Portillo’s Inc. launched its initial public offering Thursday, raising more than $405.4 million and setting the stage further growth of the 67-unit fast-casual brand, says Michael Osanloo, the company’s CEO and president.
The Oak Brook, Ill.-based Portillo’s set its opening price at $20 for each of its 20.3 million shares and they closed nearly 50% higher at a little more than $29 a share. The stock traded during its first day at between $25.72 and $31.87 a share.
“Going public is not a destination,” Osanloo said in an interview at midday. “It's a first step in a journey. I'm excited, but the next 10 to 12 quarters really matter.
“We want to be a great restaurant company,” he said, “and that means meeting and beating our shareholders’ expectations on a go-forward basis.”
The fast-casual brand currently has 67 units in nine states. Osanloo said Portillo’s team remains “maniacally focused” on execution and plans to add about 16 restaurants in the next two years.
“We've identified seven restaurants for ’22,” he said. “We’re going open two in Arizona, two in Florida. We have one coming in Texas,which I'm really excited about, and then another restaurant in Michigan and Illinois. And then ‘23 we're targeting nine restaurants.” A likely new market in 2023 will be Ohio, Osanloo added.
Per person check average for Portillo’s is $9.60, he said, but average unit volumes remain at $7.9 million.
“We have unbelievable people in the front lines who just bust their butts every single day, taking great care of our guests,” Osanloo explained.
Founder Dick Portillo started the company in 1963, investing $1,100 in a trailer hot dog stand in Villa Park, Ill. The brand is known for its Chicago-style hot dogs, Italian beef sandwiches, char-grilled burgers, fresh salads and chocolate cake. The company also has the Portillo’s Home Kitchen catering business and ships food to all 50 states via its website.
The company’s do an average $4.9 million in sales per restaurant in the drive-thrus alone.
“Our drive-thrus are not like what most people expect or think of as a drive-thru,” Osanloo explained. “Most people think of as a drive thru where you pull up, there's an order board, you order, maybe some AI [artificial intelligence] interacts with you, you go to a window and pay, and then to another window and collect your food.”
Portillo’s adds a very human element to the drive-thru, he said.
“When you go to Portillo's drive-thru, there's two lanes of traffic. You have a human being come up to you and ask you what you want, and they help curate the menu,” Osanloo explained. “So if you order a beef sandwich, they're going to say, ‘Would you like sweet or hot peppers?’ … If you don't order a chocolate cake, they're going to tell you, ‘By the way, we make chocolate cake in-house every single day ,and I will tell you it's the best darned chocolate cake ever going to have. So you should try it.’
“A human being helps you and curates your order for you,” he said. “There's a mobile POS device that we collect payment. They put a sticker on your window and the two lanes will merge into one and then food runners run your food out to you.”
Osanloo said that personal drive-thru interaction “is one of the best ways for a guest to experience a restaurant company.”
The company plans to open a triple-drive-thru, pickup-only restaurant in Joliet, Ill., in the first quarter of 2022.
Portillo’s shares were trading on the Nasdaq Global Select Market under the ticker symbol “PTLO.” The closing of the offering is expected on Oct. 25.
Jefferies, Morgan Stanley, BofA Securities and Piper Sandler were acting as lead joint book-running managers and representatives for the Portillo’s stock offering.
Portillo’s joined a number of restaurant companies going public this year, including Charlotte, N.C.-based Krispy Kreme Inc. in July, Grants Pass, Ore.-based Dutch Bros. Coffee in September and Bradenton, Fla.-based First Watch Restaurant Group Inc. in October.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless