Portillo's Inc.PTLO

Portillo's Inc. Goodwill & Intangibles Disclosure

10-KFiled Feb 24, 20262 min read
GOODWILL & INTANGIBLE ASSETS
The Company has one reporting unit for goodwill which is evaluated for impairment annually in the fourth quarter of each fiscal year, along with indefinite-lived intangibles, or more frequently when impairment indicators are present. During the third quarter of 2025, the Company completed a quantitative impairment test of both goodwill and trade names. After completing the evaluation, the Company concluded that no impairment of goodwill existed as of the end of the third quarter. The Company's annual impairment test in the fourth quarter of 2025 reaffirmed that goodwill was not impaired. During the third quarter of 2025, the Company recognized trade name impairment charges of $2.2 million, included within other loss (income), net in the consolidated statement of operations. Refer to Note 2. Summary Of Significant Accounting Policies for further information.

No impairment charges were recognized for goodwill or indefinite-lived intangible assets for the years ended December 29, 2024 and December 31, 2023.

Intangibles, net consisted of the following (in thousands):
As of December 28, 2025
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Indefinite-lived intangible assets:
Trade names$221,725 $— $221,725 
Intangibles subject to amortization:
Recipes
56,117 (32,726)23,391 
$277,842 $(32,726)$245,116 
As of December 29, 2024
Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Indefinite-lived intangible assets:
Trade names$223,925 $— $223,925 
Intangibles subject to amortization:
Recipes
56,117 (30,019)26,098 
$280,042 $(30,019)$250,023 

Amortization expense was $2.7 million, $2.8 million, and $2.9 million for the years December 28, 2025, December 29, 2024 and December 31, 2023 respectively, and was included in depreciation and amortization in the consolidated statements of operations.

The estimated aggregate amortization expense related to intangible assets held at December 28, 2025 for the next five years and thereafter is as follows (in thousands):
Estimated Amortization
2026
$2,707 
2027
2,707 
2028
2,707 
2029
2,150 
2030
1,369 
2031 and thereafter
11,751 
$23,391 

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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