El Pollo Loco(US:LOCO)2025-10-31 21:17Revenue and Sales Performance - Total revenue for the thirteen weeks ended September 24, 2025, was $121.5 million, with company-operated restaurant revenue at $100.7 million and franchise revenue at $20.8 million[168]. - System-wide comparable restaurant sales decreased by 0.8% for the thirteen weeks ended September 24, 2025, while company-operated restaurants saw a 1.1% decrease in comparable sales for the same period[169]. - Total revenue for the quarter was $121.520 million, an increase of 0.9% from $120.395 million in the comparable period of the prior year[227]. - Franchise revenue for the quarter ended September 24, 2025, increased by $1.5 million, or 13.5%, primarily due to franchisee IT pass-through revenue related to the new POS system[200]. - Franchise revenue year-to-date increased by $5.1 million, or 14.8%, primarily due to franchisee IT pass-through revenue related to the new POS system[201]. - Total revenue for the thirty-nine weeks ended September 24, 2025, was $366.5 million, compared to $358.7 million for the same period in 2024, representing a year-over-year increase of 2.2%[234]. Income and Expenses - Net income for the quarter ended September 24, 2025, was $7.36 million, representing an 18.9% increase from $6.19 million in the same quarter last year[194]. - Labor and related expenses decreased by $2.1 million, or 6.4%, for the quarter ended September 24, 2025, compared to the prior year[194]. - General and administrative expenses increased by $925,000, or 8.1%, for the quarter ended September 24, 2025, compared to the same period last year[194]. - Total expenses for the thirteen weeks ended September 24, 2025, were $110.06 million, a slight decrease of 0.2% from $110.26 million in the prior year[194]. - Restaurant contribution margin for the thirteen weeks ended September 24, 2025, was 18.3%, up from 16.7% for the same period in 2024[234]. Operational Developments - As of September 24, 2025, the company operated 498 locations, with three new openings in the thirty-nine weeks ended September 24, 2025, and the announcement of the 500th restaurant opening on October 14, 2025[165]. - The company completed 34 restaurant remodels during the thirty-nine weeks ended September 24, 2025, with an average investment of approximately $0.4 million per restaurant[171][173]. - Franchisees opened three new restaurants in the thirty-nine weeks ended September 24, 2025, while closing three in California[165]. - The company opened new restaurants, which typically experience a start-up period of approximately fourteen weeks before revenue and expenses normalize[235]. Customer Engagement and Loyalty - The Loco Rewards loyalty program had over 4.6 million members as of September 24, 2025, with $1.1 million in revenue allocated to unredeemed loyalty points[175]. - Comparable restaurant sales for company-operated restaurants increased by 0.2% year-to-date, driven by a 1.6% increase in average check size[169]. Financial Position and Liquidity - The company’s liquidity sources include cash from operations and the 2022 Revolver, which are deemed sufficient to finance operations for at least the next 12 months[246]. - The net increase in cash for the thirty-nine weeks ended September 24, 2025, was $8.4 million, compared to a net increase of $0.6 million for the same period in 2024[247]. - As of September 24, 2025, the company had $61.0 million in outstanding borrowings under the 2022 Revolver and $10.3 million in letters of credit, resulting in $78.7 million in borrowing availability[255]. Cost Management and Inflation - Labor and regulatory compliance costs increased due to California legislation, impacting fiscal 2024 and 2025, although the company has managed to offset some of these costs through menu price increases[159]. - The company expects ongoing inflationary pressures and potential tariff impacts to affect food and supply costs, which may not be fully offset in the future[162][163]. - Inflation has impacted costs related to food, labor, and general expenses, although the company has managed to offset some increases through menu price adjustments[261]. - The company is exposed to commodity price fluctuations, particularly in food product prices, which can materially affect food and beverage costs[262]. - The company has not used financial instruments to hedge commodity risk, which may adversely affect results of operations if cost increases are not passed on to customers[262].