Portillo's Inc.’s PTLO shares have surged 38.3% in the past three months, outpacing the industry’s growth of 0.4% and the S&P 500’s decline of 3.8%.

As of yesterday, the stock closed at $12.42, below its 52-week high of $15.78 but above of 52-week low of $8.38. In the past three months, PTLO has also outperformed industry players like BJ's Restaurants, Inc. BJRI, Cracker Barrel Old Country Store, Inc. CBRL and Kura Sushi USA, Inc. KRUS.

PTLO Price Performance

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Factors Aiding PTLO’s Performance

The company is benefiting from solid revenue growth, expansion efforts and operational efficiency. Increased digital engagement and a well-optimized off-premise business, including drive-thru and delivery channels, bode well for the company. 

Portillo’s is actively pursuing expansion with a strategic focus on efficiency and cost-effectiveness. In 2024, the company opened 10 new locations, including two compact restaurants of the future prototypes designed to lower construction costs and improve operational efficiency. Looking ahead to 2025, PTLO plans to accelerate growth with 12 new openings, all of which will be restaurants of the future, with a concentration in Texas and an entry into Georgia via Kennesaw. 

While most openings will occur in the latter half of the year, the company expects a more balanced pipeline in 2026. Additionally, PTLO is working on further optimizing its footprint, including an even more compact restaurant of the future 2.0 model and new formats tailored for airports and walk-up locations to enhance accessibility and profitability. 

The company is set to launch Portillo's Perks Loyalty program next month, aiming to enhance customer engagement and drive traffic across its locations. Unlike traditional punch card programs, Portillo's Perks operates through a digital wallet and leverages a personalized, data-driven marketing strategy to influence guest behavior. The company is initially focused on rapidly growing membership, targeting 1.5-1.7 million sign-ups by July. 

The program will be tailored to different markets, encouraging frequent visits in well-established areas like Chicagoland while building brand awareness and excitement in newer markets. By utilizing targeted offers based on customer habits and purchasing patterns, the company aims to strengthen guest loyalty and optimize marketing efforts for sustained growth.

The PTLO Stock Down 11% in a Month: Is it a Perfect Entry Point?

Despite an impressive rally over the past three months, PTLO has pulled back 11.2% in the past month, underperforming the industry’s 4.4% dip. This decline is largely driven by broader market volatility, inflationary pressures and intense competition. However, the pullback appears to be a short-term setback rather than a fundamental weakness. With strong long-term growth prospects intact, this dip presents a strategic buying opportunity for investors looking to capitalize on PTLO’s future potential.

Conclusion

Portillo’s continues to showcase strong growth potential, driven by solid revenue expansion, strategic footprint optimization and increasing digital engagement. The company’s focus on operational efficiency, innovative restaurant formats and the upcoming launch of Portillo's Perks loyalty program positions it well for sustained long-term success. Despite recent market-driven volatility, its fundamentals remain strong, with robust expansion plans and customer-focused initiatives set to drive growth. The recent pullback presents an attractive opportunity for investors to invest in a company with a clear path to continued momentum and profitability. PTLO sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report

BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report

Kura Sushi USA, Inc. (KRUS) : Free Stock Analysis Report

Portillo's Inc. (PTLO) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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