Nominates Charlie Morrison, Who Delivered Total
Shareholder Returns of ~760% During His Tenure as CEO of Wingstop,
and Nicole Portwood, an Experienced Marketing Executive and Former
CMO of Tito’s Handmade Vodka, to Company’s Board
Nominees Possess Necessary Restaurant
Operations and Marketing Experience to Drive Greater Urgency on
Enhancing Company Performance
Engaged Capital, LLC (together with certain of its affiliates,
“Engaged” or “we”), which beneficially owns approximately 8.6% of
the outstanding Class A common stock of Portillo’s Inc. (NASDAQ:
PTLO) (“Portillo’s” or the “Company”), today announced that it has
nominated two highly qualified, independent candidates for election
to the Company’s Board of Directors (the “Board”) at the 2025
Annual Meeting of Stockholders (the “Annual Meeting”). In
connection with its nomination, Engaged issued the following
statement:
“Engaged is one of the largest stockholders of Portillo’s
because we believe the Company has a clear path to delivering
enhanced value for stockholders. Portillo’s is an iconic brand with
beloved restaurants that possesses a number of attributes that set
the foundation for highly profitable long-term growth,
including:
- Industry-leading average unit volumes, or AUVs;
- High-quality and differentiated food and beverages offered at
compelling value; and
- Proven portability of the concept based on new store volumes in
expansion markets where overall awareness is still very low
Despite these tailwinds for value creation and a rich legacy as
a Chicago classic, the Company’s performance appears to be
suffering due to outdated restaurant operations, ineffective
marketing and lower than justified restaurant-level cash-on-cash
returns. Although these issues have led to a depressed valuation
for the Company, they are all readily fixable.
Based on our own analysis and engagement with Portillo’s, we
believe the Company has a significant runway to increase same-store
sales and profitably grow restaurant units. We are encouraged by
recent initiatives to address the Company’s challenges, including
the addition of long-time Chipotle CFO Jack Hartung to the Board.
Ultimately, however, we contend the magnitude of value creation at
Portillo’s will depend on leadership’s ability to execute key
initiatives with precision and urgency. The Company needs to refine
its approach to new unit development, modernize restaurant
operations and related technology, and deploy targeted marketing
investments to increase awareness and drive traffic.
We are confident that electing new directors, who possess recent
restaurant operations and marketing experience, will dramatically
improve Portillo’s ability to execute and close the gap with
industry peers. That is why we have nominated two highly qualified,
independent candidates – Charlie Morrison and Nicole Portwood –
whose backgrounds are ideally suited to help resolve these issues
on an expedited basis. Mr. Morrison’s experience as a world-class
restaurant operator, who delivered total shareholder returns of
~760% during his tenure as CEO of Wingstop, and Ms. Portwood’s
marketing expertise for household brands, including Tito’s,
Mountain Dew and Live Nation, will be extremely additive to the
Board.1
It is important to stress that we were forced to resort to this
public nomination after months of unsuccessful private discussions
focused on adding Mr. Morrison to the Board. Much like we have in
other engagements with our portfolio companies, we remain ready and
willing to reach a constructive resolution that spares all
stakeholders an election contest. We believe the anchor for this
type of resolution is further incremental change to the Board. A
strengthened boardroom with collaborative and experienced
restaurant executives, like Mr. Morrison and Ms. Portwood, is a
win-win for all of Portillo’s stockholders and stakeholders.”
THE ENGAGED CAPITAL
NOMINEES
Charles (Charlie) R. Morrison
Mr. Morrison is a leading restaurant industry executive and
director with significant expertise in compounding same-store
sales, optimizing operations and developing high-return unit growth
strategies in the restaurant space.
- Most recently served as Chief Executive Officer of Salad and
Go, a fast-casual restaurant chain, from April 2022 to October
2024, where he also served as a director from November 2020 to
December 2024.
- Prior to that, served as President and Chief Executive Officer
of Wingstop (NASDAQ: WING), an American restaurant chain, from 2012
to March 2022, where he also served as a director and then as
Chairman from 2017 until his resignation.
- Earlier in his career, served as President and Chief Executive
Officer of Pizza Inn Inc. (formerly NASDAQ: PZZI) (n/k/a Rave
Restaurant Group, Inc. (NASDAQ: RAVE)), a publicly traded
international pizza chain, from 2007 to 2012.
Nicole Portwood
Ms. Portwood is an experienced marketing executive with
significant expertise in leading growth and brand transformation at
well-known, global brands.
- Most recently served as Chief Marketing Officer of Salad and
Go, a fast-casual restaurant chain, from October 2023 to February
2025, where she also served as a director from February 2023 to
October 2023.
- Previously served as the General Manager of House of Delola,
LLC, a ready-to-drink cocktail brand developed by Jennifer Lopez,
from June 2022 to September 2023, as well as Chief Brand Officer at
Live Nation Entertainment, Inc. (NYSE: LYV), an American
multinational entertainment company, from June 2021 to June
2022.
- Prior to that, served as Vice President of Marketing – Mountain
Dew, Energy & Flavors at PepsiCo, Inc. (NASDAQ: PEP) from
September 2018 to June 2021, and as Vice President and Chief
Marketing Officer of Tito’s Handmade Vodka at Fifth Generation,
Inc. from 2010 to 2018, where she helped extend Tito’s beyond its
local Texas roots to one of the most recognized brands in the
world.
About Engaged Capital
Engaged Capital, LLC (“Engaged Capital”) is an investment
advisor with a private equity-like investing style in the U.S.
public equity markets. Engaged Capital seeks to help build
sustainable businesses that create long-term stockholder value by
engaging with and bringing an owner’s perspective to the
managements and boards of undervalued public companies and working
with them to unlock the embedded value within their businesses.
Engaged Capital focuses on delivering superior, long-term,
risk-adjusted returns for our limited partners. Engaged Capital was
established in 2012 and is based in Newport Beach, California.
Learn more at www.engagedcapital.com.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Engaged Capital, LLC (“Engaged Capital”), together with the
other participants named herein, intends to file a preliminary
proxy statement and accompanying WHITE universal proxy card
with the Securities and Exchange Commission (“SEC”) to be used to
solicit votes for the election of its slate of highly-qualified
director nominees at the 2025 annual meeting of stockholders of
Portillo’s Inc., a Delaware corporation (the “Company”).
ENGAGED CAPITAL STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY
TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A
PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION,
THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF
THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR.
The participants in the anticipated proxy solicitation are
expected to be Engaged Capital Flagship Master Fund, LP (“Engaged
Capital Flagship Master”), Engaged Capital Co-Invest XVII, LP
(“Engaged Capital Co-Invest XVII”), Engaged Capital, Engaged
Capital Holdings, LLC (“Engaged Holdings”), Glenn W. Welling,
Charles R. Morrison and Nicole Portwood.
As of the date hereof, Engaged Capital Flagship Master directly
beneficially owns 3,932,271 shares of Class A common stock, $0.01
par value per share (the “Common Stock”), of the Company, and has
entered into certain cash-settled total return swap agreements
constituting economic exposure to a further 168,452 notional shares
of Common Stock. In addition, as of the date hereof, Engaged
Capital Flagship Master has sold short certain custom covered call
options referencing an aggregate of 620,000 shares of Common Stock,
which have a strike price of $14.00 and expire on May 2, 2025. As
of the date hereof, Engaged Capital Co-Invest XVII directly
beneficially owns 1,547,500 shares of Common Stock. Engaged
Capital, as the general partner and investment adviser of Engaged
Capital Flagship Master and Engaged Capital Co-Invest XVII, may be
deemed to beneficially own the 5,479,771 shares of Common Stock
owned in the aggregate by Engaged Capital Flagship Master and
Engaged Capital Co-Invest XVII. Engaged Holdings, as the managing
member of Engaged Capital, may be deemed to beneficially own the
5,479,771 shares of Common Stock owned in the aggregate by Engaged
Capital Flagship Master and Engaged Capital Co-Invest XVII. Mr.
Welling, as the Founder and Chief Investment Officer of Engaged
Capital and sole member of Engaged Holdings, may be deemed to
beneficially own the 5,479,771 shares of Common Stock owned in the
aggregate by Engaged Capital Flagship Master and Engaged Capital
Co-Invest XVII. As of the date hereof, Mr. Morrison and Ms.
Portwood do not beneficially own any shares of Common Stock.
1 Total shareholder returns of Wingstop Inc. (NASDAQ: WING) from
June 12, 2015 to March 13, 2022, dividends reinvested.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250303691768/en/
Longacre Square Partners Greg Marose / Ashley Areopagita,
646-386-0091 engagedcapital@longacresquare.com
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