El Pollo Loco (LOCO) Q3 2024 earnings summary

Executive summary

• Total revenue for Q3 2024 was $120.4 million, flat year-over-year; system-wide comparable sales increased 2.7%.

• Net income for Q3 2024 was $6.2 million ($0.21 per diluted share), down from $9.2 million ($0.28) last year; adjusted net income was $6.3 million ($0.21).

• Company-operated comparable restaurant sales rose 2.8% for Q3, driven by an 11.3% increase in average check and a 7.6% decline in transactions.

• Focused on value-driven menu innovation, cost savings, and modernizing restaurant design to stimulate future growth.

• Emphasizing national expansion, digital engagement, and operational efficiency as key strategic pillars.

Financial highlights

• Company-operated restaurant revenue decreased 1.5% to $101.2 million in Q3 2024 due to refranchising, partially offset by a 2.8% increase in comparable sales.

• Franchise revenue increased 10.5% to $11.3 million, aided by new openings and refranchising.

• Restaurant contribution margin improved to 16.7% from 14.4% year-over-year.

• Adjusted EBITDA for Q3 2024 was $15.5 million, up 3% from Q3 2023.

• General and administrative expenses rose to $11.4 million, mainly due to higher labor-related costs.

Outlook and guidance

• Q4 system-wide comparable store sales to finish slightly positive, with improved trends expected.

• 2024 restaurant contribution margin guidance raised to 16.75%-17.25%, a 150 basis point improvement at midpoint.

• 2024 guidance: two company and three to four franchised restaurant openings, $21M-$23M in capital spending, G&A expenses of $45M-$47M, and adjusted tax rate of 27.5%-28%.

• Expecting to approach 18% restaurant-level margins in 2025.

• Plans to complete 2-4 company-operated and 5-10 franchise remodels in the remainder of 2024.