Core Insights - El Pollo Loco Holdings reported revenue of $125.83 million for the quarter ended June 2025, reflecting a 3% increase year-over-year and surpassing the Zacks Consensus Estimate of $125.09 million by 0.59% [1] - The company's EPS for the quarter was $0.28, up from $0.26 in the same quarter last year, exceeding the consensus EPS estimate of $0.25 by 12% [1] Financial Performance Metrics - Franchise restaurants totaled 325, slightly below the average estimate of 327 from three analysts [4] - Company-owned restaurants remained at 174, matching the average estimate [4] - Total restaurants reached 499, compared to the average estimate of 501 [4] - Comparable restaurant sales for company-owned restaurants increased by 0.9%, outperforming the average estimate of 0.3% [4] - Franchise advertising fee revenue was reported at $8.14 million, slightly below the average estimate of $8.16 million, representing a year-over-year decline of 0.9% [4] - Franchise revenue was $13.37 million, exceeding the average estimate of $12.99 million, marking a year-over-year increase of 14.8% [4] - Revenue from company-operated restaurants was $104.32 million, surpassing the average estimate of $103.91 million, reflecting a 2% increase compared to the previous year [4] Stock Performance - El Pollo Loco's shares have declined by 7.2% over the past month, while the Zacks S&P 500 composite has increased by 2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $125.8 million, up from $122.2 million in Q2 2024, representing a year-over-year increase of 2.9% [24] - Company-operated restaurant revenue increased by 2% to $104.3 million, driven by a 1.2% increase in comparable restaurant sales and additional sales from two new restaurant openings [24] - GAAP net income for Q2 2025 was $7.1 million, or $0.24 per diluted share, compared to $7.6 million, or $0.25 per diluted share in the prior year [31] Business Line Data and Key Metrics Changes - Franchise revenue increased by 14.8% to $13.4 million, driven by IT pass-through revenue related to a new point of sale system and five new franchise openings [25] - Restaurant contribution margin improved to 19.1% from 18.6% year-over-year, with expectations for the full year to remain between 17.25% and 17.75% [29] Market Data and Key Metrics Changes - System-wide comparable store sales decreased by 0.7% in Q3 to date, with a 0.6% increase in company-operated restaurants and a 1.4% decrease in franchise restaurants [26] - Digital sales grew to 25.5% of total sales compared to 17.1% in the same quarter last year, indicating a significant increase in digital engagement [17] Company Strategy and Development Direction - The company is focused on menu innovation, operational improvements, digital growth, and unit development as key growth drivers [8] - A new brand campaign, "Let's Get Loco," was launched to modernize the brand and emphasize its commitment to quality [11] - The company plans to open at least 10 new restaurants in 2025, marking the largest system-wide unit growth since 2022 [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macroeconomic environment but expressed confidence in the brand's long-term potential and the effectiveness of recent initiatives [27] - The company expects modest improvement in comparable sales trends for the remainder of the year, driven by brand relaunch momentum and new product offerings [26] Other Important Information - Food and paper costs as a percentage of company restaurant sales decreased to 24.4%, while labor costs decreased to 30.8% due to operational efficiencies [27][28] - The company completed 20 remodels in 2025, with remodeled locations seeing an average mid-single-digit uplift in sales [32] Q&A Session Summary Question: Can you elaborate on the challenging macro environment? - Management noted that consumer spending is cautious across income groups, with a pronounced focus on value [40] Question: What is the dynamic behind franchise traffic and check sizes? - Franchisees have been cautious with pricing due to previous increases, which has affected average check sizes [41] Question: What is the confidence level in accelerating unit growth? - Management expressed strong confidence in the pipeline, citing healthy average unit volumes and reduced build-out costs for new locations [45][46] Question: How did same-store sales trends progress through Q2? - There was sequential improvement in sales, particularly in May and June, but July has been choppier due to timing issues [52] Question: What are the initial reactions to the new menu items? - The new Fresca wraps and quesadillas have received favorable reception, contributing to increased transaction frequency [64] Question: What are the expectations for pricing and margins in the back half of the year? - Management expects targeted price increases of about 2.5% in Q3 and 2.7% in Q4, with a focus on maintaining margins despite the macro environment [72][75]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) El Pollo Loco reported Q2 2025 revenue growth and improved adjusted profitability, with a slight decrease in comparable sales and net income [Q2 2025 Highlights](index=1&type=section&id=Q2%202025%20Highlights) Q2 2025 revenue reached $125.8 million, with adjusted net income and EBITDA increasing, despite a slight dip in comparable sales and net income Q2 2025 vs Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $125.8 million | $122.2 million | | System-wide Comparable Restaurant Sales | -0.3% | N/A | | Net Income | $7.1 million | $7.6 million | | Diluted EPS | $0.24 | $0.25 | | Adjusted Net Income | $8.2 million | $7.8 million | | Adjusted Diluted EPS | $0.28 | $0.26 | | Adjusted EBITDA | $18.5 million | $17.2 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Liz Williams highlighted strategic progress, with brand and menu innovations driving customer response and profitability growth - Strategic investments in brand re-launch and menu innovations are showing **positive customer response**[2](index=2&type=chunk) - Achieved a return to **positive system-wide traffic growth** and saw **profitability growth** at both restaurant and corporate levels[2](index=2&type=chunk) - The company is positioning for **national expansion** with solid unit growth in 2025 and a growing development pipeline for 2026[2](index=2&type=chunk) [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) A detailed analysis of Q2 2025 financial results covers revenue, profitability, expenses, balance sheet, and capital allocation [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Q2 2025 total revenue increased to $125.8 million, boosted by company-operated sales and IT pass-through related franchise revenue Q2 2025 Revenue Breakdown | Revenue Source | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Company-Operated | $104.3 million | $102.3 million | +2.0% | | Franchise | $13.4 million | $11.7 million (approx) | +14.8% | | **Total Revenue** | **$125.8 million** | **$122.2 million** | **+2.9%** | - Company-operated comparable sales growth of **1.2%** was driven by a **1.5% increase in average check**, partially offset by a **0.3% decrease in transactions**[4](index=4&type=chunk) - The significant **14.8% increase in franchise revenue** was largely due to a **$1.6 million IT pass-through revenue** related to a new POS system rollout[5](index=5&type=chunk) [Profitability and Expense Analysis](index=2&type=section&id=Profitability%20and%20Expense%20Analysis) Income from operations decreased, but restaurant contribution margin improved, while G&A expenses rose due to stock compensation and special fees Q2 Profitability Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income from Operations | $11.3 million | $12.3 million | | Restaurant Contribution | $19.9 million | $19.1 million | | Restaurant Contribution Margin | 19.1% | 18.6% | - G&A expenses increased by **$1.7 million**, driven by higher **stock compensation ($0.8 million)**, **special legal fees ($0.8 million)**, and **restructuring costs ($0.7 million)**[7](index=7&type=chunk) - Net income for Q2 2025 was **$7.1 million ($0.24/share)**, down from $7.6 million ($0.25/share) in Q2 2024. Adjusted net income increased to **$8.2 million ($0.28/share)** from $7.8 million ($0.26/share)[8](index=8&type=chunk) [Balance Sheet and Capital Allocation](index=2&type=section&id=Balance%20Sheet%20and%20Capital%20Allocation) Outstanding debt reduced to $69.0 million, cash at $9.0 million, and a share repurchase program terminated in March 2025 - Outstanding debt was reduced to **$69.0 million** as of quarter-end, with a further reduction to **$68.0 million** as of July 31, 2025[9](index=9&type=chunk)[10](index=10&type=chunk) - The company held **$9.0 million in cash and cash equivalents** at the end of Q2 2025[9](index=9&type=chunk) - A share repurchase program was active during the quarter, with **$0.1 million in buybacks**, but the program was terminated on March 31, 2025[9](index=9&type=chunk) [2025 Outlook](index=2&type=section&id=2025%20Outlook) The 2025 outlook provides guidance on new restaurant openings, capital spending, G&A expenses, and the effective income tax rate [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) The company forecasts 10-11 new restaurants, $31.0-$34.0 million capital spending, and $48.0-$51.0 million G&A for 2025 2025 Full Year Outlook | Metric | Guidance | | :--- | :--- | | System-wide Restaurant Openings | 10 to 11 (9-10 franchised, up to 1 company-operated) | | Capital Spending | $31.0 – $34.0 million | | G&A Expense (excluding one-time costs) | $48.0 – $51.0 million | | Effective Income Tax Rate (before discrete items) | 29.0% – 29.5% | [Definitions of Non-GAAP and other Key Financial Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20and%20other%20Key%20Financial%20Measures) This section defines key performance indicators and non-GAAP financial measures used to evaluate the company's operational and financial performance [Key Performance Indicators and Non-GAAP Metrics](index=3&type=section&id=Key%20Performance%20Indicators%20and%20Non-GAAP%20Metrics) Key performance indicators and non-GAAP metrics are used to assess brand scale, store performance, and core profitability - **System-Wide Sales:** Sum of company-operated and franchised restaurant sales, used to evaluate brand scale and market penetration[12](index=12&type=chunk) - **Comparable Restaurant Sales:** Year-over-year sales changes for restaurants open for at least 15 months, indicating performance of the existing store base[14](index=14&type=chunk) - **Restaurant Contribution:** Company-operated revenue less direct restaurant expenses (food, labor, occupancy), used to measure restaurant-level profitability[15](index=15&type=chunk) - **Adjusted EBITDA & Adjusted Net Income:** Net income adjusted for items like interest, taxes, D&A, stock compensation, and other non-recurring costs to facilitate operating performance comparisons[16](index=16&type=chunk)[21](index=21&type=chunk) [Consolidated Financial Statements](index=10&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of income, balance sheets, operating data, and restaurant counts [Unaudited Condensed Consolidated Statements of Income](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 total revenues were $125.8 million, with income from operations at $11.3 million and net income at $7.1 million Q2 2025 Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $125,834 | $122,176 | | Total Expenses | $114,529 | $109,858 | | Income from Operations | $11,305 | $12,318 | | Net Income | $7,107 | $7,633 | [Unaudited Selected Condensed Consolidated Balance Sheets and Operating Data](index=11&type=section&id=Unaudited%20Selected%20Condensed%20Consolidated%20Balance%20Sheets%20and%20Operating%20Data) As of June 25, 2025, cash was $9.0 million, total debt $69.0 million, and total assets $596.8 million Selected Balance Sheet Data (in thousands) | Metric | June 25, 2025 | Dec 25, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,989 | $2,484 | | Total assets | $596,777 | $592,014 | | Total debt | $69,000 | $71,000 | | Total stockholders' equity | $274,178 | $260,669 | [Unaudited Restaurant Counts](index=12&type=section&id=Unaudited%20Restaurant%20Counts) At Q2 2025 end, the system had 499 restaurants (174 company-operated, 325 franchised), with a net increase of one Restaurant Count as of June 25, 2025 | Restaurant Type | Count | | :--- | :--- | | Company-operated | 174 | | Franchised | 325 | | **System-wide Total** | **499** | [Unaudited Reconciliation Tables](index=13&type=section&id=Unaudited%20Reconciliation%20Tables) This section details reconciliations of non-GAAP financial measures to GAAP, covering EBITDA, Adjusted Net Income, and Restaurant Contribution [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) Q2 2025 Net Income of $7.1 million was reconciled to Adjusted EBITDA of $18.5 million, with standard non-GAAP adjustments Q2 EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $7,107 | $7,633 | | EBITDA | $15,234 | $16,188 | | Adjusted EBITDA | $18,473 | $17,218 | [Reconciliation of Net Income to Adjusted Net Income](index=15&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) Q2 2025 Adjusted Net Income of $8.2 million was reconciled from Net Income of $7.1 million, adjusting for special legal fees and restructuring Q2 Adjusted Net Income Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $7,107 | $7,633 | | Adjusted Net Income | $8,223 | $7,805 | | Adjusted Diluted EPS | $0.28 | $0.26 | [Reconciliation of Income from Operations to Restaurant Contribution](index=16&type=section&id=Reconciliation%20of%20Income%20from%20Operations%20to%20Restaurant%20Contribution) Q2 2025 Income from Operations of $11.3 million was reconciled to Restaurant Contribution of $19.9 million, with a 19.1% margin Q2 Restaurant Contribution Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income from Operations | $11,305 | $12,318 | | Restaurant Contribution | $19,926 | $19,052 | | Restaurant Contribution Margin | 19.1% | 18.6% |

Core Insights - El Pollo Loco Holdings, Inc. reported financial results for the second quarter ended June 25, 2025, showing a slight increase in revenue but a decrease in net income compared to the previous year [1][8]. Financial Performance - Company-operated restaurant revenue increased to $104.3 million, up from $102.3 million, primarily due to a 1.2% increase in comparable restaurant revenue and additional sales from new restaurant openings [5]. - Total revenue for the quarter was $125.8 million, compared to $122.2 million in the same quarter of 2024, reflecting a growth of approximately 2.1% [8]. - Net income decreased to $7.1 million, or $0.24 per diluted share, down from $7.6 million, or $0.25 per diluted share, in the prior year [10][8]. - Adjusted net income was $8.2 million, or $0.28 per diluted share, compared to $7.8 million, or $0.26 per diluted share, in the same quarter of 2024 [10][8]. Operational Highlights - System-wide comparable restaurant sales decreased by 0.3%, with a notable 1.5% increase in average check size due to menu price increases, partially offset by a 0.3% decrease in transactions [5][8]. - Franchise revenue increased by 14.8% to $13.4 million, driven by new franchise openings and IT pass-through revenue related to a new Point of Sale system [6][8]. - The company achieved profitability growth at both the restaurant and corporate levels, with restaurant contribution rising to $19.9 million, or 19.1% of company-operated restaurant revenue [7][8]. Strategic Initiatives - The CEO highlighted progress in brand re-launch and menu innovations, including the introduction of Fresca Wraps and Salads, which are expected to support long-term growth [4]. - The company plans to open 10 to 11 new restaurants in 2025, including 9 to 10 franchised locations, and anticipates capital spending between $31.0 million and $34.0 million [16][4]. Balance Sheet and Cash Flow - As of June 25, 2025, the company had an outstanding debt balance of $69.0 million and $9.0 million in cash and cash equivalents [11]. - The company repurchased 3,479 shares of common stock for approximately $0.1 million during the quarter [11]. Future Outlook - The company provided expectations for the remainder of 2025, emphasizing continued growth and expansion plans [13].

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [1][2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility across various sectors [1]. - Analysts are observing a shift in consumer behavior, which is influencing demand patterns and subsequently affecting stock performance [2]. Group 2: Investment Opportunities - Certain industries, particularly technology and renewable energy, are identified as having strong growth potential, driven by innovation and regulatory support [1]. - Companies that adapt quickly to changing market conditions and consumer preferences are likely to outperform their peers [2]. Group 3: Financial Performance - Financial reports indicate that several companies have exceeded earnings expectations, showcasing resilience in challenging economic environments [1]. - Key metrics such as revenue growth and profit margins are being closely monitored to assess long-term viability and investment attractiveness [2].

Core Viewpoint - El Pollo Loco Holdings, Inc. will host a conference call to discuss its second quarter 2025 financial results on July 31, 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 August 14, 2025, using the passcode 13754232 [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 from 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 [4]

Core Insights - El Pollo Loco is launching new quesadilla flavors, Creamy Chipotle and Salsa Verde, aimed at enhancing their summer menu offerings [1][2][3] - The new quesadillas are designed for portability and convenience, making them suitable for various casual settings [2][4] - The company is promoting these new products through a marketing campaign featuring NBA player Dalton Knecht, including a customer engagement challenge [3] Product Details - The Creamy Chipotle Quesadilla includes 100% Jack cheese, fire-grilled white meat chicken, and creamy chipotle sauce, served with handmade guacamole [6] - The Salsa Verde Quesadilla features similar ingredients but adds avocado salsa for a tangy flavor, also accompanied by guacamole [6] - Pricing for the quesadillas is set at $7.49 a la carte and $9.99 for a combo that includes chips and a drink, with potential price variations by location [2][6] Company Overview - El Pollo Loco is recognized as a leading fire-grilled chicken restaurant in the U.S., known for its healthier menu options and innovative meals [5] - The company operates over 495 locations across seven U.S. states and has expanded internationally with licensed locations in the Philippines [5] - El Pollo Loco emphasizes inclusivity within its workforce, which consists of over 4,000 employees [5]

Core Insights - El Pollo Loco has introduced new quesadilla flavors, Creamy Chipotle and Salsa Verde, aimed at enhancing their summer menu offerings [1][2][3] - The new quesadillas are designed for convenience, making them suitable for various occasions, and are available as a combo for $9.99 or a la carte for $7.49 [2][8] Product Details - The Creamy Chipotle Quesadilla features 100% Jack cheese, citrus-marinated fire-grilled white meat chicken, and El Pollo Loco's signature creamy chipotle sauce, served with handmade guacamole [8] - The Salsa Verde Quesadilla includes similar ingredients but adds El Pollo Loco's signature avocado salsa for a tangy flavor, also accompanied by guacamole [8] Marketing and Promotions - El Pollo Loco has partnered with NBA player Dalton Knecht for a promotional campaign, including the Dalton Dunk Quesadilla Challenge, which rewards Loco Rewards members with discounts for repeat purchases [3] - The company emphasizes the bold flavors and convenience of the new quesadillas, appealing to consumers looking for quick and satisfying meal options [4] Company Overview - El Pollo Loco is recognized as a leading fire-grilled chicken restaurant in the U.S., with over 495 locations across seven states and international presence in the Philippines [5] - The brand has been awarded as the 1 "Best Restaurant for Quick, Healthy Food" in USA TODAY's 10 Best Readers' Choice Awards, highlighting its commitment to quality and healthier offerings [5]

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]