Core Insights - El Pollo Loco introduces new Fresca Salads and Wraps, emphasizing portability and quality ingredients for on-the-go meals [1][2] - The new menu items feature two distinct flavor profiles and are available as salads in bowls or wrapped in whole wheat tortillas [2] - The Citrus Vinaigrette dressing will become a permanent menu item following the limited-time offering of the Fresca Salads and Wraps [2] Product Details - The Fresca Salads include the Citrus Avocado Fresca Salad and the Mexican Cobb Fresca Salad, both featuring fire-grilled chicken and fresh ingredients [7] - The Fresca Wraps mirror the salads, providing a convenient option for customers who prefer a portable meal [7] - Prices for the Fresca Salads and Wraps range from $9.00 to $12.00, varying by location [2] Marketing and Brand Positioning - The new items will be featured in a modernized ad campaign, showcasing a vibrant and energetic brand image [3] - El Pollo Loco has been recognized as the 1 "Best Restaurant for Quick, Healthy Food" in USA TODAY's 10 Best Readers' Choice Awards, reinforcing its commitment to quality and health [5] - The company operates over 495 restaurants across seven U.S. states and has expanded internationally with locations in the Philippines [5]

Core Insights - The article discusses the expertise of a specialized equity analyst in the restaurant sector, focusing on various dining segments in the U.S. market [1] Group 1: Company Overview - The company, Goulart's Restaurant Stocks, is dedicated to analyzing restaurant stocks across multiple segments, including QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] Group 2: Industry Engagement - The analyst actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions include columns on monetary policy, financial education, and financial modeling aimed at making these subjects accessible to a broader audience [1]

Revenue and Sales Performance - For the thirteen weeks ended March 26, 2025, total revenue was $119.2 million, with company-operated restaurant revenue at $98.4 million and franchise revenue at $20.8 million[153][154]. - For the thirteen weeks ended March 26, 2025, total revenue increased by $3.0 million, or 2.6%, to $119.2 million compared to $116.2 million for the same period in 2024[179]. - Company-operated restaurant revenue rose by $1.2 million, or 1.2%, primarily due to a 4.6% increase in average check size, despite a 3.8% decrease in transactions[180]. - Franchise revenue increased by $1.8 million, or 16.2%, driven by the rollout of a new Point of Sale (POS) system and the opening of four franchise-operated restaurants[181]. - System-wide sales reached $269.453 million for the quarter ended March 26, 2025, compared to $267.890 million for the same period in 2024, indicating a growth of approximately 0.6%[201]. Restaurant Operations - As of March 26, 2025, the company operated 174 company-operated restaurants and 325 franchised restaurants, totaling 499 locations[156]. - The company plans to complete 60-70 restaurant remodels in fiscal 2025, with an average investment of $0.3 million to $0.4 million per restaurant[157]. - The company opened two new company-operated restaurants in Nevada and two new franchised restaurants in California and Texas during fiscal 2024[151]. - Comparable restaurant sales for franchised restaurants decreased by 1.3% for the thirteen weeks ended March 26, 2025[155]. - Comparable restaurant sales growth was not explicitly stated, but the company operated 484 comparable restaurants as of March 26, 2025, compared to 478 a year earlier, suggesting a slight increase in the number of comparable locations[203]. Costs and Expenses - Labor costs are expected to increase due to California's new minimum wage law, which raises the minimum wage for fast food workers to $20 per hour starting April 1, 2024[145]. - The company anticipates ongoing inflationary pressures affecting food, labor, and construction costs, which may impact financial results[148][149]. - Food and paper costs decreased by $0.9 million, or 3.4%, with costs as a percentage of company-operated restaurant revenue at 25.2%, down from 26.4% in the prior year[183]. - Labor and related expenses increased by $1.6 million, or 5.2%, with labor costs as a percentage of company-operated restaurant revenue rising to 32.7% from 31.5%[184][185]. - Occupancy and other operating expenses increased by $1.8 million, or 7.6%, with these costs as a percentage of company-operated restaurant revenue at 26.1%, up from 24.6%[186][187]. - General and administrative expenses decreased by $0.7 million, or 5.6%, resulting in a percentage of total revenue of 9.5%, down from 10.3%[188][189]. - Franchise expenses rose by $1.8 million, or 17.4%, primarily due to IT pass-through expenses related to the new POS system[191]. Financial Performance - Net income for the quarter was $5.5 million, down from $5.9 million in the prior year, reflecting a decrease of $431,000 or 7.3%[179]. - EBITDA for the thirteen weeks ended March 26, 2025, was reported at $12.859 million, down from $13.530 million for the same period in 2024, reflecting a decrease of approximately 5%[215]. - Adjusted EBITDA for the same period was $13.925 million, compared to $15.699 million in the prior year, representing a decline of about 11.3%[215]. - The effective tax rate for the quarter ended March 26, 2025, was 29.7%, up from 27.1% for the quarter ended March 27, 2024[196]. Cash Flow and Financing - Net cash provided by operating activities decreased by approximately $6.4 million to $4.735 million for the thirteen weeks ended March 26, 2025, compared to $11.163 million in the prior year[221]. - For the thirteen weeks ended March 26, 2025, net cash used in investing activities increased by $0.7 million compared to the prior year, primarily due to increased purchases of property and equipment related to restaurant remodeling[222]. - Net cash used in financing activities changed by $5.7 million from the prior year, with share repurchases totaling $1.8 million compared to $1.2 million in the previous year[225]. - As of March 26, 2025, the company had $73.0 million in outstanding borrowings under the 2022 Revolver, with $66.7 million in borrowing availability[230]. - The interest rate range under the 2022 Revolver was 5.65% to 7.75% for the thirteen weeks ended March 26, 2025, compared to 6.92% to 6.96% for the same period in the prior year[229]. Market Conditions and Risks - Inflation has impacted costs related to food, labor, and general administrative expenses, although the company has managed to offset some increases through menu price adjustments[238]. - The company is exposed to market price fluctuations in food product prices, particularly chicken, which can materially impact food and beverage costs[239]. - The company recognized one-time costs of approximately $0.6 million related to the restructuring of certain positions in the organization[224].

Core Insights - El Pollo Loco is launching a comprehensive brand refresh on May 15, 2025, focusing on its Fire-Grilled Chicken offerings while enhancing its visual identity and customer experience [1][4][6] Brand Strategy - The brand refresh is part of a three-year turnaround strategy initiated by CEO Liz Williams since March 2024, which includes strengthening the leadership team and engaging a new creative agency, Innocean USA [2][6] - The new tagline "Let's Get Loco™" aims to connect with both new and existing customers, emphasizing the brand's heritage and passion [3][4] Customer Experience Enhancements - Updated consumer touchpoints will feature new color schemes, fonts, and layouts, creating a unified experience across digital and in-store platforms [4][5] - Over 200 restaurants have introduced kiosks for a more autonomous digital ordering experience, alongside traditional cashier services [5] Restaurant Design - A new restaurant prototype was unveiled in October 2024, showcasing a modern design while retaining key brand elements, aimed at enhancing visual identity and operational efficiency [5][6] Market Position - El Pollo Loco is recognized as the leading fire-grilled chicken restaurant in the U.S., with over 495 locations across seven states and international presence in the Philippines [7]

Financial Performance - El Pollo Loco Holdings reported revenue of $119.18 million for the quarter ended March 2025, reflecting a year-over-year increase of 2.6% [1] - The earnings per share (EPS) for the same period was $0.19, down from $0.22 a year ago, indicating a decline [1] - The reported revenue exceeded the Zacks Consensus Estimate of $118.46 million by 0.61%, while the EPS fell short of the consensus estimate of $0.20 by 5% [1] Key Metrics - The company had a total of 325 franchise restaurants, slightly below the average estimate of 326 by analysts [4] - Company-owned restaurants totaled 174, which was in line with the average estimate of 173 [4] - System-wide comparable restaurant sales decreased by 0.6%, contrasting with the average analyst estimate of a 0.4% increase [4] - Total restaurants remained at 499, matching the average estimate [4] - Comparable restaurant sales for company-owned restaurants increased by 4.6%, surpassing the average estimate of 2.3% [4] - Franchise advertising fee revenue was reported at $7.63 million, slightly below the average estimate of $7.69 million, representing a year-over-year decline of 0.3% [4] - Franchise revenue reached $13.18 million, exceeding the average estimate of $11.46 million, marking a significant year-over-year increase of 16.2% [4] - Revenue from company-operated restaurants was $98.37 million, which was below the average estimate of $99.31 million, but still showed a year-over-year increase of 1.3% [4] Stock Performance - El Pollo Loco's shares have returned -10.3% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - El Pollo Loco Holdings reported quarterly earnings of $0.19 per share, missing the Zacks Consensus Estimate of $0.20 per share, and down from $0.22 per share a year ago, representing an earnings surprise of -5% [1] - The company posted revenues of $119.18 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.61%, and an increase from year-ago revenues of $116.15 million [2] - Over the last four quarters, El Pollo Loco has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - El Pollo Loco shares have lost about 19% since the beginning of the year, compared to the S&P 500's decline of -5.3% [3] - The current consensus EPS estimate for the coming quarter is $0.27 on revenues of $124.84 million, and for the current fiscal year, it is $0.92 on revenues of $494.31 million [7] Industry Outlook - The Retail - Restaurants industry, to which El Pollo Loco belongs, is currently in the bottom 19% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of El Pollo Loco's stock may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

El Pollo Loco (LOCO) Q1 2025 Earnings Call May 01, 2025 04:30 PM ET Company Participants Ira Fils - Chief Financial OfficerElizabeth Williams - CEO & DirectorAndy Barish - Managing Director Conference Call Participants Jeremy Hamblin - Senior Research AnalystJake Bartlett - Senior Equity Research Analyst Operator Good day ladies and gentlemen and thank you for standing by. Welcome to the El Polo Loco First Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed i ...

Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $119.2 million, up from $116.2 million in Q1 2024, representing a 1.7% increase [19] - Company-operated restaurant revenue increased by 1.2% to $98.4 million, driven by a 0.6% increase in comparable restaurant sales and additional sales from two new restaurant openings [19] - The effective price increase was approximately 4.4% compared to 2024 [20] - GAAP net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year [26] Business Line Data and Key Metrics Changes - Franchise revenue increased by 16.2% to $13.2 million, driven by IT pass-through revenue related to a new point of sale system and new franchise openings [20] - Comparable restaurant sales decreased by 1.3% for franchise-operated restaurants [20] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [21] Company Strategy and Development Direction - The company is focused on a brand turnaround, emphasizing long-term sustainable growth without shortcuts [5] - Upcoming initiatives include a brand relaunch and menu innovations, such as the launch of Fresca wraps and salads, and quesadillas [6][8] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [14][15] - Remodeling efforts are ongoing, with plans to remodel 60 to 70 restaurants in partnership with franchisees [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment but remains confident in the brand's long-term potential [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [22] - Wage inflation is anticipated to be between 4% to 5% for the year, with Q1 experiencing a 12% increase [23][24] Other Important Information - The company has transitioned to a new distribution partner, which is expected to enhance margins and support future growth [14] - The restaurant contribution margin for Q1 was 16%, down from 17.6% in the previous year, primarily due to labor inflation and occupancy costs [24][25] - General and administrative expenses decreased to 9.5% of total revenue, aided by prior year restructuring costs [26] Q&A Session Summary Question: Expectations for Q2 same store sales - Management noted that consumer pullback is real and expects headwinds to continue into Q2, but is focused on brand relaunch and value innovation [32][33] Question: Impact of new product launches on comp trends - The Mango Habanero product drove initial trial, and upcoming launches of Fresca wraps and quesadillas are expected to attract different consumer segments [36][38] Question: Timing of kitchen equipment rollout and labor cost impact - Equipment rollout is ongoing, with expectations of improved labor efficiency as new systems are implemented [41] Question: Regional differences in consumer behavior - Management observed similar consumer pullback across markets, with particular pressure on the Hispanic consumer segment [50][51] Question: Menu pricing expectations for the year - The company expects menu price increases to be around 3% for the year, with variations across quarters [52] Question: Development pipeline momentum - Management expressed optimism about the development pipeline, with confidence in opening at least 10 new units this year and potential for more in the following year [59][60]

Financial Performance - Total revenue for Q1 2025 was $119.2 million, an increase of 2.6% from $116.2 million in Q1 2024[6] - Net income for Q1 2025 was $5.5 million, or $0.19 per diluted share, compared to $5.9 million, or $0.19 per diluted share in Q1 2024[11] - Adjusted EBITDA for Q1 2025 was $13.9 million, down from $15.7 million in Q1 2024[6] - Total revenue increased to $119,177,000 for the thirteen weeks ended March 26, 2025, up from $116,153,000 in the prior year, reflecting a growth of 2.6%[35] - Net income for the period was $5,481,000, or $0.19 per diluted share, compared to $5,912,000 and $0.19 per diluted share in the same period last year, indicating a decrease of 7.3%[35] - Adjusted EBITDA for the thirteen weeks ended March 26, 2025, was $13,925,000, down from $15,699,000 in the same period of 2024, indicating a decrease of 11.3%[39] - Adjusted net income decreased to $5,521,000 for the thirteen weeks ended March 26, 2025, compared to $6,805,000 in the prior year, a decline of 18.9%[42] - The company incurred special legal and professional fees of $615,000 during the thirteen weeks ended March 26, 2025, which were not present in the same period of 2024[42] Revenue Breakdown - Company-operated restaurant revenue increased to $98.4 million, up 1.2% from $97.2 million in Q1 2024, driven by a 0.6% increase in comparable restaurant revenue[5] - Franchise revenue increased by 16.2% to $13.2 million, primarily due to the rollout of a new Point of Sale (POS) system[8] - Company-operated restaurant revenue for the thirteen weeks ended March 26, 2025, was $98,365,000, compared to $97,153,000 for the same period in 2024, representing a 1.2% increase[38] - Franchise revenue increased to $13,183,000 for the thirteen weeks ended March 26, 2025, from $11,348,000 in the same period of 2024, marking a growth of 16.2%[38] Operational Metrics - System-wide comparable restaurant sales decreased by 0.6%[6] - Comparable restaurant sales growth was 0.6% for the thirteen weeks ended March 26, 2025, down from 3.8% in the prior year[36] - Restaurant contribution was $15.8 million, or 16.0% of company-operated restaurant revenue, compared to $17.1 million, or 17.6% in Q1 2024[9] - The company reported a restaurant contribution margin of 16.0% for the period, compared to 17.5% in the prior year, indicating a decline in operational efficiency[35] - Restaurant contribution margin decreased to 16.0% for the thirteen weeks ended March 26, 2025, down from 17.6% in the same period of 2024[43] Debt and Assets - As of March 26, 2025, the company's outstanding debt was $73.0 million, with $4.3 million in cash and cash equivalents[12] - Total assets as of March 26, 2025, were $590,452,000, a slight decrease from $592,014,000 at the end of the previous year[36] - Total debt increased to $73,000,000 from $71,000,000, reflecting a rise in financial leverage[36] Future Plans - The company plans to open 10 to 11 new restaurants in 2025, including 9 to 10 franchised locations[13] - Capital spending is expected to be between $30.0 million and $34.0 million for 2025[13] - The company aims to continue expanding its digital business and delivery services as part of its growth strategy[29] - Forward-looking statements indicate expectations for continued growth and potential challenges related to market conditions and competition[28] Restaurant Operations - The company operated 174 restaurants at the end of the period, an increase from 172 restaurants a year earlier, while franchised restaurants remained stable at 325[36] - System-wide sales reached $269,453,000 for the thirteen weeks ended March 26, 2025, compared to $267,890,000 in the prior year, a slight increase of 0.6%[38]

Core Insights - El Pollo Loco Holdings, Inc. reported financial results for the first quarter of 2025, indicating challenges in sales and store-level profit despite some positive developments in brand initiatives [4][8]. Financial Performance - Company-operated restaurant revenue increased to $98.4 million in Q1 2025, up from $97.2 million in Q1 2024, driven by a 0.6% rise in comparable restaurant revenue and additional sales from two new restaurant openings [5]. - Franchise revenue rose by 16.2% to $13.2 million, primarily due to IT pass-through revenue from a new Point of Sale system and four new franchise-operated restaurant openings [6]. - Total revenue for the first quarter was $119.2 million, compared to $116.2 million in the previous year [8]. - Net income was $5.5 million, or $0.19 per diluted share, down from $5.9 million, also $0.19 per diluted share, in Q1 2024 [10]. Operational Metrics - System-wide comparable restaurant sales decreased by 0.6% [8]. - Restaurant contribution was $15.8 million, representing 16.0% of company-operated restaurant revenue, down from 17.6% in the previous year, largely due to increased labor costs from a minimum wage hike in California [7][8]. - Adjusted EBITDA for the quarter was $13.9 million, compared to $15.7 million in Q1 2024 [8]. Cost Structure - General and administrative expenses decreased to $11.3 million from $11.9 million, attributed to lower restructuring costs and a legal settlement [9]. - Labor and related expenses increased to $32.2 million, accounting for 32.7% of total revenue, compared to 31.5% in the previous year [34]. Future Outlook - The company plans to open 10 to 11 new restaurants in 2025, with capital spending projected between $30 million and $34 million [15]. - The estimated effective income tax rate for 2025 is expected to be between 29.0% and 29.5% [15].