The U.S. restaurant industry continues to be impacted by high wages, food cost inflation and traffic woes in 2024 after two years of strong growth. The Zacks defined Retail – Restaurants industry is currently in the bottom 35% of the Zacks Industry Rank. In the past year, the industry has grown just 3.3%, while its year-to-date return is a mere 1.1%. The broad-market index — the S&P 500 — has rallied 29.3% and 18.8%, respectively, over these periods. Since the restaurant industry is ranked in the bottom hal ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potenti ...

COSTA MESA, Calif., Aug. 12, 2024 (GLOBE NEWSWIRE) -- El Pollo Loco (Nasdaq: LOCO), the nation's leading fire-grilled chicken chain, has announced an exciting partnership with content creator Yuri Lamasbella. Following successful collaborations, El Pollo Loco has appointed her as its first-ever Kreative Director for the Double Chopped Salads campaign launch. In this role, the TikTok star brought her fresh, unique creativity and expertise to create a dynamic campaign for the brand’s Double Chopped Salads. Th ...

COSTA MESA, Calif., Aug. 07, 2024 (GLOBE NEWSWIRE) -- If you're a busy parent looking for a quick, delicious, family-friendly meal that isn't fried, an athlete looking for extra protein, or someone who just wants to eat something tasty and flavorful at a reasonable price, El Pollo Loco has your back. The Southern California-based company is extending a special offer to customers who helped score this year's win of USA TODAY 10Best Readers' Choice Award for Best Quick, Healthy Food. Now through August 31st, ...

PART I—FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) Unaudited condensed consolidated financial statements for El Pollo Loco Holdings, Inc. for Q2 2024, including balance sheets, income, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly increased to $593.8 million as of June 26, 2024, while total liabilities rose to $345.3 million, and stockholders' equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 26, 2024 | December 27, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $26,005 | $25,134 | | **Total Assets** | **$593,846** | **$592,301** | | **Total Current Liabilities** | $74,886 | $72,581 | | **Revolver Loan** | $87,000 | $84,000 | | **Total Liabilities** | **$345,268** | **$341,605** | | **Total Stockholders' Equity** | **$248,578** | **$250,696** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the thirteen weeks ended June 26, 2024, total revenue increased slightly to $122.2 million, net income rose to $7.6 million, and diluted EPS reached $0.25 Income Statement Summary (in thousands, except per share data) | Metric | Thirteen Weeks Ended June 26, 2024 | Thirteen Weeks Ended June 28, 2023 | Twenty-Six Weeks Ended June 26, 2024 | Twenty-Six Weeks Ended June 28, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $122,176 | $121,492 | $238,329 | $236,018 | | **Income from Operations** | $12,318 | $10,888 | $21,997 | $18,639 | | **Net Income** | $7,633 | $7,056 | $13,545 | $11,974 | | **Diluted EPS** | $0.25 | $0.20 | $0.44 | $0.33 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to $28.1 million for the twenty-six weeks ended June 26, 2024, with significant cash used in investing and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Twenty-Six Weeks Ended June 26, 2024 | Twenty-Six Weeks Ended June 28, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $28,117 | $21,796 | | **Net cash used in investing activities** | $(10,546) | $(8,899) | | **Net cash used in financing activities** | $(14,394) | $(23,207) | | **Increase (decrease) in cash** | $3,177 | $(10,310) | | **Cash and cash equivalents, end of period** | $10,465 | $10,183 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations of accounting policies and financial figures, covering basis of presentation, property, debt, revenue, leases, and shareholder rights - The company operates **171 company-owned** and **324 franchised restaurants** in the United States as of June 26, 2024[27](index=27&type=chunk) - A significant concentration of risk exists, with restaurants in the greater Los Angeles area generating approximately **71.8% of total revenue** for the thirteen weeks ended June 26, 2024[37](index=37&type=chunk) - On May 29, 2024, the Company terminated most of its obligations under the 2014 Tax Receivable Agreement (TRA) in exchange for a payment of **$398,896 thousand**[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q2 2024 financial performance, highlighting a 4.5% increase in system-wide comparable sales, revenue drivers, cost fluctuations, and liquidity [Market Trends and Uncertainties](index=48&type=section&id=Market%20Trends%20and%20Uncertainties) The company identifies market challenges including California's AB 1228, increasing minimum wage to $20/hour, and persistent inflationary pressures on costs - California's **AB 1228**, effective April 1, 2024, increased the minimum wage to **$20/hour** for fast food workers, expected to increase labor costs and adversely affect profitability[168](index=168&type=chunk) - The company expects continued inflationary pressures in food, labor, construction, and other operating costs, partially offset by menu price increases and productivity improvements[169](index=169&type=chunk) [Highlights and Trends](index=50&type=section&id=Highlights%20and%20Trends) Q2 2024 system-wide comparable sales increased by 4.5%, with company-operated and franchised sales growing, and Loco Rewards reaching over 3.9 million members Comparable Restaurant Sales Growth (Q2 2024 vs Q2 2023) | Category | Comparable Sales Growth | | :--- | :--- | | System-wide | 4.5% | | Company-operated | 3.2% | | Franchised | 5.3% | - The **3.2% increase** in company-operated comparable sales was composed of an **8.8% increase** in average check size, partially offset by a **5.2% decrease** in transactions[176](index=176&type=chunk) - As of June 26, 2024, the Loco Rewards loyalty program had over **3.9 million members**[182](index=182&type=chunk) [Comparison of Results of Operations](index=56&type=section&id=Comparison%20of%20Results%20of%20Operations) In Q2 2024, company-operated revenue decreased due to refranchising, offset by comparable sales, while franchise revenue grew, and labor costs rose due to California wage increases - Company-operated restaurant revenue decreased by **$1.6 million (1.5%)** in Q2 2024, primarily due to a **$5.4 million revenue loss** from 19 restaurants sold to franchisees, partially offset by a **$3.1 million (3.2%) increase** in comparable restaurant sales[206](index=206&type=chunk) - Franchise revenue increased by **$1.5 million (15.1%)** in Q2 2024, driven by a **5.3% increase** in comparable sales and the addition of newly franchised restaurants[208](index=208&type=chunk) Key Company Restaurant Expense Ratios (Q2 2024 vs Q2 2023) | Expense Category | % of Company Revenue (Q2 2024) | % of Company Revenue (Q2 2023) | | :--- | :--- | :--- | | Food and paper costs | 25.2% | 27.4% | | Labor and related expenses | 32.1% | 31.1% | | Occupancy and other operating expenses | 24.1% | 24.6% | [Key Performance Indicators](index=63&type=section&id=Key%20Performance%20Indicators) This section details non-GAAP metrics for Q2 2024, with system-wide sales at $285.6 million, improved restaurant contribution margin, and increased Adjusted EBITDA Key Performance Indicators (Thirteen Weeks Ended) | Metric (in thousands) | June 26, 2024 | June 28, 2023 | | :--- | :--- | :--- | | System-wide sales | $285,607 | $270,353 | | Restaurant contribution | $19,052 | $17,574 | | Adjusted EBITDA | $17,218 | $16,623 | - Restaurant contribution margin for company-operated restaurants increased to **18.6%** for the thirteen weeks ended June 26, 2024, compared to **16.9%** for the same period in 2023[240](index=240&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash from operations and its $150.0 million revolving credit facility, with $87.0 million outstanding and significant share repurchases during the quarter - As of June 26, 2024, the company had **$87.0 million** outstanding on its 2022 Revolver, with **$53.2 million** in remaining borrowing availability[266](index=266&type=chunk) - For the thirteen weeks ended June 26, 2024, the company repurchased **203,483 shares** for approximately **$2.0 million** under its public Share Repurchase Program[269](index=269&type=chunk) - On May 29, 2024, the company repurchased an additional **1,534,303 shares** for a total of **$15.0 million** from FS Equity Partners V, L.P. and its affiliates[271](index=271&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is exposed to market risks from interest rate fluctuations on its variable-rate debt, inflation impacting costs, and commodity price volatility, particularly for chicken - The company is exposed to interest rate risk on its variable-rate debt; a hypothetical **1.0% increase** on its **$87.0 million** of borrowings would increase annual pre-tax interest expense by **$0.9 million**[272](index=272&type=chunk) - Inflation affects costs for food, paper, construction, utilities, and labor, which the company attempts to offset through menu price adjustments and productivity improvements[274](index=274&type=chunk) - The company is exposed to commodity price fluctuations, particularly for chicken, and does not currently use financial instruments to hedge this risk[275](index=275&type=chunk) [Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of June 26, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 26, 2024[279](index=279&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 26, 2024[280](index=280&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in various ordinary course claims and legal actions but is not a party to any material legal proceedings - The company states that it is not party to any material legal proceedings, although it is involved in various ordinary course claims[282](index=282&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 27, 2023, have been reported - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 27, 2023, have been reported[283](index=283&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section details the company's common stock repurchases during Q2 2024, totaling 1,752,080 shares, including repurchases under its public program and a separate agreement Share Repurchases (Quarter Ended June 26, 2024) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 28 - April 24, 2024 | 71,908 | $8.86 | | April 25 - May 22, 2024 | 79,369 | $10.00 | | May 23 - June 26, 2024 | 1,600,803 | $9.82 | | **Total** | **1,752,080** | **N/A** | - Of the total shares repurchased, **203,483** were under the public Share Repurchase Program, **14,294** were to satisfy employee tax withholdings, and **1,534,303** were under a separate agreement with FS Equity Partners[286](index=286&type=chunk)[287](index=287&type=chunk) - Approximately **$4.2 million** remained available for repurchase under the publicly announced plan as of June 26, 2024[285](index=285&type=chunk) [Exhibits](index=83&type=section&id=Item%206.%20Exhibits.) This section provides an index of exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibit index lists key corporate documents and required certifications, such as the CEO and CFO certifications under Section 302 and Section 906 of the Sarbanes-Oxley Act[292](index=292&type=chunk)[293](index=293&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 increased by 0.6% to $122.2 million compared to $121.5 million in Q2 2023 [19] - Company-operated restaurant revenue decreased by 1.5% to $102.3 million from $103.9 million in the same period last year [20] - Restaurant contribution margin improved to 18.6%, a 170 basis point increase from 16.9% in the prior year [24] - GAAP net income rose to $7.6 million or $0.25 per diluted share, compared to $7.1 million or $0.20 per diluted share in the prior-year period [25] Business Line Data and Key Metrics Changes - Franchise revenue increased by 15.1% to $11.7 million, driven by a 5.3% increase in franchise comparable restaurant sales [21] - Company-operated comparable restaurant sales increased by 3.2%, with an 8.8% increase in average check size and a 5.2% decrease in transactions [20] Market Data and Key Metrics Changes - System-wide comparable store sales increased by 1.9% through July 30, 2024, with a 0.3% increase in company-operated restaurants and a 2.8% increase in franchise restaurants [21] - Labor wage inflation was approximately 15% for company-owned locations, with California restaurants experiencing a 17% increase due to the minimum wage hike [23] Company Strategy and Development Direction - The company focuses on five strategic pillars: brand that wins, hospitality mindset, digital first, delivering winning unit economics, and driving unit growth [9] - The company aims to reduce new unit build costs to around $1.8 million while modernizing its brand image [16] - The company is committed to enhancing its digital assets to improve customer experience and drive repeat business [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macroeconomic environment but sees opportunities to showcase the brand's value proposition [8] - The company expects to see benefits from cost-saving initiatives starting in Q4 2024, aiming for restaurant contribution margins of 18% by 2025 [15][24] - Management is optimistic about sales momentum despite mixed data in July [34] Other Important Information - The company plans to complete its kiosk rollout by the end of the year, enhancing customer experience and operational efficiency [14] - The company has repurchased approximately 1.5 million shares for $15 million under a stock repurchase agreement [27] Q&A Session Summary Question: How does the company interpret underlying consumer demand? - Management sees a mixed bag in consumer demand, with some noise in the data due to promotional timing and overall consumer softness [30][32] Question: How are California stores performing compared to those outside? - There is a slight decline in traffic in California compared to other markets, but overall performance is representative of the system [36][42] Question: What are the main drivers for margin expansion from 2024 to 2025? - Margin expansion will be broad-based, including labor productivity improvements and cost of goods initiatives [37][38] Question: What is the status of family meals in the value proposition? - Family meals remain under pressure but are still a significant part of the value proposition [52][54] Question: What are the cost-saving measures in the new unit prototype? - Cost savings come from reducing unit size, optimizing equipment specifications, and simplifying design features [58][59]

El Pollo Loco Holdings (LOCO) reported $122.18 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 0.6%. EPS of $0.26 for the same period compares to $0.23 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $121.06 million, representing a surprise of +0.93%. The company delivered an EPS surprise of +23.81%, with the consensus EPS estimate being $0.21.While investors scrutinize revenue and earnings changes year-over-year and how they compare ...

El Pollo Loco Holdings (LOCO) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 23.81%. A quarter ago, it was expected that this Tex-Mex fast food chain would post earnings of $0.14 per share when it actually produced earnings of $0.22, delivering a surprise of 57.14%.Over the last four ...

Exhibit 99.1 El Pollo Loco Holdings, Inc. Announces Second Quarter 2024 Financial Results COSTA MESA, CA – August 1, 2024 – El Pollo Loco Holdings, Inc. (Nasdaq: LOCO) today announced financial results for the 13-week period ended June 26, 2024. Highlights for the second quarter ended June 26, 2024 compared to the second quarter ended June 28, 2023 were as follows: ● Total revenue was $122.2 million compared to $121.5 million. ● System-wide comparable restaurant sales (1) increased by 4.5%. ● Income from op ...