Portillo's Inc.PTLO

Portillo's Inc. Leases Disclosure

10-KFiled Feb 24, 20262 min read
LEASES
A summary of operating lease right-of-use assets and liabilities is as follows (in thousands):

Operating leasesClassificationDecember 28, 2025December 29, 2024
Right-of-use assetsOperating lease assets $261,086 $222,390 
261,086 222,390 
Current lease liabilities
Short-term operating lease liabilities
6,878 6,013 
Non-current lease liabilities
Long-term operating lease liabilities
329,190 278,540 
$336,068 $284,553 

The components of lease expense were as follows (in thousands):
Fiscal Years Ended
Operating leasesClassificationDecember 28, 2025December 29, 2024December 31, 2023
Operating lease costOccupancy
Other operating expenses
General and administrative expenses
Pre-opening expenses		$37,305 $32,542 $28,861 
Short-term operating lease cost
Occupancy
Other operating expenses
General and administrative expenses
Pre-opening expenses
2,015 1,813 1,069 
Variable lease costOccupancy
Other operating expenses
General and administrative expenses		4,228 3,894 3,714 
$43,548 $38,249 $33,644 
A summary of lease terms and discount rates for operating leases is as follows:

Operating leasesDecember 28, 2025December 29, 2024
Weighted-average remaining lease term (years):25.625.6
Weighted-average discount rate:9.0 %9.2 %

Supplemental cash flow information related to leases is as follows (in thousands):
Fiscal Years Ended
December 28, 2025December 29, 2024December 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$30,555 $27,223 $23,478 
Operating lease assets obtained in exchange for lease liabilities:
Operating leases48,172 39,650 33,176 

As of December 28, 2025, the maturity analysis of the lease liabilities consisted of the following (in thousands):
Year EndingOperating Leases
2026$33,666 
202733,255 
202833,325 
202933,537 
203033,006 
Thereafter782,208 
Total lease payments948,997 
Less: imputed interest(612,929)
Total operating lease liabilities$336,068 
As of December 28, 2025, operating lease payments exclude $86.1 million of legally binding minimum payments for leases signed but not yet commenced.

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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