Hello, and thank you for standing by. Welcome to the Fiscal Fourth Quarter 2021 Conference Call and Webcast for Portillo’s Incorporated. I would now like to turn the call over to Mr. Fitzhugh Taylor, Managing Director at ICR to begin.

Thank you, Rob. Good morning, and welcome everyone. With me on today's call is Michael Osanloo, President – Portillo's President and Chief Executive Officer and Michelle Hook, the Company's Chief Financial Officer. Before we begin our formal remarks, let me remind you that our part of our discussions today will include forward-looking statements. These statements are not guarantees of future performance and should not be unduly relied upon. We do not undertake to update these forward-looking statements unless required by law. And we refer you to today's earnings release in our SEC filings for more detailed discussion of the risks that could impact Portillo's future operating results and financial condition. Our remarks also include non-GAAP financial measures such as adjusted EBITDA, and restaurant level adjusted EBITDA, we direct you to our earnings release issued this morning, which is available on our website for reconciliations of these non-GAAP measures to their most comparable GAAP measures. Any non-GAAP financial measures should not be considered as an alternative to GAAP measure, such as net income or operating income, or any other GAAP measure of our liquidity or financial position. Finally, after we deliver our prepared remarks, we will open the lines for your questions. Let me now turn the call over to Michael Osanloo, President and Chief Executive Officer of Portillo's. Michael?

Thank you, Fitzhu. And good morning, everyone. We appreciate you taking the time to join us on our year-end earnings call. 2021 was a milestone year for Portillo's. We're thrilled with the completion of our IPO and the investor reception that we received. And we're very proud of how we ended the year. I'm happy to share that Portillo's posted strong, top and bottom line growth in the fourth quarter, resulting in a successful fiscal year for us. We grew total sales 17.5% or $79.5 million and we grew restaurant level EBITDA 16.5% or $20.1 million. Michelle will give you a lot more detail on the numbers. But I wanted to highlight our great results for the year. We added five new restaurants in 2021, all of which open well staffed and performed at or above our expectations. This included our first entry into Michigan, as well as our first restaurant near Orlando market, both places that we're going to continue to fill out in the near-term as we expand. Portillo's recognizes success, despite the volatility in the restaurant industry face all through 2021. Our multi-channel model proved yet again to be a competitive strength. Even in the face of the great resignation, continuing COVID restrictions and ever changing commodities costs, we continued to perform. This is reflective of our dedication to delivering an unrivalled experience to our guests through our unbelievable team members. We regularly say that people are the heart of Portillo's, and I'm so grateful to our team members, who through all these challenges have embraced our purpose and lived our values of family, greatness, energy and fun. Now the fourth quarter is always big for Portillo's, and it was again this year, we have so many loyal fans that make Portillo's part of their holiday celebrations…

Great. Thank you, Michael, and good morning, everyone. I want to thank our amazing team members in our restaurants at our commissaries and at our restaurant support center, for the work that they do as we continue to work together and navigate this challenging landscape. Our people-centric culture is centered on working together to create a fun, energetic atmosphere, while living our values. As I discussed on our third quarter earnings call, we completed our successful IPO in late October. You can find all the details on that transaction in our 10K filed this morning. This transaction did have a one-time effect on our G&A in the quarter and I'll touch upon that later. Now turning to our results for the fourth quarter and full-year 2021. We are extremely proud of our performance as we saw strong and balanced top line growth. The second half of the year proved challenging with Omicron and pressures on our commodity and labor costs. Despite these headwinds, we were able to exceed our expectations on a restaurant level adjusted EBITDA growth and adjusted EBITDA growth in both the quarter and full-year 2021. We remain confident we can continue to deliver healthy top line and bottom line growth in 2022 and beyond. And more importantly, we remain committed to our long-term outlook and metrics that were provided in our earnings release this morning. Let's now dive into details. Revenues were $138.9 million, reflecting an increase of $20.4 million, or 17.2% compared to the fourth quarter of 2020. This was driven by a 10.3% increase in same-restaurant sales, combined with the opening of seven new restaurants since the beginning of the fourth quarter of 2020. The same-restaurant sales increase of 10.3% was primarily driven by 9.5% increase in average check and a 0.8% increase in transactions.…

Thanks, Michelle. Before we open for questions, I just want to reiterate, what our main goal is as a company. We are committed to taking care of our team members, who in turn create an unrivalled experience for our guests. That experience is our priority. In a world full of stress, as we want to be the stress relief. Our guests can expect a fun atmosphere and a great meal at an amazing price. We are their oasis. You can see by our sales and comp trajectory that consumers are choosing Portillo's, we have demand. Commodity and labor pressures will come and go. The world may face uncertainties. But we're going to keep the hot dog steaming and the cheese sauce flowing. So thank you. Operator, turning it over to you.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of David Tarantino with Baird. Please proceed with your questions?

Hi, good morning. My first question is on the margin outlook. Michelle, given all the moving parts you described on the cost inflation outlook, and then this incremental pricing that you said in the first quarter? How are you thinking about restaurant level EBITDA margins for the near-term, I guess for 2022, if you can give us a sense of the framework that we should be thinking about?

Yes, David, obviously, given the fluidity of the situation, right, I mentioned that, you know, just in January, we had commodities 5% to 7%, and now we're at 13%, to 15%. And so it's a very fluid situation for us. But as we think about that, we know margins are going to be pressured. And I'm not giving any definitive guidance on margin for a reason. And that's because of the uncertainty surrounding that. And – but I do expect it to be pressured, I expect it to be pressured against what we saw both in the third quarter and fourth quarter, coming into the first quarter, as well as the out quarters in 2022 Simply because of that commodity outlook. And then also, just want to remind you, like as you think about, restaurant level EBITDA, the labor market too continues to remain fluid as well. And so we are looking at potentially making additional investments there. And so, Michael and I, as he mentioned, are going to continue to look at pricing as a lever, but also looking at operational efficiencies. But we do want to remain price laggards, as he mentioned. But I do expect the margins to be pressured.

And then maybe as a related follow-up. It sounds – I understand the philosophy, on being a price laggard. But do you have a sort of long-term target that you want to manage to on that line? I guess, some of those inflations sounds like it's not temporary, so is there a path to I think in the past, you've had mid-20s restaurant level EBITDA, is that a goal longer-term and I guess, how do you get there over time?

Yes, obviously, we want our goal to continue to be to produce the margins that you and we've seen historically, David. And the mix of our margin profile is going to vary in terms of our core Chicagoland market versus our outer market. So I'll just remind you that as we continue to build outside of our core market, right, we build those outer markets. Margins are going to naturally be pressured, as well by us continuing to build in those outer markets. And that will continue to pressure the margin profile overall, regardless of what's going on in the inflationary environment. So, that's just a reminder as well, but absolutely, as Michael and I think about the margin profile, right, as we think about putting, again, next core Chicagoland market, which traditionally has been in the 30-plus% margin range, versus the outer markets, yeah, the blended range, I would expect to be above the 20% range as we move forward.

David, can just build on what Michelle said. So, in times of like, uncertainty, like this, we -- our belief is, well, others might be shrinking portions, taking prices above inflation. Our philosophy is we're going to take traffic. We want to be a great place for consumers, we're very conscious of all the price pressures that consumers face. And our goal is to drive traffic and drive transactions and drive revenue. And we're also -- Michelle and I are much more concerned about margin dollars than margin percent. And our goal is to make sure that we're working hard to grow margin dollars, and we're just not quite as talked up about the percentages.

Great. Thank you, both.

Good to hear from you, David.

The next question comes from the line of Nicole Miller with Piper Sandler. Please proceed with your question.

Good morning and thank you. Just kind of following up on that topic, but asking in a different way. So understanding the lag strategy on price, I was curious, if you or how you manage the gap? So, like you said Michelle back in January, if you were facing 5% to 7% inflation, and still had 7% price, who knows? If you would have put all that into effect, but let's say you're managing at most 200 basis point gap or no gap. I mean, it could have been in your favor frankly. And now you could be facing like a mid to high single digit gap. What gap is in the model that still allows you to achieve a store level margin percentage or dollar POS profit growth?

Yeah, I think Nicole to Michael's point, the way that we're thinking about it clearly is in terms of dollars. But there was a reason why Michael and I put a pricing action in effect in January, right, because as we saw some of those additional headwinds come into play, right, we pushed apart an additional point and a half of pricing in play in the first quarter of '22 to combat some of these headwinds. But remember, pricing is not the only action that we mentioned. We're still looking at operational efficiencies as a means to close that gap. But we don't want to get an over our skis on pricing either Nicole, right. We understand, as Michael mentioned in his commentary that there's inflation going on all around our consumers and our guests, and we want to continue to drive that traffic into our restaurants, and be a good value to our consumer. And so yes, we know there's a gap there. We know, we continue to have to address to close that. But we're looking at a couple different mechanisms outside of just pricing. But, I want to be clear that what I said holds true that we do think that margins will take as a percent, they're definitely going to take an impact in the short term as we work through these challenges.

Maybe one other way of looking at it, and it might not be associated, but I'd be curious about Michael, your comments at the very beginning of the call, the benefits of the multi-channel model. So how are employees and/or guests impacted, if you were to push one channel over another or turn one channel on or off? I mean, previously, you've been mandated, for example, to close dining rooms, is that better to push everybody through a drive thru? Is there some kind of impact that benefits employees or the customers in terms of speed, service, accuracy or even benefits, the enterprise and margins, or is it really kind of normalized all else equal?

To be honest, I'm not -- I don't think we think about directing our customers necessarily do channel. I think what's important is to be responsive to your customers in how they want to consume Portillo's. So, we saw during the bulk of COVID, the importance of having a drive through digital channels, off-premise, all of that was hugely important. But right now, we're seeing consumers start to come back into our dining rooms, right. Back in 2019, we had 53% inside, in 2001, it was about 36% and it's starting to tick back up and we want to be there for the consumer, however, they want to experience us. So in know we’ve broken record. Our thing is we want to be a consumer centric company. We want them to enjoy their time at Portillo's. We want to be a de-stressor in a world full of stresses and we don't want them to feel like their pocketbooks are being crushed. Right now, with fuel costs where they are, their discretionary income is being challenged and we philosophically believe that a value that they -- a great value is going to win with consumers in the near term. When and if prices start to come back down in terms of fuel, commodities, et cetera, we will reevaluate our pricing. But for now, I think Nicole, we feel really good that we have a very strong P&L. We generate a lot of cash. And we can use this time to take share and invest in guests.

Thank you.

Thank you. Our next question is from the line of Chris O'Cull with Stifel. Please proceed with your questions.

Thanks. Good morning, guys. Michelle, my question is regarding the preopening CapEx. It was a lot higher than we had expected, but unit opening guidance was unchanged. Are you seeing greater inflation there, or is there some sort of timing issue at the end of the year?

Both. Chris, to answer your question. So, I'll start with the CapEx. So yes, we're seeing inflationary pressures clearly in our build costs. And right now, we're building restaurants. I believe, you all -- we gave you all a range of $4.5 million to $5 million was generally our build costs. And we're seeing about $1 million higher build costs on the high-end of that range, so call it about $6 million of build costs that we're seeing today on our CapEx. The other thing that's in the CapEx is remember, we're going to start to build restaurants in 2022, that are going to open in the early part of 2023. So there's some 2023 build costs in there, as well, as we're making significant investments in our technology. Michael mentioned, the point of sales system. We're also putting in digital menu boards in all of our restaurants, so there's some technology investment in that CapEx number as well.

Okay. That's helpful. And then can you help us understand how the pricing should flow through the rest of the year roll off, I guess through the rest of the year, if absence any -- absent any additional pricing? And then maybe also come in how you think about the timing of pricing action?

Yeah, absolutely. So don't know exactly what we're going to do the rest of the year, Chris, as Michael mentioned, right, we want to remain flexible in terms of how we approach pricing. But as Q2 as an example, if we did nothing else, right, and we just rolled forward with the pricing actions that we took in Q1 of this year, as well as the pricing actions we did in 2021, Q2 would have a set about a 5% price, because we do have some of that price dropping off that we took in 2021 in Q2 as well. You know, go looking into the out quarters, it's generally going to run a little bit under that around four-ish percent, but that again, Chris that depends on what we're going to do and what pricing actions we're going to take in 2022. So I can't say for certainty, that's going to be exactly what it is, but at least want to give us some visibility into Q2, which gives us some visibility into the first half of the year. But we want to keep our options open in terms of you know, when and how we take price.

Helpful. Thank you guys.

Yes.

The question comes from the line of Andy Barish with Jefferies. Please proceed with your questions.

Hey, good morning, guys. I would imagine even with some of the challenges late in the 4Q, and what I imagined was some overtime spend, and things like that, you still saw some pretty decent labor productivity and talking about operational efficiencies. This year -- there's a couple of things, we can focus on that front, as you know, as wage inflation continues to move higher?

Yes, thanks. First of all, great to hear from you, Andy. So I would tell you that there's both labor efficiency and productivity. They're two separate things. So we, you know, we've got really smart across training our team members historically with COVID. We had, you know, a stilted operating model. And now that we're getting back into a healthy operating model, I think we're going to see our productivity measures improve. We look at items per labor hour, and I think we're going to see our items per labor hour improve to two very strong numbers. That gives us some productivity, it's the trade off. We're paying more for hour, but we're using less hours. So that's one thing. The second way that we can enable that in a very smart fashion, simple fashion, is little productivity enhancers that just keep adding up. Right? I've talked about a couple of things that we've done, we do a lot of catering. This is going sound crazy, but we used to use these boxes that we'd have to tape up. Now we have these boxes that just basically pop and lock. It saves hundreds of hours. We have catering bread, that is pre-cut. Historically, we would get our bread in. We cut it. We package it. And then we give it to guests it's -- the bread is going bad, the minute you start cutting in, you have inconsistent cut sizes. We now have pre-cut bread in catering sizes, that saves hours. Another crazy little one, our Maxwell Street Polish, it came into us and we would hand, cut hand trim the sausages. It means team members are putting on a cut glove. They're cutting it. Our team members don't enjoy doing that it's wasted time. We throw the ends of the sausage away, that's food waste. Now, those sausages are coming into us pre-cut and trim. There is another whole raft of ideas like that, that will take wasted hours away from our team members who can then be focused on much more productive -- productive actions. And our ops team is aggressively pursuing all of those things. Now the caveat is it cannot negatively affect the consumer experience. So we're not going to do anything that negatively affects the consumer experience. But there's wasted effort in our restaurants. There's food waste in our restaurants that we are going to be all over.

Thanks. Let me just shift to the top-line. Michelle, you talked about the -- obviously the March acceleration last year? And -- kind of the implications of the two year trends running in the mid-20s, is that kind of where you were in January and February as well? Just I know there's a lot of moving pieces, but just trying to get a sense of where things are running currently?

Yes, I mean, definitely to your point, Andy, last moving pieces. But, yes, I mean, clearly, we were seeing the commodities, as I mentioned, in that 13% to 15% range that is impacting us. And as we look at rolling into this year too, our labor, we're continuing which -- this is a good thing, right, we're continuing to staff up at the level that we need to be and our labor utilization numbers look very good. So, when you look at some of the performance in the fourth quarter, and I think, Michael talked about some of the productivity et cetera, we did see because of Omicron, in the fourth quarter too, some lower staffing levels. So, as we start to staff up right in the first quarter, and beyond, that puts a little bit more pressure on that labor line as well, as well as the commodity line. So, those are two things to consider as we look at Q1 versus say a Q4 and some of those trends that are swaying in a direction that's higher than they were in Q4. So, that's one thing I'd point to without getting into super specifics on where exactly margins were in January and February, but they were definitely impacted versus what we saw in Q4 on both lines.

Yes, I was looking more -- thanks for the call there, I fully understand. But looking more at kind of the -- is there a big difference in the two-year trend of same-store sales in March that year versus kind of the first couple of months of the year?

Got it. Yes, no. February, Andy is traditionally the lowest month for us in terms of sales. So, as we see coming out of the colder February into March, our sales trends, when we look at average weekly sales, and looking at that nitrogen, our trends are definitely improving. But remember we're comping over right 24.6% in -- from period three of last year, so we're comping over a big number. But our sales trends remain very healthy. And that's a good sign. To Michael's point, we have demand.

Right. And Andy if you -- I think the question -- it's a real wonky set of numbers. So, if you go back to January and February of 2020, those are actually really good numbers for us. We came -- we were performing really well and then things fell off a cliff with Omicron in March of 2020. So, then when you go to 2021, we look good. We look okay, in January and February, because we're lapping strong numbers with COVID still happening. And then in March of 2021, we look really good, because we're lapping a complete shutdown from 2020. So, this year, the numbers are -- we're lapping decent numbers in January and February, and really good looking numbers in in March. But the two-year stack is pretty consistent for us and we feel the two-year stack looks pretty good. The three-year stack looks even better when you compare what we were doing this year versus 2019.

Yes, if you look--

Got you.

Yes, if you look at two-year stack Andy, right, in Q1 of last year, we did a 0.8% comp, and then we gave the range of 7.5% to 8.5% for Q1 of this year. So, to Michael's point, we are very comfortable with the two-year stack in Q1 of 2022 and how that's shaping up.

Okay. And then just one final one from me kind of taken a little further look back historically, in periods where gasoline prices have been have been rising. What are -- some of the long term operators in the system kind of seen in, you know, in the Chicagoland market maybe where obviously, you've had the longest operating and densest presence.

Yes. When you go back and you look at Portillo's performance, whether it's, great recession or the recession early 2000 or even the recessions -- the short recessions in the 90s. We are a counter recessionary business, our business picks up, and I think – and you know, I'm a student of history at Dr. Dick [ph]. His philosophy was always we want to provide a value based oasis for guests when everyone else is jacking up prices, and fuel prices are going up. We're going to take traffic and that's exactly the playbook that we're applying today. We think that the margin pressure is idiosyncratic, but the demand for our business winning over guest and that long term, it creates more value for us. We will fix the margin stuff, whether it's in quarter two, quarter three, I don't know when but it's going to resolve itself. But demand from your guests is really important. And we're blessed because as you know, we have the P&L flexibility to invest in our guests right now. Q – Andy Barish: Thank you very much.

Thank you, Andy

Thank you, Andy

Thank you. The next question is in the line of Dennis Geiger with UBS. Please proceed with your questions. Q – Dennis Geiger: Thanks. Good morning, Michael and Michelle. Encouraging to hear that because of how you treated your people and I assume because of your hiring practices, you've not had to limit service channels or hours of operation. And I think Michelle, you spoke to some certainly some nice improvement in staffing levels. But can you just kind of give us the latest on staffing relative to where you'd like to be maybe, how short maybe you are, if you're short at all on staffing levels?

It's a great question. Let me let me -- there's -- it's a little bit of a nuanced question, because I like to think about what's an ideal number of team members for each restaurant versus are we able to staff all the hours that we want at each restaurant and those are two slightly different issues. Because you can staff the hours, you're just -- you just asking a lot of your folks, they're working more than you want them to, more than maybe they want to and you're paying a little overtime. It ballparks current situation is we're probably about 10% light in bodies. And it's -- there's –well that's why Michelle alluded to this, right? There are markets where the minimum, the entry wage keeps going up. And it's daunting task, but it's like a game of musical chairs. And I want to make sure Portillo's has a chair when the music stops. So we're going to continue to be smart and thoughtful about investing in frontline people. We can live on the down 10% for quite a while. But I don't want that number to go much lower than that. Q – Dennis Geiger: That is very helpful. Thank you. Then just another one, as it relates to the new bill passed I’m sure you spoke to the million dollars or so in higher costs, wondering if you could just clarify if that's basically all inflation versus anything that's unique to the upcoming new build restaurants versus what you've built historically. And I guess the follow-up, which is probably next to impossible to know, is it possible to share kind of how you think about what's sustainable as it relates to the higher costs from the inflation versus maybe where you might have visibility into what might be a bit transitory? Thank you, guys

Yes, it's a great question, Dennis, if I can answer it fully and honestly, I'd be like, question beyond belief. Here's what I'll say. It is truly inflationary costs. And its things like the price of steel, or masonry, or wood, or the labor associated with it, or the fuel associated with getting that stuff to our build side. So it is truly inflationary costs, our team is working smart and hard to make sure that, we're value engineering the buildings, as wherever. When steel goes up – we're using masonry, when masonry goes up, we're using some other material. But we're trying to be smart and investing in the building appropriately, not hurting the guests experience but not – not wasting money. So we're doing that on a very, very consistent basis. And, six months ago, we didn't see this level of inflation six months ago, Michelle, and I were like, yeah, we we've been pretty careful. But we didn't anticipate a war in Ukraine. We didn't anticipate fuel costs where they are. And so we're just being as transparent and honest as possible. What will happen in three to six months? I don't know. I would be surprised, if the rate of growth, of all these costs continued. That would be very surprising to me. But the reality is that, we're still building with certain returns on invested capital targets that we are non – we're not going to bend on, we have to return to our investors. And so, even now, as we're building we're very comfortable with the return on investment that these buildings will bring. And the total cash flow, the cash on cash returns that we generate, that is a non-negotiable for us.

That's great. Thank you.

You bet.

Our next question is from the line of Sharon Zackfia with William Blair. Pleased proceed with your question.

Hi. Good morning. I appreciate the color on January and February. I guess, I'm curious whether you saw any kind of noticeable impact from the vaccine mandates and Polk County [ph] during that timeframe? And kind of concurrently, whether you've seen a benefit that's been lifted? And then, if you have any – I just want to clarify, I assume you're floating, post the kind of contracts for B Class that I think is through March or April. Are you just using a float on all the proteins? And are you comfortable that there's going to be enough supply if you don't lock-in?

Yeah. Let me – Sharon, good to hear from you. Let me answer the first part of your question. And I'll turn it over to Michelle. You well – you obviously, you know what situation Chicago was in December and January with, vaccine mandate showing your Vax card going. It was – I don't know, how to describe that without having to put money in our swear jar. But so it was crazy. And as we saw the Vax mandate come off, we have seen the pickup in our performance, right? So you can see that in the underlying demand. You can look at it in terms of comp, I like – I think comp can sometimes be misleading numbers. So I look at just revenues generated, right, weekly revenues generated, and we have a very, very good trajectory. Our restaurant dining rooms are becoming revitalized, again, because people want to go to restaurants they want to go out. And that Chicago still represents a very healthy portion of our business. So the trajectory for our Chicago land business is very, very good. I think Chicagoans have said that, they're done with Vax mandates, they want to go out to eat and they want to enjoy themselves. And that's what we're seeing in our restaurants right now. That's what gives Michelle and I confidence that, we have very strong consumer demand. And that the – the idiosyncratic cost issues that we face, we'll deal with. But we're going to take as much of that consumer demand and share as we can.

Yeah. And Sharon to answer your question on commodities. So, as we sit here today, I might have mentioned this before, when we talked in January, but we're 100% -- we were 100% in our NRB flats in Q1. And we have locks-in place for the remaining quarters. So Q2 as locked on the flats about 40%. Q3 were at about 50% and Q4 at about 70%. So you blend all that together about call it, just about 50% locked on the flat for the year. And then the other thing, so -- that we traditionally have not done but given the volatility, one thing that we just recently did was we entered into a fixed pricing contract on our hot dogs. And our hot dogs are around 6% of our basket. But we locked into a fixed pricing arrangement on our hot dogs for April through the rest of the year, just to mitigate some of the volatility there. Outside of that, Sharon, we're pretty much floating with the market on our other line items.

Okay. Thank you.

Yeah.

Our next question is from the line of Gregory Francfort with Guggenheim. Please proceed with your question.

Hey, thanks. I have two quick ones. The first one is just on wage inflation. Give me frame of where it is right now either from a total wage inflation perspective or an hourly wage inflation perspective. And are applications picking up? I think that's we've heard from some companies. I'm curious if you guys have seen that as well.

Greg, great to hear from you. So, I think Michelle said it that Q4 2021 versus Q4 2020, our wages were up about 20% for our frontline hourly workers. And so, we think that that pace of growth will slow down, but it's still -- we're not seeing an end in sight to high-single-digit, low-double-digit wage inflation. So that's how we're modeling it on a go-forward basis. We're trying to be very surgical on that, where we're thinking about wages being -- we're trying to be very precise on when we do add wages, where are we adding them, right? Are we adding them to nights and weekends, to day shifts? Which restaurant has what problem and how do we address that restaurant in a very specific way? I'm very opposed to just spending the money like peanut butter. We've got to be really precise, and I think that will help us. And then the second part of your question is, like, I mentioned this earlier, we opened Joliet. We had no -- I mean it sounds crazy, but we had no problem getting 100 people to join. We're in the middle of -- right now, we just turned over our St. Petersburg restaurant to the -- from construction team to the new restaurant opening team. We have over 120 team members signed up and my operators are -- they say that these are amazing people. We have super high quality people. And they're excited to open this restaurant. And so, I don't -- I think that there is some end in sight, because the level of optimism that I'm hearing from our hiring teams and from our frontline teams is unlike anything I've heard in the last couple years.

Got, Michael thanks. And then, my other question was just -- I think I have to ask on Texas, really good to of see the news, I guess we could talk about a little more freely now that it's out there.

Yeah.

Can you make what the plan is, and is it the encircle Dallas own the Dallas market come in from the suburbs. Just how you're thinking about that now that the news is out there and you got an exciting opening this year? Thanks.

Yeah. I just want to take a second I don't know if the folks on the phone are familiar with the development at Grandscape in the Colony. But it is -- it's worth visiting some time, if you want to see what the future of commercial real estate looks like. It's unbelievable. There's a Nebraska Furniture Mart that is a traditional box that does $1 billion of sales. It draws from attachment that is ridiculous. We're in front of a sporting goods store, a shield that blows away any other sporting goods store in America. This is -- it's an invite-only kind of real estate development. They asked us to join them there. We have an amazing piece of real estate. It's within five minutes of Toyota's North American World Headquarters, a huge office complex in Plano and Frisco. This is one of the greatest real estate sites, I've personally ever seen. We're super excited, feel honored and privileged to be part of that development. And I think it's going to be a world-class opening for us. We're investing, people and share of mind way in advance of that opening. From that, we are going to quickly build scale in the Dallas-Fort Worth metroplex, right. That's our strategy. We're going to build in Dallas. I think that there's a lot more restaurants in Dallas-Fort Worth. Dallas-Fort Worth population wise is right near Chicago and is likely to exceed Chicago in the next year or two. And you know, we have 30 plus restaurants in the Chicagoland market. I think Dallas is going to be an amazing market for Portillo's. Once we achieve scale in Dallas, then we'll look at other markets within Texas. But we're going to Dallas, we're going to make it hugely successful. And we're just going to build scale in Dallas-Fort Worth.

Thanks, Michael.

You bet. Good to hear from you.

Thank you. Our final question is from the line of Sara Senatore with Bank of America. Please proceed with your question.

Hey, thank you very much. Just two questions, please. The first is, you mentioned that the store in Joliet, this new prototype is serving unbelievable amount of food through off-premise. Could you give any more color on how you should think about volumes? Is it the type of thing where you actually see volumes that are similar in aggregate to a standing a sort of an average store or should think about it more just as an average store x the dining room capacity in the mix? So that's question one. And then question two is, I think you mentioned that Portillo's is countercyclical. I just wanted to sort of clarify that, I say when there is pressure on consumer income, your sales flow as all the restaurants do, but may be less. I'm just trying to -- I don't know if it was just an off-hand comment, but I'm trying to gauge sort of how to think about your concepts specifically in the context of potentially a consumer that is softening or demand softening, or incomes are under pressure?

Yes. We're really happy with Joliet, Sara. It's doing everything that we would have hoped. I mean, keep in mind, it opened in the heart of the winter in Chicago, we've had a couple of really bad snowstorms and bad conditions. And it's still doing, over 140,000 a week right now. And I think it's going to just keep building momentum. So we're exceptionally happy with that restaurant. We think that, that restaurant has that restaurant has a lot of potential. The good news bad news is it needed to be a little bit of a pressure-release valve from Shorewood which is about five miles away. And we're not seeing much pressure-release from Shorewood. Sherwood is still bursting at the seams. So, we're super excited. It's early going. I don't know if I'm, I'd model that number, but it is -- we're excited. It's exceeding our expectations. It's exceeding what our ROI modeling was. And so we think that we might have found something very special here. And then, I'm sorry, the second part of your question was about the consumer?

Yeah.

Yeah. You mentioned…

Yeah. I got it. I am going say, Sara, maybe I'll attempt to tackle that one. And if I'm way off points then, Michael and I that, but I think Michael mentioned this during, the times that we're in today high inflationary times. And I think Michael mentioned, Portillo's wants to be considered good value for our consumers. And I'll point to our average per person check is under $10. So, as we look at, when people are looking for good value. I think Portillo's provides us with our average check with the abundance of food that we provide. I think, as people look towards say a value proposition in times like this, I think, you know, Portillo's is one that Michael mentioned, traditionally has done well in this type of environment, whether you look at prior recessionary type environments, Portillo's has performed well. And if that was your question, hopefully that helps, if not, let us know if you have a follow-up.

Yeah. That was perfect. I just, -- there's always sort of a debate between kinds of what have trade down versus trade out of restaurants on the whole? And that's what I was trying to get at. So thank you very much, Michelle. That was perfect. Thank you.

Great.

Thank you. Ladies and gentlemen, this will conclude our question-and-answers session for today. This also concludes today's conference. You may disconnect your lines at this time. We thank you for your participation. And have a wonderful day.