Michelle Hook was named chief financial officer of Portillo’s in December 2020, an interesting time to take over the balance sheet of any restaurant company to be sure. Prior, she spent 17 years at Domino’s, working her way up from senior manager of corporate accounting and reporting to vice president of finance, global finance, planning, and analysis, and investor relations.
In 2013, when Hook was director of financial reporting and assistant corporate controller for the pizza chain, she was given a “Women Making Their Mark” award from the Women’s Foodservice Forum, an honor created to recognize women “poised for leadership.” Less than 10 years later, she became a statistical anomaly – a rare woman in the restaurant industry C-suite.
Of the approximately 15,000 C-suite roles at all companies in the S&P Global Total Market Index, just 11.8% are held by women. The restaurant industry reflects that number, but arguably presents an even bigger gap as a majority of foodservice workers are women – 54% compared to 47% of employees in the total U.S. employed labor force.
For Hook, reaching such an elusive level came from “doing her time” and learning as much as she could in the variety of positions that she’s held. She has a fondness for Domino’s for affording her such an opportunity, having joined the brand shortly before it went public, and she remains a shareholder to this day. But when the role at Portillo’s opened up, she jumped at the chance, knowing it was yet another opportunity to go public but with her helping to lead the way this time.
“I needed two things to leave Domino’s – a passion for the brand and a fit to the culture. You always have to take a leap of faith when making a change, but the culture is special at Portillo’s. It’s unique, different. The company retains great talent,” Hook said.
Being a leader in the company has created a bigger opportunity to help drive that culture. Hook credits having a strong base of mentors – men and women – throughout her entire career, including one who brought her on board at Domino’s. Because of this experience, she has taken a bit of a “pay it forward” mentality for emerging leaders, putting herself out there as a mentor.
If she could provide a tidy piece of advice to other women in the industry aspiring to the c-suite, it’s to accept such mentorship and to be authentic.
“Embracing mentorship is important because then you can talk to people about things you need to talk about in a safe environment,” Hook said. “It’s also important to be authentic to who you are. Just because you’re in a room full of people doesn’t mean you should change or be afraid to share thoughts or opinions. Sometimes people will bite back, and it will be uncomfortable, but that’s OK. We can have a healthy debate and a healthy conversation and learn something.”
State of the business
Although Hook fondly reflects on her extensive experience in the industry, she’s quick to return to discussing the business at hand. Portillo’s first quarter same-store sales were negative as the brand faces consumer pressures just like nearly every other restaurant company out there. Its second quarter earnings are scheduled to be reported Aug. 6. Hook outlined some of the work the chain is doing to insulate itself from increasingly weary customers, including a sharpened focus on (and more investments toward) marketing.
“We’re typically not a brand that spends a bunch on advertising and marketing. We do local, grassroots marketing. In the fourth quarter, we spent more in our core market of Chicago, our only market with true scale, and saw positive transactions and comp sales. We know there was a payback,” she said. “So, we are going to spend a little more money on advertising in the second half of the year.”
Portillo’s is also focused on speed of service and throughput at the drive-thru, knowing that every 30 seconds of improvement leads to a percentage point of comparable sales. About 40% of the business is at the drive-thru. Then there’s catering, a growing channel that has increased to about 5% of Portillo’s business. Hook said it is a strong channel and the chain is putting more resources behind it to increase awareness. The company is also driving awareness on third-party delivery platforms, including through targeted offers.
“These are incremental investments and they’re driving incrementality to the topline. Some platforms could be more pronounced than others, but overall, there is payback on the investment so we’re continuing to do that,” Hook said.
Still, the best way to drive awareness is to continue to build restaurants with the goal of reaching scale in growth markets like Texas and Florida. Scale is defined by the company as six to eight locations in a market.
“Really getting ingrained in local communities is important,” Hook said.
What is also becoming increasingly important, given the current backdrop, is having a presence in the value conversation. Portillo’s is focused on bundled meals because the company does not discount. Those meals include the Famous Five menu, featuring meal combos for less than $10.
“[Famous Five] accomplishes two things: it continues to drive awareness of what you should order when you go into a Portillo’s. If you’ve never been inside, it can be overwhelming. The menu is big, the restaurant is busy. Famous Five guides you – you order one of these five things, you can’t go wrong,” Hook said.
Famous Five also highlights entrées, as well as sides and drinks, which should help the company gain back some attachment rates that have eroded in the past couple of quarters. Portillo’s recent initiatives are simply in response to how the consumers are feeling – pinched. We’ll get a better sense of the progress here after Tuesday’s results, but Hook said finding the right solution is critical.
“In this type of environment, one of the first places consumers pull back is restaurants. Then we all start to compete for that share of stomach. Lower-income consumers are more pressured, and the industry becomes more about value in terms of sharp price points,” Hook said. “I think we’re going to continue to see that throughout the course of this year.”
Portillo’s doesn’t have the biggest budget to outshout or outspend many of the players aggressively pushing value. But Hook believes the company has some major advantages in this environment, nonetheless.
“We run world-class operations. We’re focused on not getting too aggressive on pricing,” she said. “Consumers are still willing to spend on brands they believe provide them with an overall value and we think our vast menu does that.”
Contact Alicia Kelso at [email protected]
