El Pollo Loco beats Q2 revenue estimates

Overview

• El Pollo Loco Q2 revenue rises to $125.8 mln, beating analysts' expectations

• Adjusted EPS for Q2 beats consensus

• Company saw modest sequential improvement in overall sales despite negative sales performance

Outlook

• El Pollo Loco plans to open 10-11 new restaurants in 2025

• Company expects capital spending of $31-34 mln in 2025

• G&A expenses projected at $48-51 mln, excluding one-time costs

• Effective tax rate estimated at 29%-29.5%

Result Drivers

• MENU INNOVATIONS - Introduction of Fresca Wraps, Salads, and premium Quesadillas contributed to sales growth, per CEO Liz Williams

• PRICE INCREASES - Company-operated restaurant revenue rose due to a 1.5% increase in average check size from menu price hikes

• FRANCHISE IT REVENUE - Franchise revenue increased due to IT pass-through revenue from new POS system rollout

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for El Pollo Loco Holdings Inc is $15.00, about 29.1% above its July 30 closing price of $10.63

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nGNX7PrKh4