El Pollo Loco(US:LOCO)2026-03-13 20:06Sales Performance - In fiscal 2025, company-operated same-store sales increased by 0.3%, while franchise-operated same-store sales remained flat, and system-wide same-store sales rose by 0.1%[245] - Company-operated comparable sales increased by 0.3%, with a 2.1% rise in average check size offset by a 1.8% decrease in transactions[273] - System-wide sales for fiscal year 2025 were $1,125,405,000, up from $1,095,716,000 in 2024, indicating a year-over-year increase of about 2.7%[297] Revenue Growth - Total revenue for fiscal 2025 was $490.0 million, reflecting a $17.0 million increase, or 3.6%, from the previous year[271] - Company-operated restaurant revenue increased by $9.6 million, or 2.4%, to $405.8 million in fiscal 2025 compared to fiscal 2024[272] - Franchise revenue rose by $6.8 million, or 15.0%, totaling $52.4 million in fiscal 2025, driven by IT pass-through revenue and new franchise locations[274] - Franchise revenue for fiscal year 2025 was $52,389,000, up from $45,561,000 in 2024, showing a growth of approximately 15.5%[304] Restaurant Operations - As of December 31, 2025, the company had 503 locations across nine states, with plans to open three to four new company-operated restaurants and 15 to 16 new franchise locations in 2026[242] - The company opened one new company-operated restaurant and franchisees opened eight new restaurants, while four franchise locations were closed[249] - The company completed 17 company-operated restaurant remodels and 52 franchise remodels in fiscal 2025, with plans for 25 to 35 company and 30 to 40 franchise remodels in fiscal 2026[250] - The average investment for restaurant remodels is approximately $0.4 million per restaurant, impacting cash flow and depreciation[250] Cost Management - Labor and regulatory compliance costs increased due to California legislation, with expectations for continued cost pressures in 2026[237] - The company experienced inflationary pressures affecting food, labor, and construction costs, which are anticipated to persist in 2026[238] - Food and paper costs decreased by $0.6 million, or 0.6%, as a percentage of company-operated restaurant revenue fell to 24.7% from 25.4%[277] - Labor and related expenses increased by $0.1 million, or 0.1%, with labor costs as a percentage of company-operated restaurant revenue decreasing to 31.4%[278] - Inflation has impacted food, labor, and administrative costs, with the company managing to offset some cost increases through menu price adjustments[363] Financial Performance - Net income for fiscal 2025 was $26.5 million, reflecting a $0.8 million increase, or 3.1%, from fiscal 2024[271] - Adjusted EBITDA for fiscal 2025 was $66.7 million, with a restaurant contribution margin of 17.8%[293] - Restaurant contribution margin for fiscal year 2025 was 17.8%, an improvement from 17.4% in 2024[306] - Adjusted EBITDA for fiscal year 2025 was $66,713,000, compared to $62,708,000 in 2024, representing an increase of approximately 6.4%[313] Capital Expenditures and Financing - Total capital expenditures for 2025 were $26.9 million, with $3.1 million for new restaurant development and $10.4 million for remodels[334] - The company expects to incur between $37 million and $40 million in total capital expenditures in 2026, including $8 million to $9 million for new restaurant construction[334] - Cash used in investing activities increased to $22.6 million in fiscal 2025, primarily due to increased purchases of property and equipment[325] - Cash used in financing activities decreased by $10.9 million in fiscal 2025, with share repurchases of $1.8 million compared to $20.6 million in fiscal 2024[326] Share Repurchase and Debt Management - On December 4, 2023, the company repurchased 1.5 million shares of common stock for a total purchase price of $12.6 million under the Stock Repurchase Program[338] - For the year ended December 31, 2025, the company repurchased 163,229 shares of common stock for a total purchase price of $1.8 million[340] - As of December 31, 2025, the company had outstanding borrowings of $51.0 million under the 2022 Revolver, with a margin of 1.5%[361] - During the year ended December 31, 2025, the company borrowed $9.0 million and paid down $29.0 million on the 2022 Revolver[362] Market Risks - The company is exposed to market price fluctuations in food product prices, which can materially impact food and beverage costs[364] - The company does not currently use financial instruments to hedge commodity risk, which may adversely affect results of operations[364]