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]

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 year-over-year increase of 2.6% [21] - Company-operated restaurant revenue increased by 1.2% to $98.4 million from $97.2 million in the same period last year, driven by a 0.6% increase in comparable restaurant sales [21][22] - 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 [28][29] 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 the franchisee rollout of a new point of sale system [23] - The increase in franchise revenue was partially offset by a 1.3% decrease in comparable restaurant sales [23] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 1.2% in Q2 to date through April 23, 2025, with a 0.1% decrease in company-operated restaurants and a 1.8% decrease in franchise restaurants [24] 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][9] - The company aims to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [16][17] Management Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter results were underwhelming but expressed confidence in the steps being taken to improve performance [6] - The company expects sequential quarterly acceleration in comparable sales trends in Q3 and Q4, driven by the brand relaunch and new product launches [24] - Management noted that the consumer pullback is real, but they are focused on what they can control, including reinforcing quality and value [35] Other Important Information - Food and paper costs as a percentage of company restaurant sales decreased by 120 basis points year-over-year to 25.2% due to higher menu pricing [24][25] - Labor and related expenses increased by 120 basis points year-over-year to 32.7%, with wage inflation of approximately 12% in Q1 2025 [25][26] - The company expects to remodel between 60 to 70 system-wide restaurants in 2025, with eight already completed [19][30] Q&A Session Summary Question: Expectations for Q2 same store sales - Management indicated that headwinds are expected to continue in Q2, but they are focused on their brand relaunch and menu innovations to drive sales [34][35] Question: Impact of new product launches on comp trends - Management noted that the Mango Habanero product drove initial trial, and they are optimistic about the upcoming launches of Fresca wraps and quesadillas [38][40] Question: Regional differences in consumer behavior - Management observed that the consumer pullback is widespread, affecting various income bands, including the Hispanic consumer [51][52] Question: Menu pricing expectations for the year - Management expects menu pricing to be around 3% for the year, with approximately 2% in Q3 and Q4 [53] Question: Operational gaps identified through consumer feedback - Management is implementing a back-to-basics program to address operational gaps, focusing on accuracy and hospitality [70][72] Question: Kiosk rollout status and benefits - Kiosks are in most company restaurants, with plans to complete the rollout in the remaining locations, and management sees opportunities to enhance guest engagement through kiosks [73][74]

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].

Core Viewpoint - El Pollo Loco Holdings, Inc. will host a conference call to discuss its first quarter 2025 financial results on May 1, 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 May 15, 2025, by dialing 412-317-6671 using passcode 13752366 [2]. - The conference call will also be webcast live on the company's corporate website under the "Events & Presentations" page, 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 over 495 company-owned and franchised restaurants across seven U.S. states and has eight licensed locations in the Philippines, reflecting its successful expansion since 1980 [4].

Core Viewpoint - El Pollo Loco Holdings, Inc. (LOCO) has experienced a significant decline in stock price, down 23.5% over the past six months, underperforming compared to the broader restaurant industry and major market indices [1][2][3] Company Performance - The stock is currently trading below its 50-day moving average, indicating a bearish trend [4][6] - Fiscal 2025 earnings per share (EPS) estimates have been revised downward from 95 cents to 93 cents, reflecting weakening analyst confidence [10] - Despite the downward revision, the company is projected to report a 4.5% year-over-year growth in fiscal 2025 [11] Industry Context - The restaurant industry is facing challenges due to newly announced tariffs on imported food items, leading to increased cost pressures and uncertainty [8][9] - Prominent chains like Starbucks, Chipotle, and McDonald's are also experiencing vulnerabilities due to reliance on imported ingredients [9] Strategic Initiatives - El Pollo Loco is focusing on a five-pillar strategy to modernize its brand and enhance customer experience, emphasizing fresh ingredients and health-conscious menu options [12][16] - The company has implemented a new customer-feedback system to improve service standards and accountability [16] Valuation Insights - LOCO stock is currently trading at a forward price-to-sales (P/S) multiple of 0.61X, significantly below the industry average of 3.76X, indicating an attractive investment opportunity [17] - Analysts have set an average price target of $14.75 for LOCO, suggesting a potential upside of 45% from the last closing price of $10.17 [18] Investment Outlook - The company is recognized for its brand loyalty and localized menu offerings, which may support long-term resilience despite current macroeconomic challenges [19][20] - Existing investors may consider holding the stock while new investors might wait for clearer signs of momentum before entering [22]