What happened?

On August 5, 2025, Portillo’s cut its 2025 revenue growth guidance roughly in half and announcing that it now expected Adjusted EBITDA growth to be flat to low single digits from the previously guided high single digits.

On this news, Portillo’s stock fell $2.21 or 23.2%, to close at $7.28 per share on August 4, 2025, thereby injuring investors.

On May 5, 2026, before the market opened, Portillo’s announced its first-quarter 2026 financial results. Among other things, the Company reported a 0.1% decrease in same-restaurant sales, a $5.9 million decrease in operating income to $4.5 million from $10.4 million, and a net loss of $0.5 million. Restaurant-level adjusted EBITDA decreased $1.8 million to $34.8 million, and adjusted EBITDA decreased $2.8 million to $18.5 million.

On this news, Portillo’s stock fell $0.30 or 6.17% to close at $4.49 on May 6, 2026, thereby further injuring investors.

What is the Portillo’s lawsuit about?

The Portillo’s class action lawsuit alleges that throughout the Class Period, Defendants failed to disclose to investors that: (i) Portillo’s rapid expansion was going poorly, as it overbuilt in areas without any name recognition, cannibalized its own stores, and marketing could not drive enough additional interest to justify the expansion; (ii) the Company was having to offer promotions to drive interest, which was decreasing same-restaurant sales; and (iii) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.