 'XX. roll X.X% Omicron. increase a March, February. XX.X% impacts to As to across over prices. amortization first see in we and of increase average in Cost X.X%, tougher pork, largely XX.X% the chicken same-restaurant on and commodity January we call, sales result improved

X.X%, third-party change Additionally, cost partially by of by were impacted delivery the sold from offset the our These goods in pricing. was increase resulting negatively increases in average recording check.

As taking measures volatility categories. Michael market view cost transient, timing and to magnitude, duration limit key we as the input ultimately commodity earlier, we stated are in but increases of

We continue to and fix have we beef of our arise. actively opportunities when flats, locked in pricing look other XX% on pricing to in areas almost

As almost of today, XX% commodity in we 'XX. basket have our of for locked

and the in end full reminder, 'XX, XX% higher in are the the and at we commodity basket of expected forecasting to of range I a increase a range that second fiscal in be year. quarter March, provided As in for to currently XX% our

to XX.X% first labor. 'XX. Labor 'XX approximately XX.X% versus primarily up increases. in quarter quarter first on was the rate of percentage a Rates increased as This of of of were 'XX. driven in by revenues XX% hourly the to Now from increase moving QX

live staff $XX openings 'XX. $X.X New both values Restaurant recently, were first levels, first restaurant in 'XX each our capacity XX.X%, in result in X.X% pressures this 'XX the our first versus X% of from our of be or culture. partially EBITDA doing restaurants team of in higher in 'XX quarter average place permanent the million the was labor. more first continued the new further exceptional mitigate million $X XX.X% more every cost 'XX offset our put adjusted of the 'XX and earlier. decreased in labor productive the increased prioritizing optimize 'XX. to XX.X% to labor. adjusted dine-in of expenses versus level and that quarter restaurant to occupancy quarter in our margins members drove 'XX, an level Labor Restaurant million the investments openings EBITDA pre-COVID with $XX.X in To increased does who of Michael basis or of the day. and told, Other increased do which increases these combat The we We 'XX. additional to quarter, costs, and in expansion check. by of quarter and We headwinds, also additional by be to points lesser quarter during are XXX the All have menu and of first inflation. continue prices efficiencies expenses operating by quarter described expect driven more lot in commodity increase a quarter decrease we second labor we price was during and This our we million the first transient first to 'XX. and, we impact believe a X.X%, the menu extent, increased approximately of of

not environment, at our did meet we in had last QX, approximately be QX, price may X.X% if nothing And recall, X.X% you does which for we this would of most As taken of we April. pricing in objectives.

taking in weeks. the next strategically So be we few will pricing

guests for cost these mitigating great some increases. Our is value to remain while our goal a of

in due G&A XX.X% G&A carefully $X.X decrease from in the $X.X in transaction-related 'XX. million are increase quarter $X.X timing quarter in geographic XX.X% of first inflationary Our to This items, led to Preopening the versus 'XX to quarter of The of first in a $XX.X $XX.X expense this million our quarter the All line, first the 'XX million of expenses million in in of Below versus EBITDA adjusted was quarter 'XX 'XX. the the first a 'XX openings environment. million first million in to decreased of of $X.X this lower 'XX, first the approximately primarily loan was quarter of the majority interest X.X%. our of to decrease second million fourth our quarter stock and 'XX, a managing and first driven EBITDA of we of X.X% was increased the specific decrease X.X% was loan. was these restaurant due the $XX.X by with in in underlying 'XX. ended term This quarter in quarter from borrowings cash. expense location expenses 'XX the million payoff first due $X.X to decrease the and from million the first We $X.X of $X.X outstanding of increase first quarter expenses. increase under of million quarter the This of equity-based term of lien 'XX. compensation and lien of in expenses

continued balance support our openings. new cash We to will restaurant our cash in flow using be operating growth plus

So like single sales structure check. same-restaurant average, on us grow of allows low Michael our track. we're business by to said, digits on The

this track on growth Our pipeline is solid deliver to unit check. development XX% year,

on growth single we And confident low to down bit our haven't a EBITDA double high We're algorithm. And industry-wide to some the that and had pressures, Thank year Michael. is teens wonky this it will time. we and run. EBITDA the to digits, the lay sustain revenue in you can over low pressing under while with groundwork adjusted for is long turn continue feel growth our Our growth that slow long-term check. to is that performance certainly in I'll so we back that, your

Thanks, Michelle.

to our for just open our commitment questions, to guests. we want Before I revisit

As X/XX, strive wars, not value-driven allowed sustain last prioritize cetera. an XX have We it it's fan base. embargo, crucial we foundation be price build our through thrived. consistency. has to menu, we a deliver what dot-com et This the oil the Portillo’s Portillo's recessions, for survived, housing crashes, bust, pandemics, only to years has multiple success we point market to experienced takes our quality operators, our obsessed and know for unrivaled and understand and delicious experience.

in Consumers Portillo's. of have confident today. we our turn March, and said have demand. the we the questions. in And for are choosing Like face to Thank ability let's over weather persevered pressures we're We And challenges that, with through you. uncertainties. we operator it to these all

John Stanley. [Operator Instructions] is Our with from first question Morgan Glass

a the think initial bit opened operation in performance the expectations? think are about West opening successful a You How about fourth Indiana, quarter versus a Maybe standpoint operations the those of Madison? an from that very you service gone from How Can talk down little about Pete. your of speed talk little it's or doing bit has St. I you and that were retention? stores a trending how operations are just do standpoint. talked in

Yes.

Let some little Michelle detail. a very, bit more and openings. John, I'll you overview, you general, with In me I'll happy we're tell of let very give -- our give I'd you all

expect. So in the of the in restaurant. of opening restaurants way happy even training with hours management way, good we season our members they we our changed so at we're training out the The Portillo's in you which, those new We do $X,XXX will know Portillo's businesses, We're day. -- know as of sure about with dramatically all winter, what new open new some guests is openings. training aggressively them We on Westfield, to make restaurants are that know, right? think happy our we I team that very is all handling a $X,XXX, they volume,

us. enormous We deeply growth important Florida are volumes team be who We handled think feel And because, you at big train the doing well business. We grace, is speed. We yet. Central And them had so very paid And openings. and a might in we market. best the I business like engaged our the We've opportunity. got is on Portillo's the train St. it's as way. exceptional for of the on fantastic top know, Pete really we management that with members

successfully, continue to time brand opportunities. and we our we our to expand So continue every open enhance

to Yes, what John, just on to was saying. Michael add

those opening expectations will as With that. good to during are I very Joliet, opened we of what and is first months grand But early about about underwriting there's when given Westfield, they when So part you performing X, on above are and indications and feel that openings. the well. in having West saw you during Madison really of winter the good St. there seasonality tell point, their the Pete, April locations, some our definitely terms restaurants think we those Michael's

just I Michelle, And industry-wide. there's pressure on understand wages,

needed big in though. to back have? round you therefore Do this maybe think your You took half last high business that? Or should a just year, retention to of think just step you continue up there's year, the do another moderate wage you that given that bigger inflation the of increases

this put signal John. we this your additional And the that increases year. to do year. Yes, later did in obviously filing morning we in we place expect of this rate last June in substantial But increases point,

And towards put But that at as comparability the look comparability to year last to increases expect to not when June in that do of we half the had expect, year, but year-over-year some so year. some. back do more to I ease you of you we the extent get that for do rate this in

Sandler. The next from Piper question Nicole is Miller with

If not what I'm look in going staffed? is can of that enterprise that this, staffed higher What on you're would late, of happen? the a sure better Would fully if the expect excellence? produce performance margin we comp forward as a Or might with stores demand produce the you've it and lagged fully the the operational you seeing? at like now model a bit done little you have could have, versus but those

see and up, I It's you -- think think so insight actually anecdotally, a that. things of satisfaction in your I turn part, better we do on guest can those better accuracy, so you we When which great service, the that described. that tell will all comp restaurants, profitability. But I sales we fully looked order specifically. speed have staffed exactly tick like of don't measurements, we yields metrics at what have it's

we is number XXX% up. look certainly that right, So your will intuition and

reason interesting with bit comp know a calling Essentially, Okay. then so little just any start of kind about look on go could XQ talk helpful on thanks. Because on wondering X-year a you as that knowing do traffic? at out of the purposeful there and a mix was And the it's kind detailed, year rest maybe and X-year things I could Great. XQ, price of if through basis? ease want you be you then XQ. us that basis? to And

why wanted reason in and see when if The truly sure even I X-year was 'XX, you stack go X-year to the do consistency what on the call look I out you stack was at of Nicole. Absolutely, make X-year look think to a sequentially, basis. Yes. because stack performance a our back you

so And does the some COVID when that you it then X-year of over at on out the take a rolling and noise stack comparability look period in 'XX.

And that so to look that's the wanted brand. where we really at consistency of

So kind being think for deliver look going to yes, I'm I that of is obviously, want continue able do to look to that that, basis on X-year going looks a removes X-year at the to we noise, me, at stack comp for a and all and metric good at, deliver to the that some what us and long-term of that. me, Nicole. stack. to But We're me, metrics, cap, to

XQ And mix how in again? price and is

X.X%, first were was the we up Nicole. in Price quarter, the and X.X%, next

from Tarantino with is question next Baird. The David

Michelle, on just kind saw X-year March. of wondering you comment specifically was I comps. revisiting in the on what the you could if commentary

a You gave X-year the basis. number on

a would math comp, quarter been little the Our know a there's might kinds all comparisons. of X-year full it I indicate than lower have but on wonky

that wondering for So clarify could if me. you

tougher you there sure guys over, X-year get in But I rolling the you to And on to that the at comp to March, alone, continue were point that make made you is if on consistency. started stack be to It that March, understood we over -- around point were March we to like wanted across made look a wanted we X%, the alone. with was to just what right, starting David. when comp basis, just I stack your David, definitely the Nicole roughly QX. isolate earlier, comparison compares X-year March which sure, you at point, a would look I to is healthy, then that if in to going very were Yes.

it. Got

Okay.

wasn't math there correct. our So

inflation have address the than on -- you I Or -- the pricing think catch-up then and since planning for if guess, to we strategy question haven't might that's very you're pricing, be. -- give then have I in you that, directionally quarter? So I on then the pricing that And that helps on even occurred second take the was taken QX you I could guess, Okay. second just the in mentioned don't bit related the I last I this much. is what a in the flow other to think words, in you saw through second you to given is start the of in better spoke? more will that that And time take first to inflation question to that that first that how maybe a do margins is And amount wondering the some you is what And quarter. you the much had the quarter? context

Yes.

pricing the I point. still David, give this because TBD think, didn't we at QX it's

we're fluid. so and And still still conversations it's those having

We in place. have those not put increases price

didn't that's numbers. give so the why we And

did thinking we that started what roll obviously, or definitely how about X.X% when I about to that's Michael We so we're be that nothing, So pricing is said, we to I'll below remains what like continue goal talked want let at right, you price it. But at know our and if pricing guys next had to look But inflation, off. would about. when you quarter. --

we to the make with the we that inflation. at guiding before, And sure below so want get back were principle levels want we again, up be or we that at and to to

next Sara The Bank is of Senatore from question America. with

And just a couple of clarifying questions, please.

The first is on the traffic.

trying on the dissipated by -- is still impact Omicron, very of think, value so had an kind strong. the the in mobility. given you said I idea proposition to traffic of that you Omicron the have primarily negative understand And January. to that of don't quarter, know But was seems I just middle

a this quick between please. is have or drive-through more first that's clarifying just then delivery question a So channels, about shift might and I and labor, like that So still question, things order the aggregation? have

because is to question is What XXX% it more own is Well, accurate, answering order right, we thing. aggregation Yes. an your say thank you're it's be -- still traffic, you Sara, that for transaction.

look to -- to sandwiches or we behavior is what of or whether So changing about isn't feel The a lot. whole I business good argument should and our being right? consumer at underlying entree salads, not know feel sales as that not good,

You're X versus eat to burgers X. not going

the confidence sandwiches, be what So through we you is people go And of is our aggregate fewer is more which burgers, how more about tends people sell? people I the come X.X% so feeding gives it And feeding you're transaction quarter. people. When the of underlying things the were me our you're transaction. it all many that to exactly tends right? That up beef in when we're think sandwiches, that chicken entrees that drive-through, into feeding per per be to transaction. people noise implying, that restaurant, actually

down us Does gives I et little solace of means we're being and inside me make the that at artificially restaurant cetera, feeding that more salads, to are -- look sandwiches, that that still know people. sense? entree, our bit suppressed. transactions that a So up number on X.X%

I of high your forward, the help Michelle, Yes. like labor double-digit I if you like low and labor expect it looks me look as at can percentage And what sales, change kind then of in just just inflation. a of think exactly going in on pricing labor, through, terms single-digit would

it being the guess net to improvements a start just delta by last fully productivity we little we be should pricing offset or Is than the that issue kind inflation? of net when staffed productivity? versus I see that might year? see different having So when are

improvement as and things March what would efficiencies. put in to No, March I labor meaningful we in Yes. describe Sara, in to see in started started some, place

so labor trends like that, QX seeing too additional are continue to would beyond, us put the this year. within put mentioned and to But place I that in improvements there rate understand through expect but are see increases March. do we in in, to And efficiencies those in I have before, we yet definitely we

Jefferies. The next question is from Andy with Barish

and more back-end wanted loaded. going with and I one like out Just supply little It like that a and openings looks the with the given what's third be quarter quarter. appreciate put check, equipment chain Is bit -- that? you deck just on then things unit that in the may to

that's Yes, right. exactly

Although put more X it us have put to quarter of a down. But so Municipalities on be that's process. slow to rebound, fourth on what's was I the permitting and equipment. had we weeks third the it would been from just supply slowing chain couple wouldn't quarter. and it the slide to necessarily going I'd happen it

in we're ground, the Andy. X either the shovels -- So building other actively got still,

about confident for the we're So year. X

in a to mean, I the I you And -- to you. just the number elephant ask ramp? given Got with April guess you're or the willing room, if the address share -- still are then comps, straightforward if positive

Michelle room leave I still. elephant we're that important Yes. is that's lofty to We're We're And just in mind. going is recall, keep to the what lapping think thing some think comp lapping which And numbers. to in -- XX-plus that shared, I an numbers. percent important

We're that business. numbers that our the we confident but in Our goal of have, you the year be We're performance demand we're the the to big lapping. confident consumer cognizant some have we about fact of got for stands.

mentioned I a lapping XX-plus Andy, were the XX% we in And QX. Yes. alone, April comp. lapping

So little becomes -- one. a it's lap the get April the then And to obviously bit XX. challenging was to easier a

the all tougher QX. Michael to elephant laps those to but mindful said, of we're in So be keep going as want that in room you

hitting there. COVID on was overtime in kind Appreciate Got you. color of exclusion, XQ sort like And with line or there still more noticeable? anything, that, or labor the Michelle, the even the onetime stuff that Omicron of pay on costs

a that did And and call nothing that had little that we the significant I on definitely in bit We little in expect to QX. labor Andy, some us beyond. in a that of that pressures margin. in terms there, But bit would impact see QX of in Yes. don't of QX

The Chris is next with from O'Cull Stifel. question

of bit you want support? make around the you I that this investment in you whether terms of magnitude was are anything in wage the you or Is field more in address there the in positions can could dig and certain to investments the hoping there plan later share to a year.

in Here's for they work. we what than so are last -- pockets to where in decisions to wage is see system competitors, And a make make we've the some might we XX we certainly less on want our I'd say, employees made table off months. we where some Chris, going the and hair are we of as what our be behind to It's investments. take

off so it pace feel take to investments. key they that's modest success, in our of definitely to of some really training the That higher places the culture, the turnover that development labor. are where everybody lower like there our come average, train, lot table you're is you is When turnover labor people. I So else's algorithm recruit, inflation as creates wage to money slowing. is on and than comes new have and then fantastic industry. in outcomes But need our great when bring make we a than spending The in to provide just

and are the we're so we And of experiences are some where their Portillo’s. small table. enjoying they have that heck out Take wage some people, and sure this approaching situation. then to at pockets are loved that's off investments how make make appreciated There and train the

gains? That's very improvements. then terms you you mentioned and what of Michael, able then, productivity drive And helpful were to in what Can initiatives efficiency were insight. review those you measurable

example, give you they because I'll Portillo’s ton is lines. of to A found. has a of operators this give series that credit one production I traditional our L-shaped something and this

beef, is et burgers, hotdogs, L long part cetera. the On the traditional sandwiches, the of

assemble what short salads amazing. bowl, call the -- salad where and they're On we scratch we side, our had we salads,

drive-through said, There's the move the the over the the L. team to know we efficient lanes "You if we part members main back bowl Our some salad would of are. could lot what, near space a in where be more

doing guest actually took to you slide of And been to those separate another moved burger line pick had can area, bunch on efficiencies a if if salad, slow, the are we've It salad the over a and creates so And X you in and a because It ordered the we station. creates folks back because that. Portillo’s, bowl it efficiencies they labor traditional restaurants. work in we in places. it of a up

win. salad bowl to a And So to currently. than able staff the fewer people X this is with huge used guest we we're

a our of items in per labor up seen hour because have that. tick We productivity

it's early so And going.

do to savings. that We have we on of real for that example some we with creative some create our vacated space think efficiencies ideas business. will tangible further what But that's one of

The Blair. Sharon next from with question is William Zackfia

we disruptions the Just Can some of in of then would I to hundred before a And question relative those March at quarter if typically, and quarter? XXXX given restaurant couple pandemic, of early lifts XXXX Is on second a Chicago points the something level quarter you be vaccine quarter. Is more about basis to you going that year? kind then that? can think And lifted pattern temper of to about the and first what on-premises? when on, relative there was the the kind about where talk you see full Omicron-related to talk this mandate or last saw look the should margins. you seasonally question,

will going in leverage to Sharon, us, little on I those and look you revenues and it. you trends one. at want a punt that higher start you, to I'm QX more. our periods trends think into when in you hit intra-period QX, QX get I'll -- at look say the for traditionally don't -- I I to Yes, margins, But so you look you and When bit to at

from things look again, some of and improvement be, And what into that margins my expectation would QX. detailed in numbers, we was Sorry. not Sharon? Michael you your given when labor question, think in third and mentioned, a then efficiency the standpoint, that getting would at see I just

-- I think the

ahead. go Sorry,

about Chicagoland lifting with trend the The in asking mandate, what's cetera. were the you -- of happened vax et

In momentum, that XXs, positive mix. to XX% saw -- up came sales we in I of ago. what would look, our some And a we're is inside that year seeing QX, so our was describe it And the right? as

to So happy it improved. we're trend. with up not XXs really that to It's back it's used that be, the low but

Omicron there's But of where afraid into you never And we're of that cautiously There's know. of more now people more new so are improvement, places coming -- COVID. variant people a optimistic restaurants. the

plan we're -- hesitant would to So on cautiously it. for I or but it optimistic, I'm bank

in out order to you at to help Okay. We'll try Chicago. today

$XX the On I year. million to you million line, G&A Michelle, $XX this think, had originally, expected

kind run the of the to were $XX million right Is first quarter. in million for You year? below $XX well the rate still number that

definitely of in yet, that we're because Remember, Sharon, not going I'm growth we mode. off investments. do have

of this make have investments We want do year. we that back to half in the

quarter. in if that at have carefully definitely I the and are to if line half we update But continue you managing next mentioned, coming we of like still back year. we're I'll all -- investments So levels, we trend those the

year to your more now we're point, range use. trending range. than good but still that's So that's a that, good right the still lower I believe a to But for full

Geiger Instructions] with [Operator question Our next Dennis is from UBS.

other there's changes behaviors, mention but could you customers Michelle, or without menu? the cake on seeing customers bit assume late, call I using Michael, if or changes any in can't they're touch pricing at But would Any shakes, there. anything all. do curious be Michael no if how shifts I'm of notable I you're purchase to that out? you behavior or shifts their interested on know, pushback perhaps of what late. a mentioned you in the kind of from

say overall, et and I in very patterns, change sales little would there mix is cetera.

own seeing visit, stable, eating, demand, pretty seeing self-delivery that's all a a they're delivery trend. are continues double -- a grow. a how from burger both a Delivery much sandwich slight We slight growing. beef regular as as uptick people a to sandwich, very We're underlying regular they That's with third-party where beef are our consumer Dennis. big But frequency the going well continued to the from to burger. which

industry just continue costs despite the to solid that build then of that, other returns. new are kind units and those And That's returns. seeing, I to the talked we about relates and helpful. see to higher the the ability quarter, And and as know one it think you all I last your

build elevated you're seeing combination this in new environment So returns? I'm and early we even Joliet kind it of those Is days solid in things strength, better sales? the about support just of it as the think sort St. curious, stronger margins, Petersburg, of really X that a is that

Yes.

I and Joliet think were not builds. Pete both so expensive particularly -- St.

low I us. So attractive Joliet end, given certainly say at our about think relatively what even have we builds. I St. its the and we came think a pretty -- size. careful for we're build new on But was Pete And been cautious about in

consumer So a is those of it lane It's a the the wasn't build those. has drive-through. problems. necessarily. concept drive-through-only everyone But knows, strong for of Joliet, Builds weren't very, think for as very both triple cost I been us.

a bit a and is it of so been pilot And fantastic experiment, far. it's so and

It's volumes think area. something like -- It those our it's of volume. then one there reflects It really out the the in who really the we that just there. did drive-through-only are local great environment. We feel folks Pete there's to beautiful So We be we did well. restaurant. a heck strong, and happy great came And hired of a where trade is everything effectively. is super job handling in And to in trained I concept. this we St. a

Pete we numbers. think executing our is example to . of do, beat effectively. I an So St. playbook And when expect we our

Gregory with Guggenheim Securities. from is question Next Francfort

a but talk of or couple a were openings, held even most Michael, are you that, those on those? on you kind before the I'm My great the X front and had mean, are you curious the those continuing recent the I to and hand X how most that maybe trend? few, if about of sales of question, And there's stores, recent margin in -- been a bunch class because

mean, answer is 'XX. class very We're happy the of the Yes. and I Greg. 'XX short yes, with

say, very expectations. As performing above a underwriting class, our would class, as well. they're performing And I a very, they're

some classes are early we're slowed the some But -- class, by a as ridiculous a just can they ahead the have 'XXs. hair. levels of excited and of very, XXXX down plowing revenue and very So

Got it. And then the maybe labor just on side.

turnover down is Or all? at been? to Has on touched you staying started has think tick improving. elevated kind at of I staffing that levels? How turnover

Yes.

the So are restaurant in some obviously, turnover industry lofty numbers.

represents this and right? benefit turnover rest this percentage what levels still like industry. You our We're track XXX%, of versus do can tell to the against see we So we others. XX I the is that our assiduously in XXX%. XX are approaching some restaurant than of which companies, the in a point high XX XX at industry, industry rest very ourselves percentage to And very, points time, lower we to low you very

that restaurant think a little sticky the than in more we industry. So bit we're others

Maybe I if last sneak in. it. one Got could one

kind impact -- Just futures of you what below I could Are it on the and terms the for we the was curve hedging, significantly Michelle, mentioned, of the think 'XX of above rest XX% out that were you year. or the as commodity to be? you in look 'XX

in Yes. that full almost And Greg, just locked market we're to for be year, XX% at the basket. clear, so

concentration, so tell And you budgeted will I own internal was below which the in we're and rate that biggest -- our projections. at a I our that being mentioned beef, locked

are that. good of the certain at the locks most those in, you in you So obviously the when look QX, of And we about on those, cost QX look weigh prices. is at what in that when other we at commodities, QX. given obviously, locked locking And feel

on pressures we said, more look now you could arise, question know, said, know not to like we there forward lock when we're to at to so when opportunities you where future. I into -- knowing your the right, And in that's look But easing. think forward Because, when you we lock projections, going ourselves in. And that are I going some opportunities be projections, something expect I'm as do transient. these like

So there. 'XX expect 'XX numbers we that, and again, would locking some really because into you hope be into and look easing think, we're to as we not longer-term do

we conference call. And with will conclude today's that,

Thank for day. You a lines. your pleasant disconnect may and you participating, have