Why Portillo's (PTLO) Shares Are Sliding Today

What Happened?

Shares of casual restaurant chain Portillo’s (NASDAQ:PTLO) fell 3.2% in the afternoon session after the stock continued to decline as the company reported second-quarter 2025 financial results that fell short of expectations and lowered its full-year guidance. The company posted revenue of $188.5 million, below the forecasted $196.5 million, and earnings per share of $0.12. 

Following the results, Portillo's reduced its 2025 revenue and EBITDA guidance, citing softer performance and weaker-than-expected sales from new store locations. In response to the weaker outlook, UBS adjusted its price target for Portillo's downward to $9.00 from a previous target of $12.00, though it maintained a Neutral rating on the stock. The news comes as the company also recently announced the appointment of Denise Lauer as its new Chief Marketing Officer.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Portillo's? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Portillo’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 27 days ago when the stock gained 4.3% on the news that investors cheered a government report showing that inflation remained steady in July. 

The steady inflation figures have fueled expectations that the Federal Reserve may soon consider an interest rate cut to stimulate the economy, a move that would likely benefit consumer discretionary spending, including dining out. The July Consumer Price Index (CPI) rose 2.7% from a year earlier, meeting the previous month's pace and coming in slightly below economists' expectations of a 2.8% increase. On a monthly basis, the CPI rose 0.2%, a slowdown from the 0.3% increase seen in June. While the cost of dining out continued to climb, rising 0.3% in July, this was offset by a 0.1% dip in grocery prices, contributing to the overall stable inflation picture. The market's positive reaction sent major stock indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, soaring. This optimism spilled over into the restaurant sector, which has been grappling with a challenging macroeconomic environment marked by high costs and concerns over consumer traffic.

Portillo's is down 28.9% since the beginning of the year, and at $6.60 per share, it is trading 57.1% below its 52-week high of $15.39 from February 2025. Investors who bought $1,000 worth of Portillo’s shares at the IPO in October 2021 would now be looking at an investment worth $226.63.

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