Activist Engaged Capital has nearly 10% stake in Portillo's, pushes for a turnaround, sources say

Activist investor Engaged Capital has built a big stake in struggling Chicago food chain Portillo’s and is pushing for change, sources said.

Activist investor Engaged Capital has built a big stake in struggling Chicago food chain Portillo's and is pushing management to make changes to how the business grows and runs, said people familiar with the matter.

Shares in Portillo's, which also offers sandwiches and burgers, are down about 25% year to date and off about 68% since its 2021 IPO. Shake Shack shares are up 67% since the company settled with the activist in May 2023, giving Engaged two board seats and staving off a proxy battle.It believes the company should no longer own and develop real estate, and should shrink the size of its current locations, according to a presentation to the board viewed by CNBC. Engaged believes the fixes could improve Portillo's restaurant cash-on-cash returns from 25% to 50%.

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