Revenue Performance - Company-operated restaurant revenue for Q3 2025 was $100.7 million, a decrease of 0.5% from $101.2 million in Q3 2024[3] - Total revenue increased to $121.5 million, up from $120.4 million year-over-year[3] - System-wide comparable restaurant sales decreased by 0.8%[3] - Total revenue for the thirteen weeks ended September 24, 2025, was $121.52 million, a slight increase from $120.40 million for the same period in 2024, representing a growth of 0.9%[33] - Company-operated restaurant revenue was $100.72 million, accounting for 82.9% of total revenue, compared to $101.18 million (84.0%) in the prior year[33] - Franchise revenue increased to $12.86 million (10.6% of total revenue) from $11.33 million (9.4%) year-over-year[33] - Total revenue for the thirty-nine weeks ended September 24, 2025, reached $366,531,000, compared to $358,724,000 for the same period in 2024, indicating a 2.2% growth[41] Net Income and Earnings - Net income for Q3 2025 was $7.4 million, or $0.25 per diluted share, compared to $6.2 million, or $0.21 per diluted share in Q3 2024[8] - Adjusted net income was $7.8 million, or $0.27 per diluted share, compared to $6.3 million, or $0.21 per diluted share in the prior year[8] - Net income for the thirteen weeks ended September 24, 2025, was $7.36 million, up from $6.19 million in the same period last year, reflecting a growth of 18.9%[33] - Adjusted net income for the thirty-nine weeks ended September 24, 2025, was $21,588,000, compared to $20,898,000 for the same period in 2024, a 3.3% increase[40] Operational Metrics - Restaurant contribution was $18.5 million, representing 18.3% of company-operated restaurant revenue, up from 16.7% in Q3 2024[6] - Comparable restaurant sales growth for company-operated restaurants was 0.2%, a decline from 3.2% in the prior year[34] - Adjusted EBITDA for the thirteen weeks ended September 24, 2025, was $17,418,000, compared to $15,452,000 for the same period in 2024, representing a 12.7% increase[37] - Restaurant contribution margin for the thirteen weeks ended September 24, 2025, was 18.3%, compared to 16.7% in the same period of 2024, showing an improvement of 1.6 percentage points[41] Debt and Cash Position - As of September 24, 2025, the company's outstanding debt was $61.0 million, with $10.9 million in cash and cash equivalents[9] - Total debt decreased to $61.00 million from $71.00 million, reflecting a reduction of 14.1%[34] - Cash and cash equivalents as of September 24, 2025, were $10.87 million, significantly higher than $2.48 million as of December 25, 2024[34] Future Plans and Expansion - The company plans to open at least ten new system-wide restaurants in 2025[11] - Capital spending is expected to be between $28.0 million and $30.0 million for the remainder of 2025[11] Challenges and Risks - Forward-looking statements indicate potential risks including competition, economic conditions, and supply chain challenges[26][27] - The company faces challenges related to labor costs and regulatory compliance impacting its operations[28] - Risks include potential liabilities from environmental laws and the impact of government regulations[28] Company Overview - El Pollo Loco operates over 495 company-owned and franchised restaurants across seven U.S. states and has eight licensed locations in the Philippines[25] - The company emphasizes inclusivity with a workforce of over 4,000 employees[25] - The company aims to expand its digital business, delivery orders, and catering services[27] - El Pollo Loco's financial performance is subject to fluctuations due to seasonality and economic factors[28] - There is a focus on achieving social and environmental sustainability goals[28] - The company has a commitment to transparency regarding its financial condition and operational results[30] - Non-GAAP financial measures such as System-wide sales and Adjusted EBITDA are used to evaluate operational performance[30][31]

Core Insights - El Pollo Loco Holdings, Inc. reported its financial results for the third quarter ended September 24, 2025, highlighting both challenges and growth opportunities within the business [1][4]. Financial Performance - Company-operated restaurant revenue decreased to $100.7 million, down from $101.2 million in the same quarter of 2024, primarily due to a 1.1% decline in comparable restaurant revenue [5]. - Franchise revenue increased by 13.5% to $12.9 million, driven by new franchise openings and IT pass-through revenue related to a new Point of Sale system [6]. - Total revenue for the quarter was $121.5 million, compared to $120.4 million in the prior year [8]. - Net income rose to $7.4 million, or $0.25 per diluted share, compared to $6.2 million, or $0.21 per diluted share, in the same quarter of 2024 [10]. Operational Highlights - The company opened its 500th restaurant and plans to nearly double unit openings in the next year [4]. - Comparable restaurant sales decreased by 0.8%, with a 1.3% decline in average check size, partially offset by a 0.1% increase in transactions [5][8]. - Restaurant contribution increased to $18.5 million, representing 18.3% of company-operated restaurant revenue, up from 16.7% in the prior year [7]. Cost Management - General and administrative expenses rose to $12.3 million, primarily due to increases in stock compensation and legal fees related to shareholder activism [8][9]. - The company achieved margin expansion at both the restaurant and corporate levels through operational efficiencies and higher menu prices [4]. Debt and Cash Position - As of September 24, 2025, the company had an outstanding debt balance of $61.0 million and $10.9 million in cash and cash equivalents [11]. - Subsequent to the quarter-end, an additional $6.0 million was paid down on its revolving credit facility, reducing outstanding borrowings to $55.0 million [12]. Future Outlook - The company anticipates capital spending between $28.0 million and $30.0 million for the remainder of 2025, with expectations to open at least ten new restaurants [16].

Core Viewpoint - El Pollo Loco Holdings, Inc. will host a conference call to discuss its third quarter 2025 financial results on October 30, 2025, at 4:30 PM Eastern Time, led by CEO Liz Williams and CFO Ira Fils [1] Group 1: Conference Call Details - The conference call can be accessed live by dialing 201-493-6780, with a replay available until November 13, 2025, using the passcode 13755803 [2] - The call will also be webcast live on the company's corporate website, with an archive available shortly after the call [3] Group 2: Company Overview - El Pollo Loco is a leading fire-grilled chicken restaurant in the U.S., known for its flavorful and healthier offerings, with a menu featuring innovative meals made daily using quality ingredients [4] - The company operates approximately 500 company-owned and franchised restaurants across seven U.S. states and has eight licensed locations in the Philippines [4]

Core Insights - El Pollo Loco has opened its 500th restaurant, marking a significant milestone in the company's growth and expansion during its 50th anniversary year [1][2] - The new location in Colorado Springs is part of a broader strategy to expand outside California, with 10 new openings planned for 2025 [2][3] - The company is experiencing strong interest from franchisees, indicating confidence in its brand and growth potential [3] Expansion and Growth - The opening of the 500th restaurant reflects El Pollo Loco's evolution from a regional favorite to a brand with national growth momentum [2] - The company has a robust development pipeline, with additional restaurants under construction in cities like El Paso, Dallas, Albuquerque, and the Greater Seattle area [3] - El Pollo Loco aims to further expand its U.S. footprint in 2025 and beyond, with a focus on both current and emerging markets [7] Marketing and Brand Strategy - The brand launched the Let's Get Loco™ manifesto video to celebrate its 50th anniversary, emphasizing its commitment to fire-grilled chicken and bold flavors [4] - Menu innovations include new offerings such as Mango Habanero Chicken and expanded quesadilla options, aimed at enhancing customer appeal [5] - El Pollo Loco has engaged in cultural activations by partnering with athletes to introduce its products to new audiences [6] Company Overview - El Pollo Loco is recognized as the leading fire-grilled chicken restaurant in the U.S., known for its flavorful and healthier offerings [8] - The company operates over 500 locations across several states and has expanded internationally with licensed locations in the Philippines [9]

Core Insights - El Pollo Loco has launched two new Double Chicken Burrito Bowls, the Queso Crunch Burrito Bowl and the Street Corn Burrito Bowl, aimed at providing hearty and satisfying meal options [2][9] - The new offerings emphasize bold flavors and generous portions, featuring the brand's signature fire-grilled chicken and quality ingredients [1][3] Product Details - The Queso Crunch Burrito Bowl includes a double portion of fire-grilled chicken, pinto beans, seasoned rice, queso blanco, Jack cheese, guacamole, cilantro, and salsa, with prices starting at $11.79 for a la carte and $14.59 for a combo [8] - The Street Corn Burrito Bowl features similar ingredients but adds corn, red peppers, creamy chipotle sauce, and cotija cheese, with the same pricing structure as the Queso Crunch Bowl [8] Marketing Strategy - The Chief Marketing Officer stated that the new bowls are designed to be craveable and distinct from typical burrito bowls, reinforcing the brand's commitment to quality and flavor [3] - In addition to the burrito bowls, El Pollo Loco is introducing the Fam Feast, a meal deal starting at $29.99, designed for sharing and featuring eight pieces of chicken and large sides [3] Company Background - El Pollo Loco is recognized as the leading fire-grilled chicken restaurant in the U.S., with over 500 locations and a commitment to quality and healthier meal options [5] - The company has been acknowledged for its innovative menu and inclusive workplace culture, reflecting its dedication to community and employee engagement [5]

Core Insights - El Pollo Loco Holdings, Inc. showed positive signs in Q2 2025 with revenues of $125.8 million, a 3% year-over-year increase, and adjusted earnings per share of 28 cents, surpassing estimates [1][10] - System-wide traffic increased by 0.8%, indicating a sequential improvement after a slow start to the year [1][10] Strategic Initiatives - The company's turnaround is driven by a mix of innovation and value, with new menu items like Fresca Salads and premium quesadillas attracting both existing and new customers [2] - Targeted discounting strategies, such as Taco Tuesday and app-only promotions, have increased visits without compromising core pricing power, reflecting a disciplined approach to value [2] Operational Performance - Restaurant-level operating margins improved to 19.1% from 18.6% year-over-year, supported by labor efficiency and modest commodity relief [3] - Franchise traffic growth of 1.5% highlights the brand's resilience, despite a slight softening in average checks [3] Future Outlook - The company's future momentum may depend on sustaining traffic growth in a challenging macroeconomic environment, with management optimistic about brand relaunches and new product pipelines [4] - July trends were mixed, raising questions about the sustainability of traffic gains translating into long-term comparable store sales growth [4] Competitive Landscape - El Pollo Loco operates in a competitive quick-service and fast-casual chicken segment, facing strong competition from Wingstop Inc. and Chipotle Mexican Grill, both of which are showing resilience [5][6] - Wingstop has demonstrated robust same-store sales growth through digital engagement and international expansion, while Chipotle leverages menu innovation and loyalty promotions [5][6] Valuation and Performance - El Pollo Loco's shares have decreased by 2.8% over the past six months, compared to an 8.9% decline in the industry [8] - The company is currently priced at a forward 12-month price-to-earnings ratio of 10.9, which is below the industry average, indicating potential value [13]

Core Points - El Pollo Loco is celebrating National Chicken Month with a promotional campaign that includes a BOGO (Buy One Get One) offer and a chance to win free chicken for life through a creative challenge [1][2] - The company is giving away up to $1 million worth of fire-grilled chicken as part of this initiative [1][6] - The BOGO offer is available for Loco Rewards Members on September 9, allowing them to receive a free 2-Piece Leg & Thigh Meal with the purchase of another [2][5] Promotional Details - The BOGO deal is valid all day on September 9 while supplies last and until the $1 million redemption cap is reached [2] - The Loco AI chicken content creation challenge invites participants to create and share original content inspired by fire-grilled chicken for a chance to win free chicken for life [2][5] - The free chicken for life prize is valued at approximately $22,984, awarded in the form of gift cards for one meal per week for 50 years [5] Company Background - El Pollo Loco is recognized as the leading fire-grilled chicken restaurant in the U.S., known for its flavorful and healthier offerings [4] - The company operates over 495 restaurants across seven U.S. states and has expanded internationally with locations in the Philippines [4] - El Pollo Loco has been acknowledged as the 1 "Best Restaurant for Quick, Healthy Food" in USA TODAY's 10 Best Readers' Choice Awards [4]

Group 1 - The stock market is currently rising, but it is not aligned with the challenging macroeconomic conditions, particularly affecting consumer sentiment [1] - The restaurant sector is experiencing significant pressure as consumers feel increasingly financially strained [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to insights on industry trends [1]

Group 1 - El Pollo Loco Holdings (LOCO) shares have increased by 1% over the past four weeks, closing at $10.69, with a mean price target of $13.75 indicating a potential upside of 28.6% [1] - The mean estimate consists of four short-term price targets with a standard deviation of $2.99, where the lowest estimate is $11.00 (2.9% increase) and the highest is $18.00 (68.4% increase) [2] - Analysts show strong agreement on LOCO's ability to report better earnings, with a positive trend in earnings estimate revisions correlating with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for LOCO has risen by 2.7% over the past month, with two estimates increasing and no negative revisions [12] - LOCO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide guidance on the direction of price movement [14]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) This section provides unaudited condensed consolidated financial statements, offering a detailed overview of the company's financial position, performance, and cash flows [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Condensed Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 25, 2025 | December 25, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $8,989 | $2,484 | +$6,505 | | Total current assets | $26,819 | $19,895 | +$6,924 | | Total assets | $596,777 | $592,014 | +$4,763 | | Total current liabilities | $76,776 | $75,658 | +$1,118 | | Total liabilities | $322,599 | $331,345 | -$8,746 | | Total stockholders' equity | $274,178 | $260,669 | +$13,509 | [Condensed Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) Condensed Consolidated Statements of Income Highlights (Amounts in thousands) | Metric | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | Change (%) | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | $125,834 | $122,176 | +3.0% | $245,011 | $238,329 | +2.8% | | Income from operations | $11,305 | $12,318 | -8.2% | $20,277 | $21,997 | -7.8% | | Net income | $7,107 | $7,633 | -6.9% | $12,588 | $13,545 | -7.1% | | Basic EPS | $0.24 | $0.25 | -4.0% | $0.43 | $0.44 | -2.3% | | Diluted EPS | $0.24 | $0.25 | -4.0% | $0.43 | $0.44 | -2.3% | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) Changes in Stockholders' Equity (26 Weeks Ended June 25, 2025, Amounts in thousands) | Item | Amount | | :--- | :--- | | Balance, December 25, 2024 | $260,669 | | Stock-based compensation | $2,747 | | Repurchase of common stock | $(1,843) | | Net income | $12,588 | | Balance, June 25, 2025 | $274,178 | - Total stockholders' equity increased from **$260,669 thousand** at December 25, 2024, to **$274,178 thousand** at June 25, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Condensed Consolidated Statements of Cash Flows Highlights (26 Weeks Ended, Amounts in thousands) | Activity | June 25, 2025 | June 26, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $18,872 | $28,117 | -$9,245 | | Net cash used in investing activities | $(8,427) | $(10,546) | +$2,119 | | Net cash used in financing activities | $(3,940) | $(14,394) | +$10,454 | | Increase in cash and cash equivalents | $6,505 | $3,177 | +$3,328 | | Cash and cash equivalents, end of period | $8,989 | $10,465 | -$1,476 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=1.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - As of June 25, 2025, the Company operated **174** and franchised **325** El Pollo Loco restaurants in the United States, and licensed **eight** restaurants in the Philippines[21](index=21&type=chunk) - Fiscal **2025** is a **53-week** year ending on December 31, 2025, while Fiscal **2024** was a **52-week** year[23](index=23&type=chunk) - The Company believes its cash flow from operations, available cash of **$9.0 million**, and borrowing availability under the **2022** Revolver are adequate for liquidity needs for the next twelve months[31](index=31&type=chunk) - Subsequent to quarter-end, the Company paid down an additional **$1.0 million** on its **2022** Revolver, reducing outstanding borrowings to **$68.0 million** as of July 31, 2025[32](index=32&type=chunk) - Restaurants in the greater Los Angeles area generated approximately **71.7%** of total revenue for both the thirteen and twenty-six weeks ended June 25, 2025[36](index=36&type=chunk) - No indicators of potential impairment for goodwill and indefinite-lived intangible assets were found during the thirteen and twenty-six weeks ended June 25, 2025[45](index=45&type=chunk) Income Tax Provision and Effective Tax Rate | Period | Income Tax Provision (in thousands) | Estimated Effective Tax Rate | | :--- | :--- | :--- | | 13 Weeks Ended June 25, 2025 | $2,991 | 29.6% | | 13 Weeks Ended June 26, 2024 | $3,158 | 29.3% | | 26 Weeks Ended June 25, 2025 | $5,306 | 29.7% | | 26 Weeks Ended June 26, 2024 | $5,361 | 28.4% | [2. Prepaid Expenses and Other Current Assets](index=18&type=section&id=2.%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid Expenses and Other Current Assets (Amounts in thousands) | Item | June 25, 2025 | December 25, 2024 | | :--- | :--- | :--- | | Prepaid insurance | $1,245 | $2,574 | | Prepaid service fees | $1,371 | $2,255 | | Other current assets | $1,053 | $680 | | **Total** | **$3,669** | **$5,509** | [3. Property and Equipment](index=20&type=section&id=3.%20PROPERTY%20AND%20EQUIPMENT) Property and Equipment, Net (Amounts in thousands) | Item | June 25, 2025 | December 25, 2024 | | :--- | :--- | :--- | | Land | $12,323 | $12,323 | | Buildings and improvements | $154,076 | $152,410 | | Other property and equipment | $94,036 | $91,352 | | Construction in progress | $12,656 | $9,882 | | Less: accumulated depreciation and amortization | $(186,265) | $(179,818) | | **Total property and equipment, net** | **$86,826** | **$86,149** | Depreciation and Amortization Expense (Amounts in thousands) | Period | Amount | | :--- | :--- | | 13 Weeks Ended June 25, 2025 | $3,929 | | 13 Weeks Ended June 26, 2024 | $3,870 | | 26 Weeks Ended June 25, 2025 | $7,816 | | 26 Weeks Ended June 26, 2024 | $7,721 | - No non-cash impairment charges were recorded for property and equipment for the thirteen and twenty-six weeks ended June 25, 2025, and June 26, 2024[64](index=64&type=chunk) [4. Stock-Based Compensation](index=20&type=section&id=4.%20STOCK-BASED%20COMPENSATION) - The aggregate share limit under the Incentive Plan was increased by **1,250,000** shares to a total of **4,500,000** shares, with **1,397,957** shares remaining available for issuance as of June 25, 2025[65](index=65&type=chunk) Stock Options Outstanding (June 25, 2025) | Status | Shares | Weighted-Average Exercise Price | | :--- | :--- | :--- | | Outstanding | 1,437,961 | $10.42 | | Vested and expected to vest | 1,421,025 | $10.42 | | Exercisable | 465,605 | $10.62 | - Total unrecognized compensation expense related to unvested stock options was **$4.4 million**, expected to be recognized over **2.75** years[68](index=68&type=chunk) - Total unrecognized compensation expense related to unvested restricted shares was **$6.9 million**, expected to be recognized over **2.47** years[70](index=70&type=chunk) Total Stock-Based Compensation Expense (Amounts in thousands) | Period | Amount | | :--- | :--- | | 13 Weeks Ended June 25, 2025 | $1,700 | | 13 Weeks Ended June 26, 2024 | $897 | | 26 Weeks Ended June 25, 2025 | $2,747 | | 26 Weeks Ended June 26, 2024 | $1,817 | - The Share Repurchase Program, authorizing up to **$20,000,000** in common stock repurchases, expired on March 31, 2025[73](index=73&type=chunk) - For the twenty-six weeks ended June 25, 2025, the Company repurchased **163,229** shares of common stock for approximately **$1.8 million** under the Share Repurchase Program[74](index=74&type=chunk) [5. Long-Term Debt](index=24&type=section&id=5.%20LONG-TERM%20DEBT) - The Company's **2022** Revolver is a **$150.0 million** five-year senior secured revolving credit facility, maturing on July 27, 2027[75](index=75&type=chunk)[80](index=80&type=chunk) - As of June 25, 2025, outstanding borrowings under the **2022** Revolver totaled **$69.0 million**, with **$70.7 million** in borrowing availability (after **$10.3 million** in letters of credit)[79](index=79&type=chunk) - The interest rate range under the **2022** Revolver was **5.65%** to **7.75%** for the twenty-six weeks ended June 25, 2025[78](index=78&type=chunk) - The Company was in compliance with all financial covenants as of June 25, 2025[79](index=79&type=chunk) - For the twenty-six weeks ended June 25, 2025, the Company borrowed **$8.0 million** and paid down **$10.0 million** on the **2022** Revolver[80](index=80&type=chunk) [6. Other Accrued Expenses and Current Liabilities](index=26&type=section&id=6.%20OTHER%20ACCRUED%20EXPENSES%20AND%20CURRENT%20LIABILITIES) Other Accrued Expenses and Current Liabilities (Amounts in thousands) | Item | June 25, 2025 | December 25, 2024 | | :--- | :--- | :--- | | Accrued sales and property taxes | $4,599 | $5,349 | | Gift card liability | $4,797 | $5,100 | | Loyalty rewards program liability | $977 | $844 | | Accrued advertising | $0 | $1,194 | | Accrued legal settlements and professional fees | $1,427 | $463 | | Deferred franchise and development fees | $547 | $539 | | Other | $2,546 | $2,407 | | **Total** | **$14,893** | **$15,896** | [7. Other Noncurrent Liabilities](index=26&type=section&id=7.%20OTHER%20NONCURRENT%20LIABILITIES) Other Noncurrent Liabilities (Amounts in thousands) | Item | June 25, 2025 | December 25, 2024 | | :--- | :--- | :--- | | Deferred franchise and development fees | $6,132 | $6,191 | | Other | $27 | $27 | | **Total** | **$6,159** | **$6,218** | [8. Commitments and Contingencies](index=26&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is involved in various claims, such as wage and hour and other legal actions, but does not believe their ultimate resolution will have a material adverse effect on its financial position[83](index=83&type=chunk) - The Company has long-term beverage supply agreements extending through the end of **2032**, which provide marketing rebates[84](index=84&type=chunk) - As of June 25, 2025, the Company's total estimated commitment to purchase chicken was **$11.8 million**[85](index=85&type=chunk) - The Company is contingently liable on **three** lease agreements from the sale of company-operated restaurants to franchisees, with a potential undiscounted amount of **$3.7 million** as of June 25, 2025[86](index=86&type=chunk) [9. Earnings Per Share](index=28&type=section&id=9.%20EARNINGS%20PER%20SHARE) Basic and Diluted EPS Data | Metric | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $7,107 | $7,633 | $12,588 | $13,545 | | Weighted-average shares outstanding—basic | 29,097,871 | 30,240,170 | 29,092,409 | 30,508,970 | | Weighted-average shares outstanding—diluted | 29,272,394 | 30,378,048 | 29,314,443 | 30,661,830 | | Net income per share—basic | $0.24 | $0.25 | $0.43 | $0.44 | | Net income per share—diluted | $0.24 | $0.25 | $0.43 | $0.44 | [10. Related Party Transactions](index=28&type=section&id=10.%20RELATED%20PARTY%20TRANSACTIONS) - No related party transactions were reported for the periods presented[91](index=91&type=chunk) [11. Revenue from Contracts with Customers](index=28&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) - The Company's revenue streams include company-operated restaurant revenue, franchise revenue (royalties, initial fees, license fees, IT support, rental income), and franchise advertising fee revenue[92](index=92&type=chunk)[99](index=99&type=chunk) - As of June 25, 2025, the revenue allocated to loyalty points that had not been redeemed was **$1.0 million**, expected to be recognized within one year[95](index=95&type=chunk)[96](index=96&type=chunk) - The gift card liability was **$4,797 thousand** as of June 25, 2025, down from **$5,100 thousand** at December 25, 2024[98](index=98&type=chunk) Company-Operated Revenue Disaggregated by Geographic Market | Market | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Greater Los Angeles area | 71.7% | 71.8% | 71.7% | 71.7% | | Other markets | 28.3% | 28.2% | 28.3% | 28.3% | | **Total** | **100%** | **100%** | **100%** | **100%** | Estimated Future Franchise Revenue from Unsatisfied Obligations (Amounts in thousands) | Year | Amount | | :--- | :--- | | 2025 | $282 | | 2026 | $544 | | 2027 | $535 | | 2028 | $506 | | 2029 | $481 | | Thereafter | $4,331 | | **Total** | **$6,679** | [12. Leases](index=34&type=section&id=12.%20Leases) - The majority of building and facilities leases are classified as operating leases, while one facility and **24** equipment leases are classified as finance leases[116](index=116&type=chunk) - During the twenty-six weeks ended June 25, 2025, the Company reassessed lease terms on **nine** restaurants, resulting in an additional **$7.1 million** of ROU assets and lease liabilities[119](index=119&type=chunk) Total Lease Cost (Amounts in thousands) | Category | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Finance lease cost | $62 | $79 | $125 | $113 | | Operating lease cost | $6,076 | $5,968 | $12,112 | $11,801 | | Sublease income | $(1,748) | $(1,758) | $(3,463) | $(3,537) | | **Total lease cost** | **$6,138** | **$6,047** | **$12,274** | **$11,914** | Present Value of Lease Obligations (June 25, 2025, Amounts in thousands) | Lease Type | Present Value | | :--- | :--- | | Finance Leases | $1,667 | | Operating Leases | $187,649 | Weighted-Average Lease Terms and Discount Rates (June 25, 2025) | Lease Type | Remaining Lease Term (Years) | Discount Rate | | :--- | :--- | :--- | | Finance Leases (Property) | 15.38 | 2.57% | | Finance Leases (Equipment) | 2.95 | 6.87% | | Operating Leases (Property) | 9.81 | 5.36% | | Operating Leases (Equipment) | 3.29 | 6.72% | [13. Shareholder Rights Agreement](index=41&type=section&id=13.%20Shareholder%20Rights%20Agreement) - The Shareholder Rights Agreement, initially declared on August 8, 2023, was amended to extend its expiration date[131](index=131&type=chunk)[132](index=132&type=chunk) - The Amended Rights Agreement expired and was terminated by its terms on May 30, 2025[133](index=133&type=chunk) [14. Segment Reporting](index=41&type=section&id=14.%20Segment%20Reporting) - The Company has one operating segment and one reportable segment[136](index=136&type=chunk) - The Chief Executive Officer, as the Chief Operating Decision Maker (CODM), reviews total revenues, segment expenses, consolidated net income, restaurant contribution margin, and Adjusted EBITDA to assess performance and allocate resources[137](index=137&type=chunk)[138](index=138&type=chunk) Total Revenue and Segment Net Income (Amounts in thousands) | Metric | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $125,834 | $122,176 | $245,011 | $238,329 | | Total segment net income | $7,107 | $7,633 | $12,588 | $13,545 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial condition, results of operations, and cash flows [Cautionary Statement Concerning Forward-Looking Statements](index=44&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations[144](index=144&type=chunk) - Key risk factors include the ability to open new restaurants, competition, global economic conditions (inflation, unemployment), labor costs (AB 1228), food and supply costs, and social media impact[145](index=145&type=chunk)[150](index=150&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statement[147](index=147&type=chunk) [Overview](index=46&type=section&id=Overview) - El Pollo Loco is a quick-service restaurant concept specializing in fire-grilled citrus-marinated chicken and Mexican-inspired entrees[148](index=148&type=chunk) - In **2025**, the company launched a brand refresh, including a new advertising campaign, restaurant design, new products, and an emphasis on hospitality, reinforcing its position of 'Quality Chicken, Fast & Easy'[148](index=148&type=chunk) [Market Trends and Uncertainties](index=46&type=section&id=Market%20Trends%20and%20Uncertainties) - California's AB **1228** increased the minimum wage at fast food restaurants to **$20** an hour on April 1, 2024, leading to increased labor and regulatory compliance costs[149](index=149&type=chunk)[151](index=151&type=chunk) - The company has substantially offset cost pressures through menu price increases, menu mix management, and productivity improvements, but expects these pressures to continue[151](index=151&type=chunk)[152](index=152&type=chunk) - Macroeconomic challenges like inflationary pressures and changes in trade policies (tariffs) may adversely affect food, labor, and construction costs[152](index=152&type=chunk)[153](index=153&type=chunk) - Revenue per restaurant is typically lower in the first and fourth quarters and higher in the second and third quarters due to seasonality[154](index=154&type=chunk) [Growth Strategies and Outlook](index=48&type=section&id=Growth%20Strategies%20and%20Outlook) - As of June 25, 2025, the company had **499** locations in seven states[155](index=155&type=chunk) - For the twenty-six weeks ended June 25, 2025, franchisees opened **one** new restaurant in Arizona and **two** in California, while closing **two** in California; the company acquired **one** restaurant in California[155](index=155&type=chunk) - The company plans to expand its business and drive sales growth through five key strategies: Brand That Wins, Hospitality Mindset, Digital First, Winning Unit Economics, and Drive Unit Growth Again with National Expansion[158](index=158&type=chunk) [Highlights and Trends](index=48&type=section&id=Highlights%20and%20Trends) [Revenue Overview](index=48&type=section&id=Revenue%20Overview) Total Revenue (Amounts in millions) | Period | Total Revenue | | :--- | :--- | | 13 Weeks Ended June 25, 2025 | $125.8 | | 26 Weeks Ended June 25, 2025 | $245.0 | Revenue Breakdown (Amounts in millions) | Revenue Type | 13 Weeks Ended June 25, 2025 | 26 Weeks Ended June 25, 2025 | | :--- | :--- | :--- | | Company-operated restaurant revenue | $104.3 | $202.7 | | Franchise and franchise advertising fee revenue | $21.5 | $42.3 | [Comparable Restaurant Sales](index=50&type=section&id=Comparable%20Restaurant%20Sales) Comparable Restaurant Sales Growth (YoY) | Category | 13 Weeks Ended June 25, 2025 | 26 Weeks Ended June 25, 2025 | | :--- | :--- | :--- | | System-wide | -0.3% | -0.4% | | Company-operated | +1.2% | +0.9% | | Franchised | -1.1% | -1.2% | - For company-operated restaurants, the **13-week** comparable sales increase was due to a **1.5%** increase in average check size, partially offset by a **0.3%** decrease in transactions[161](index=161&type=chunk) - For company-operated restaurants, the **26-week** comparable sales increase was due to a **3.0%** increase in average check size, partially offset by a **2.0%** decrease in transactions[161](index=161&type=chunk) [Restaurant Development](index=50&type=section&id=Restaurant%20Development) Restaurant Activity (26 Weeks Ended June 25, 2025) | Category | Beginning of Period | Openings | Acquisitions/Sales | Closures | End of Period | | :--- | :--- | :--- | :--- | :--- | :--- | | Company-operated | 173 | 0 | +1 (acquisition) | 0 | 174 | | Franchised | 325 | 3 | -1 (sale to company) | 2 | 325 | | System-wide | 498 | 3 | 0 | 2 | 499 | - The restaurant count excludes **eight** licensed restaurants in the Philippines[162](index=162&type=chunk) [Restaurant Remodeling](index=50&type=section&id=Restaurant%20Remodeling) - The company completed **20** company-operated and franchise remodels during the twenty-six weeks ended June 25, 2025[163](index=163&type=chunk) - The company expects to complete **55-65** additional remodels for the remainder of fiscal **2025**, with an average investment of approximately **$0.4 million** per restaurant[163](index=163&type=chunk) [Loco Rewards](index=50&type=section&id=Loco%20Rewards) - The Loco Rewards loyalty program had over **4.5 million** members as of June 25, 2025[167](index=167&type=chunk) - Revenue allocated to loyalty points not yet redeemed was **$1.0 million** as of June 25, 2025, up from **$0.8 million** at December 25, 2024[167](index=167&type=chunk) - Loyalty points expire if not earned or used within a one-year period[166](index=166&type=chunk) [Critical Accounting Policies and Use of Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) - The preparation of condensed consolidated financial statements requires management to make significant estimates and judgments[168](index=168&type=chunk) - There have been no material changes to critical accounting policies or uses of estimates since the Annual Report on Form 10-K for the year ended December 25, 2024[170](index=170&type=chunk) [Key Financial Definitions](index=52&type=section&id=Key%20Financial%20Definitions) - Revenue is derived from company-operated restaurant revenue, franchise revenue (royalties, fees, sublease income), and franchise advertising fee revenue[171](index=171&type=chunk) - Labor and related expenses include wages, payroll taxes, workers' compensation, benefits, and bonuses, influenced by minimum wage and other labor laws (e.g., California's AB **1228**)[173](index=173&type=chunk)[175](index=175&type=chunk) - Impairment and closed-store reserves involve reviewing long-lived assets for impairment based on undiscounted future cash flows and amortizing ROU assets for closed restaurants[181](index=181&type=chunk)[182](index=182&type=chunk) [Comparison of Results of Operations](index=56&type=section&id=Comparison%20of%20Results%20of%20Operations) [Company-Operated Restaurant Revenue](index=58&type=section&id=Company-Operated%20Restaurant%20Revenue) - Company-operated restaurant revenue increased by **$2.0 million** (**2.0%**) for the **13** weeks and **$3.2 million** (**1.6%**) for the **26** weeks ended June 25, 2025, compared to the prior year[191](index=191&type=chunk)[192](index=192&type=chunk) - The increase was mainly due to higher comparable restaurant revenue (**1.2%** for **13** weeks, **0.9%** for **26** weeks) and additional sales from new restaurant openings[191](index=191&type=chunk)[192](index=192&type=chunk) - Comparable restaurant sales increases were driven by higher average check sizes (**1.5%** for **13** weeks, **3.0%** for **26** weeks), partially offset by transaction decreases (**0.3%** for **13** weeks, **2.0%** for **26** weeks)[191](index=191&type=chunk)[192](index=192&type=chunk) [Franchise Revenue](index=58&type=section&id=Franchise%20Revenue) - Franchise revenue increased by **$1.7 million** (**14.8%**) for the **13** weeks and **$3.6 million** (**15.5%**) for the **26** weeks ended June 25, 2025, compared to the prior year[193](index=193&type=chunk)[194](index=194&type=chunk) - The increase was primarily due to **$1.6 million** (**13** weeks) and **$3.4 million** (**26** weeks) in franchisee IT pass-through revenue related to a new Point of Sale (POS) system rollout, and five new franchise restaurant openings[193](index=193&type=chunk)[194](index=194&type=chunk) - This increase was partially offset by a franchise comparable restaurant sales decrease of **1.1%** (**13** weeks) and **1.2%** (**26** weeks)[193](index=193&type=chunk)[194](index=194&type=chunk) [Franchise Advertising Fee Revenue](index=58&type=section&id=Franchise%20Advertising%20Fee%20Revenue) - Franchise advertising fee revenue decreased by less than **$0.1 million** (**0.9%**) for the **13** weeks and **$0.1 million** (**0.6%**) for the **26** weeks ended June 25, 2025[195](index=195&type=chunk)[196](index=196&type=chunk) - Fluctuations were due to changes in franchisees' revenue, as advertising fees are a percentage of their sales[196](index=196&type=chunk) [Food and Paper Costs](index=60&type=section&id=Food%20and%20Paper%20Costs) - Food and paper costs decreased by **$0.2 million** (**0.9%**) for the **13** weeks and **$1.1 million** (**2.2%**) for the **26** weeks ended June 25, 2025[198](index=198&type=chunk) - The decrease was primarily due to a lower number of transactions, cost-management initiatives, and commodity deflation[199](index=199&type=chunk) - As a percentage of company-operated restaurant revenue, food and paper costs decreased from **25.2%** to **24.5%** for the **13** weeks and from **25.7%** to **24.8%** for the **26** weeks[199](index=199&type=chunk) [Labor and Related Expenses](index=60&type=section&id=Labor%20and%20Related%20Expenses) - Labor and related expenses decreased by **$0.7 million** (**2.2%**) for the **13** weeks, primarily due to **$1.0 million** in improved labor efficiencies[200](index=200&type=chunk) - Labor and related expenses increased by **$0.9 million** (**1.4%**) for the **26** weeks, driven by a **$3.0 million** increase from higher California minimum wage rates, partially offset by **$2.5 million** from labor efficiencies[200](index=200&type=chunk) - As a percentage of company-operated restaurant revenue, labor and related expenses decreased from **32.1%** to **30.8%** for the **13** weeks and from **31.8%** to **31.7%** for the **26** weeks[201](index=201&type=chunk) [Occupancy and Other Operating Expenses](index=60&type=section&id=Occupancy%20and%20Other%20Operating%20Expenses) - Occupancy and other operating expenses increased by **$2.1 million** (**8.5%**) for the **13** weeks and **$3.9 million** (**8.0%**) for the **26** weeks ended June 25, 2025[202](index=202&type=chunk)[203](index=203&type=chunk) - The increases were primarily due to higher costs in occupancy, utilities, marketplace delivery fees, software maintenance, and repairs and maintenance[202](index=202&type=chunk)[203](index=203&type=chunk) - As a percentage of company-operated restaurant revenue, these expenses increased from **24.1%** to **25.6%** for the **13** weeks and from **24.3%** to **25.9%** for the **26** weeks[204](index=204&type=chunk) [General and Administrative Expenses](index=60&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative expenses increased by **$1.7 million** (**14.8%**) for the **13** weeks, driven by higher stock compensation, legal/professional fees (shareholder activism), and restructuring costs[205](index=205&type=chunk)[206](index=206&type=chunk) - For the **26** weeks, these expenses increased by **$1.1 million** (**4.6%**), primarily due to **$1.4 million** in legal/professional fees and **$0.9 million** in stock compensation, partially offset by a **$0.6 million** legal settlement[207](index=207&type=chunk) - As a percentage of total revenue, these expenses increased from **9.6%** to **10.8%** for the **13** weeks and from **9.9%** to **10.1%** for the **26** weeks[208](index=208&type=chunk) [Franchise Expenses](index=62&type=section&id=Franchise%20Expenses) - Franchise expenses increased by **$1.8 million** (**16.2%**) for the **13** weeks and **$3.6 million** (**16.7%**) for the **26** weeks ended June 25, 2025[209](index=209&type=chunk) - The increase was primarily due to **$1.6 million** (**13** weeks) and **$3.4 million** (**26** weeks) in IT pass-through expenses related to the franchisee rollout of a new POS system[209](index=209&type=chunk) [Loss on Disposition of Restaurants](index=62&type=section&id=Loss%20on%20Disposition%20of%20Restaurants) - For the thirteen and twenty-six weeks ended June 26, 2024, the company recorded a net loss of less than **$0.1 million** from the sale of one restaurant to an existing franchisee, generating **$0.1 million** in cash proceeds[210](index=210&type=chunk) [Impairment and Closed-Store Reserves](index=62&type=section&id=Impairment%20and%20Closed-Store%20Reserves) - No non-cash impairment charges were recorded for the thirteen and twenty-six weeks ended June 25, 2025, or June 26, 2024[211](index=211&type=chunk) - Less than **$0.1 million** of closed-store reserve expense was recognized for both the thirteen and twenty-six weeks ended June 25, 2025, and June 26, 2024[212](index=212&type=chunk) [Interest Expense, Net](index=63&type=section&id=Interest%20Expense,%20Net) - Interest expense, net, decreased by **$0.3 million** for the **13** weeks and **$0.7 million** for the **26** weeks ended June 25, 2025, compared to the prior year[213](index=213&type=chunk) - The decrease was primarily related to lower interest rates and reduced outstanding balances on the **2022** Revolver[213](index=213&type=chunk) [Income Tax Receivable Agreement](index=63&type=section&id=Income%20Tax%20Receivable%20Agreement) - The company terminated most obligations under the Tax Receivable Agreement (TRA) on May 29, 2024, by making a payment of **$398,896**[214](index=214&type=chunk) - As of June 25, 2025, there was no remaining obligation owed on the condensed consolidated balance sheets[214](index=214&type=chunk) [Provision for Income Taxes](index=63&type=section&id=Provision%20for%20Income%20Taxes) Income Tax Provision and Effective Tax Rate | Period | Income Tax Provision (in thousands) | Estimated Effective Tax Rate | | :--- | :--- | :--- | | 13 Weeks Ended June 25, 2025 | $3,000 | 29.6% | | 13 Weeks Ended June 26, 2024 | $3,200 | 29.3% | | 26 Weeks Ended June 25, 2025 | $5,300 | 29.7% | | 26 Weeks Ended June 26, 2024 | $5,400 | 28.4% | - The difference from the **21.0%** statutory rate is primarily due to state taxes, non-tax deductible executive compensation, and lower stock compensation expense deductible for tax, partially offset by a federal Work Opportunity Tax Credit benefit[217](index=217&type=chunk) [Key Performance Indicators](index=63&type=section&id=Key%20Performance%20Indicators) [System-Wide Sales](index=63&type=section&id=System-Wide%20Sales) System-Wide Sales (Amounts in thousands) | Period | June 25, 2025 | June 26, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | 13 Weeks Ended | $287,038 | $285,607 | +0.5% | | 26 Weeks Ended | $556,491 | $553,496 | +0.5% | - System-wide sales do not include the **eight** licensed stores in the Philippines[221](index=221&type=chunk) [Company-Operated Restaurant Revenue (KPI)](index=64&type=section&id=Company-Operated%20Restaurant%20Revenue%20(KPI)) - Company-operated restaurant revenue consists of sales of food and beverages in company-operated restaurants, net of promotional allowances, employee meals, and other discounts[222](index=222&type=chunk) - This revenue is directly influenced by the number of operating weeks, the number of open restaurants, and comparable restaurant sales[222](index=222&type=chunk) [Comparable Restaurant Sales (KPI)](index=64&type=section&id=Comparable%20Restaurant%20Sales%20(KPI)) - Comparable restaurant sales reflect year-over-year sales changes for restaurants that have operated for at least fifteen months, excluding those closed during the period[223](index=223&type=chunk) - As of June 25, 2025, there were **485** comparable restaurants (**171** company-operated and **314** franchised)[223](index=223&type=chunk) - Growth can be generated by an increase in meals sold and/or increases in the average check amount due to menu mix shifts or price increases[223](index=223&type=chunk) [Restaurant Contribution and Restaurant Contribution Margin](index=64&type=section&id=Restaurant%20Contribution%20and%20Restaurant%20Contribution%20Margin) - Restaurant contribution is a non-GAAP measure defined as company-operated restaurant revenue less company restaurant expenses (food and paper, labor, occupancy, and other operating expenses)[224](index=224&type=chunk) - Restaurant contribution margin is restaurant contribution as a percentage of net company-operated restaurant revenue[224](index=224&type=chunk) Restaurant Contribution and Margin (Amounts in thousands) | Metric | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Restaurant contribution | $19,926 | $19,052 | $35,700 | $36,141 | | Restaurant contribution margin (%) | 19.1% | 18.6% | 17.6% | 18.1% | [New Restaurant Openings](index=66&type=section&id=New%20Restaurant%20Openings) - New restaurant openings reflect the number of new restaurants opened by the company and its franchisees during a reporting period[228](index=228&type=chunk) - New restaurants typically experience a start-up period of approximately fourteen weeks with higher-than-normal sales volumes and lower restaurant contribution margins due to inefficiencies[228](index=228&type=chunk) [EBITDA and Adjusted EBITDA](index=66&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate operating performance by excluding interest, taxes, depreciation, amortization, and other non-recurring items[229](index=229&type=chunk)[230](index=230&type=chunk) EBITDA and Adjusted EBITDA (Amounts in thousands) | Metric | 13 Weeks Ended June 25, 2025 | 13 Weeks Ended June 26, 2024 | 26 Weeks Ended June 25, 2025 | 26 Weeks Ended June 26, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $7,107 | $7,633 | $12,588 | $13,545 | | EBITDA | $15,234 | $16,188 | $28,093 | $29,718 | | Adjusted EBITDA | $18,473 | $17,218 | $32,398 | $32,917 | - Adjustments to EBITDA include stock-based compensation, loss on disposal of assets, impairment and closed-store reserves, legal settlements, special legal and professional fees, restructuring and executive transition costs, and pre-opening costs[236](index=236&type=chunk)[237](index=237&type=chunk)[243](index=243&type=chunk) [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) [Operating Activities](index=70&type=section&id=Operating%20Activities) - Net cash provided by operating activities decreased by **$9.2 million** to **$18.9 million** for the twenty-six weeks ended June 25, 2025, compared to **$28.1 million** in the prior year[241](index=241&type=chunk)[242](index=242&type=chunk) - This change was due to unfavorable working capital fluctuations[242](index=242&type=chunk) [Investing Activities](index=71&type=section&id=Investing%20Activities) - Net cash used in investing activities decreased by **$2.1 million** to **$8.4 million** for the twenty-six weeks ended June 25, 2025, compared to **$10.5 million** in the prior year[241](index=241&type=chunk)[244](index=244&type=chunk) - This decrease was primarily due to reduced purchases of property and equipment related to restaurant remodeling[244](index=244&type=chunk) [Financing Activities](index=71&type=section&id=Financing%20Activities) - Net cash used in financing activities decreased by **$10.5 million** to **$3.9 million** for the twenty-six weeks ended June 25, 2025, compared to **$14.4 million** in the prior year[241](index=241&type=chunk)[245](index=245&type=chunk) - The change was primarily due to lower share repurchases (**$1.8 million** in **2025** vs **$18.2 million** in **2024**), partially offset by a **$2.0 million** net paydown on the **2022** Revolver in **2025** (vs **$3.0 million** net borrowings in **2024**)[245](index=245&type=chunk) [Debt and Other Obligations](index=71&type=section&id=Debt%20and%20Other%20Obligations) - The **2022** Revolver is a **$150.0 million** senior secured revolving credit facility maturing on July 27, 2027[246](index=246&type=chunk) - As of June 25, 2025, outstanding borrowings were **$69.0 million**, with **$70.7 million** in borrowing availability[249](index=249&type=chunk) - The company was in compliance with all financial covenants of the **2022** Credit Agreement as of June 25, 2025[249](index=249&type=chunk) - The interest rate range under the **2022** Revolver was **5.65%** to **7.75%** for the twenty-six weeks ended June 25, 2025[248](index=248&type=chunk) [Material Cash Requirements](index=73&type=section&id=Material%20Cash%20Requirements) - Material cash requirements as of June 25, 2025, have not changed materially since the Annual Report on Form 10-K for December 25, 2024[251](index=251&type=chunk) - These requirements primarily relate to debt payments (including interest), restaurant operating lease payments, chicken purchasing commitments, restaurant finance lease payments, and capital expenditures[251](index=251&type=chunk) [Share Repurchases (Liquidity)](index=73&type=section&id=Share%20Repurchases%20(Liquidity)) - The Share Repurchase Program, which authorized up to **$20,000,000** of common stock repurchases, expired on March 31, 2025[252](index=252&type=chunk) - For the thirteen weeks ended June 25, 2025, the company repurchased **3,479** shares for less than **$0.1 million**[253](index=253&type=chunk) - For the twenty-six weeks ended June 25, 2025, the company repurchased **163,229** shares for approximately **$1.8 million**[253](index=253&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section details the company's exposure to market risks, primarily focusing on interest rate fluctuations, inflationary pressures, and commodity price volatility [Interest Rate Risk](index=73&type=section&id=Interest%20Rate%20Risk) - The company is exposed to market risk from changes in interest rates on its variable-rate **2022** Revolver debt, with **$69.0 million** outstanding as of June 25, 2025[254](index=254&type=chunk) - A **1.0%** increase in the effective interest rate on **2022** Revolver borrowings would result in a pre-tax interest expense increase of **$0.7 million** on an annualized basis[254](index=254&type=chunk) - Borrowings bear interest at rates based on SOFR or a base rate, plus a margin[255](index=255&type=chunk) [Inflation](index=74&type=section&id=Inflation) - Inflation impacts food, paper, construction, utility, labor and benefits, and general and administrative costs[256](index=256&type=chunk) - The company has largely offset cost increases through menu price increases, managing menu mix, and improving productivity, but future offsets are not guaranteed[256](index=256&type=chunk) - Increases in federal, state, or local minimum wage rates will increase labor costs[257](index=257&type=chunk) [Commodity Price Risk](index=75&type=section&id=Commodity%20Price%20Risk) - The company is exposed to market price fluctuations in food products, particularly chicken, other proteins, grains, produce, dairy products, and cooking oil[258](index=258&type=chunk) - While purchasing commitments partially mitigate risk, volatility from factors like diseases or inclement weather can still impact food and beverage costs[258](index=258&type=chunk) - The company does not currently use financial instruments to hedge its commodity risk[258](index=258&type=chunk) [Item 4. Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section describes the company's disclosure controls and procedures, confirming their effectiveness as of June 25, 2025 [Disclosure Controls and Procedures](index=75&type=section&id=Disclosure%20Controls%20and%20Procedures) - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the disclosure controls and procedures were effective at the reasonable assurance level as of June 25, 2025[261](index=261&type=chunk) - Disclosure controls are designed to ensure information required to be disclosed is recorded, processed, summarized, and reported timely[259](index=259&type=chunk) [Changes in Internal Control over Financial Reporting](index=75&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No changes in internal control over financial reporting occurred during the quarter ended June 25, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[262](index=262&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings.) The company faces routine legal claims, with no material proceedings expected to significantly impact its financial position - The company is involved in various claims, such as wage and hour and other legal actions, that arise in the ordinary course of business[264](index=264&type=chunk) - Neither the company nor its subsidiaries are party to any material legal proceedings[264](index=264&type=chunk) [Item 1A. Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 25, 2024 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 25, 2024[265](index=265&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company repurchased **3,479** shares of common stock for less than **$0.1 million** under its Share Repurchase Program, which expired on March 31, 2025 - The Share Repurchase Program, authorized for up to **$20,000,000** of common stock repurchases, expired on March 31, 2025[267](index=267&type=chunk)[268](index=268&type=chunk) - For the thirteen weeks ended June 25, 2025, the company repurchased **3,479** shares of common stock under the program for less than **$0.1 million**[268](index=268&type=chunk) - Total repurchases for the quarter included **3,479** shares under the program and **34,621** shares acquired to satisfy employee tax withholding obligations[268](index=268&type=chunk) [Item 3. Defaults Upon Senior Securities](index=77&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities for the period - No defaults upon senior securities were reported[269](index=269&type=chunk) [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) The company reported no mine safety disclosures - No mine safety disclosures were reported[270](index=270&type=chunk) [Item 5. Other Information](index=77&type=section&id=Item%205.%20Other%20Information.) No directors or executive officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the twenty-six weeks ended June 25, 2025 - None of the Company's directors or executive officers adopted or terminated any 'Rule **10b5-1** trading arrangement' or 'non-Rule **10b5-1** trading arrangement' during the twenty-six weeks ended June 25, 2025[271](index=271&type=chunk) [Item 6. Exhibits](index=78&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including organizational documents, equity incentive plans, certifications, and XBRL interactive data files Selected Exhibits Filed | Number | Description | | :--- | :--- | | 3.1 | Amended and Restated Certificate of Incorporation of El Pollo Loco Holdings, Inc. | | 10.1 | Equity Incentive Plan, as amended | | 31.1 | Certification of Chief Executive Officer under section 302 of the Sarbanes–Oxley Act of 2002 | | 31.2 | Certification of Chief Financial Officer under section 302 of the Sarbanes–Oxley Act of 2002 | | 101.INS | Inline XBRL Instance Document | | 104 | Cover Page Interactive Data File | [Signatures](index=81&type=section&id=Signatures) The report is duly signed on behalf of El Pollo Loco Holdings, Inc. by its Chief Executive Officer, Elizabeth Williams, and Chief Financial Officer, Ira Fils, on August 1, 2025 - The report was signed by Elizabeth Williams, Chief Executive Officer, and Ira Fils, Chief Financial Officer, on August 1, 2025[279](index=279&type=chunk)