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]

Company Overview - El Pollo Loco Holdings (LOCO) shares increased by 9.6% to $10.17 in the last trading session, following a significant volume of trading, contrasting with a 10.9% loss over the previous four weeks [1][2] Acquisition Proposal - The surge in El Pollo Loco's shares was driven by an unsolicited, non-binding buyout proposal from Biglari Capital, which aims to acquire all outstanding shares of the company. Biglari Capital already holds a significant stake in El Pollo Loco, indicating potential confidence in a strategic move that could alter the company's future [2] Earnings Expectations - The company is projected to report quarterly earnings of $0.20 per share, reflecting a year-over-year decline of 9.1%. Revenue is expected to reach $118.46 million, marking a 2% increase from the same quarter last year [3] Earnings Estimate Trends - The consensus EPS estimate for El Pollo Loco has remained stable over the past 30 days, suggesting that stock price movements may not sustain without changes in earnings estimate revisions. Monitoring LOCO's performance is advised to determine if the recent price increase can lead to further strength [4] Industry Context - El Pollo Loco is part of the Zacks Retail - Restaurants industry, where another company, Potbelly (PBPB), experienced a 7.7% decline in its last trading session, with a return of -5.4% over the past month. Potbelly's consensus EPS estimate has also remained unchanged, indicating a significant year-over-year decline of 300% [4][5]

Core Viewpoint - El Pollo Loco Holdings, Inc. (LOCO) is experiencing growth through expansion, same-store sales increases, and operational efficiencies, but faces challenges from commodity inflation and traffic concerns [1] Group 1: Growth Factors - The company plans to open 10 new restaurants in 2025, focusing on emerging markets such as Arizona, Colorado, Idaho, New Mexico, Texas, and Washington, while maintaining its presence in California [2] - In the fourth quarter of 2024, same-store sales increased due to higher menu prices and consistent customer traffic, indicating strong brand loyalty and effective pricing strategies [3] - Strategic cost-saving measures have been implemented to enhance food quality and customer experience, including hiring a new chief development officer to streamline operations and reduce unit build costs [4] Group 2: Customer Experience Enhancements - In 2025, LOCO aims to improve customer satisfaction by strengthening service standards and accountability, implementing a new customer-feedback system in partnership with a leading provider to benchmark against industry peers [5] - The company is focused on improving service speed, accuracy, and consistency, recognizing that superior customer service drives transaction growth and loyalty [5] Group 3: Concerns - Increased competition in the quick-service restaurant sector, particularly from national brands with aggressive discounting, poses a challenge to LOCO's market share [6] - Price sensitivity among customers is impacting transaction volumes, and economic uncertainty may affect discretionary spending, potentially impacting LOCO's core customer base and sales growth [6]

Core Points - El Pollo Loco is celebrating National Burrito Day with a three-day event called the Burrito Block Party from April 2 to April 4, 2025, offering exclusive deals and giveaways for Loco Rewards members [1][4] Group 1: Event Details - On April 2, exclusive promo codes will be shared on Instagram Stories for Loco Rewards members to redeem in the app [2] - On April 3, Loco Rewards members can enjoy a buy one, get one free deal on select Fire-Grilled Chicken Burritos [3] - On April 4, the celebration will conclude with a Loco Friday Drop and giveaways, including a chance to win limited-edition items [4][7] Group 2: Promotions and Offers - The first 100 members to redeem will receive a free burrito, followed by discounts for the next 300 (50% off), 2,000 (20% off), and 10,000 members (15% off) [6] - $0 delivery is available on all orders placed through the Loco Rewards app or website with a minimum purchase of $15 on April 4, 2025 [7] Group 3: 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 [5] - The company operates over 495 restaurants across seven U.S. states and has expanded internationally with locations in the Philippines [8]

Pollo Loco’s ( LOCO ) double beat sent its stock soaring. But the flight was soon interrupted. It was a chicken flight! The stock soon returned to its decliningI am an Equity Analyst and Accountant specializing in restaurant stocks, with a solid foundation in Business Administration and Accounting, complemented by an MBA in Forensic Accounting and Controllership. As the founder of Goulart's Restaurant Stocks, I lead a company focused on analyzing restaurant stocks in the U.S. market. Our coverage spans mult ...

Restaurant Operations - As of December 25, 2024, the company operated 498 locations across seven states, with two new company-operated restaurants opened in fiscal 2024[248]. - The company plans to open one to two new company-operated restaurants and eight to nine new franchised restaurants in 2025[249]. - The company completed eight company-operated restaurant remodels and 44 franchise remodels in fiscal 2024, with plans for 30-40 remodels in fiscal 2025[256]. - The company opened new restaurants during the reporting period, contributing to initial higher sales volumes before stabilizing[311]. - The company licensed 10 restaurants in the Philippines as of December 25, 2024, expanding its international presence[395]. Sales Performance - Comparable restaurant sales system-wide increased by 3.2% in fiscal 2024, compared to a decrease of 0.3% in fiscal 2023[250]. - For company-operated restaurants, comparable sales increased by 2.8% in fiscal 2024, driven by a 7.9% increase in average check size, partially offset by a 4.7% decrease in transactions[251]. - Comparable restaurant sales at franchised restaurants increased by 3.5% in fiscal 2024, following a decrease of 0.7% in fiscal 2023[252]. - Comparable restaurant sales growth included a 2.8% increase for company-operated restaurants and a 3.5% increase for franchised restaurants, driven by a 7.9% rise in average check size[299][305]. Financial Performance - Total revenue for fiscal 2024 was $473.0 million, compared to $468.7 million in fiscal 2023, indicating a slight increase[304]. - Net income for fiscal 2024 was $25.7 million, a slight increase of $130, or 0.5%, compared to $25.6 million in fiscal 2023[276]. - Basic net income per share rose to $0.86 from $0.75, indicating a growth of 14.7%[386]. - Franchise revenue increased to $45.6 million in fiscal 2024, compared to $41.0 million in fiscal 2023, alongside franchise advertising fee revenue of $31.2 million[304]. - The restaurant contribution for fiscal 2024 was $69.1 million, reflecting an increase from $61.9 million in fiscal 2023, with a contribution margin of 17.4%[310]. Cost Management - The company has experienced inflationary pressures affecting food, labor, and construction costs, which are anticipated to continue into fiscal 2025[244]. - Food and paper costs decreased by $7.5 million, or 7.0%, in fiscal 2024, with food and paper costs as a percentage of company-operated restaurant revenue at 25.4%, down from 27.2% in fiscal 2023[280]. - Labor and related expenses decreased by $0.1 million, or 0.1%, due to a $5.8 million reduction from sold restaurants, offset by a $12.3 million increase from higher wage rates[281]. - Occupancy and other operating expenses decreased by $2.1 million, or 2.1%, with occupancy costs as a percentage of company-operated restaurant revenue at 25.1%, down from 25.4% in fiscal 2023[283]. Capital Expenditures and Investments - Total capital expenditures for 2024 were $19.1 million, with approximately $4.3 million spent on new restaurant development and $14.8 million on existing restaurant investments[341]. - The company expects to incur between $30.0 million and $34.0 million in total capital expenditures for 2025, with $3.0 million to $5.0 million for new restaurant construction[341]. Share Repurchase and Debt Management - In fiscal 2024, the company repurchased shares of common stock totaling $20.6 million, a decrease from $59.2 million in fiscal 2023[333]. - The company announced a share repurchase program authorized to repurchase up to $20 million of common stock, set to terminate on March 31, 2025[344]. - As of December 25, 2024, the company had outstanding borrowings of $71 million under the 2022 Revolver, with a margin of 1.5%[367]. - A 1% increase in the effective interest rate on the 2022 Revolver borrowings would result in a pre-tax interest expense increase of $0.7 million annually[367]. Compliance and Regulatory Factors - Labor and regulatory compliance costs are expected to increase due to California's AB 1228, which raises the minimum wage to $20 per hour starting April 1, 2024[243]. - The company was in compliance with financial covenants under the 2022 Credit Agreement as of December 25, 2024[340]. Cash Flow and Liquidity - In fiscal 2024, the company recorded net cash provided by operating activities of $46.8 million, an increase of $6.1 million compared to fiscal 2023[330]. - Cash and cash equivalents at the end of the period were $2,484 million, down from $7,288 million in 2023, marking a decrease of 65.9%[394]. - As of December 25, 2024, the company's total debt was $71.0 million, with available cash of $2.5 million to meet liquidity needs for the next twelve months[398]. Membership and Loyalty Programs - The Loco Rewards loyalty program had over 4.2 million members as of December 25, 2024, with $0.8 million in revenue allocated to unredeemed loyalty points[258]. - The performance obligation related to loyalty points is satisfied when points are redeemed or expire[430]. Miscellaneous - The company does not currently use financial instruments to hedge commodity price risks, which may impact operational results[370]. - The company had one supplier accounting for 19.7% of accounts payable as of December 25, 2024, and 15.1% as of December 27, 2023[406].