The Oak Brook-based chain's board approved the closure plan on Wednesday, according to an SEC filing cited by the Lake and McHenry County Scanner.

The company did not name which restaurants will close or which states they are in, with CFO Kevin Kalicak telling investors the timing, locations and cost cannot yet be shared while lease options are evaluated.

Shaw Local reports the closures come alongside a broader strategic plan, with CEO Brett Patterson telling Nation's Restaurant News the company faced a "hard reality: Portillo's does not deliver the returns our investors expected."

The surprising part is the reversal of fortune for a beloved Chicago brand that had been aggressively expanding beyond its home market.

According to the Lake and McHenry County Scanner, all seven restaurants Portillo's opened this year were in Texas, including one at Dallas-Fort Worth International Airport, yet Patterson said some out-of-market locations have struggled because of poor sites, new restaurants cannibalizing sales from nearby Portillo's, and low brand awareness in new markets.

He noted customers in Texas must drive long distances to reach a Portillo's while Chicago-area customers have one every couple of miles.

The move follows a July 31 layoff of about 18% of headquarters staff at the Restaurant Support Center in Oak Brook, which generated $1.4 million in restructuring charges in the third quarter.

The numbers show a mixed picture. Both outlets report third-quarter revenue of $194.1 million, up 7% from a year earlier, with net income rising to $4.8 million from $782,000 and same-restaurant sales up 1.4%.

Shaw Local adds that the average check rose 2.1% on higher menu prices while transactions fell 0.7%. Portillo's raised its full-year adjusted EBITDA forecast to $98-101 million from $92-96 million.

Yet Patterson cautioned, "While we are encouraged by the progress, one quarter does not establish a trend." The Lake and McHenry County Scanner reports the closures will bring "material cash and non-cash charges," including lease-related costs, employee separation costs and asset impairment charges.

Under the new strategy, Portillo's plans stricter site-selection standards and a smaller restaurant prototype starting in 2028 — about 4,600 square feet, more than 40% smaller than the average location, on roughly 1.5 acres instead of about 3 acres, per both outlets.

The Lake and McHenry County Scanner says the company plans four to six openings in 2027, focused on markets where it already operates, with one more opening this year on North Michigan Avenue in Chicago.

Shaw Local reports field leaders will oversee fewer restaurants, a new executive chef will oversee the menu, the chain is reviewing its Portillo's Perks loyalty program, and it targets 2% to 3% annual same-restaurant sales growth.

Chicago-area locations, including Gurnee, Vernon Hills, Deerfield, Crystal Lake and Algonquin, are unaffected.