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- **Revenue Growth**: Q3 revenue $121.5M (+1.0% YoY), driven by franchise expansion and new units. Q4-to-date sales up 2.2%.
- **Margin Expansion**: Restaurant-level margin 18.3% (vs. 16.7% YoY), targeting 17.5%-17.75% for 2025. Long-term margin goal 18%-20%.
- **Innovation Success**: $9.99 quesadilla combos, burrito bowls, and remodels delivered mid-single-digit sales lift. 2026 pipeline includes Loco Tenders, fire-fried chicken, and Double Pollo salads.
- **Unit Growth**: 10+ new restaurants in 2025, 2026 target to double openings. Second-gen sites reduce costs by 30%.
- **Efficiency Gains**: Labor costs down 200bps, digital sales 27% of system, loyalty transactions up 28% YoY.

**【CEO Opening Remarks】**
- **Revenue Growth**: Total revenue of $121.5 million, up 1.0% year-over-year, driven by franchise revenue growth (13.5%) and new unit openings. Company-operated sales decreased 0.5% due to comparable store sales decline, offset by new restaurant openings.
- **Traffic and Sales**: System-wide traffic increased 1.6%, with franchise traffic up 2.5%. Q4-to-date sales growth of 2.2% (1.5% company, 2.5% franchise) reflects strong momentum despite macro challenges.
- **Menu Innovation**: Launch of $9.99 quesadilla combos, app-only promotions, and new burrito bowls drove traffic without margin dilution. Q3 menu innovation (Creamy Chipotle quesadillas, Double Chicken bowls) showed sustained demand, with 2026 pipeline including Double Pollo salads, Loco Tenders, and fire-fried chicken sandwiches.
- **Operational Excellence**: Customer complaints at 3-year low, digital sales at 27% of system sales (vs. 20% in 2024), and loyalty transactions up 28% YoY. Franchisee remodels (50% of system) delivered mid-single-digit sales lift.
- **Unit Growth**: 10+ new restaurants opened in 2025, with 2026 target to almost double development pace. Second-generation sites (50% of 2025 openings) reduce costs and improve returns. 2025 remodels on track for 55+ restaurants, with 35+ planned for 2026.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Company-operated revenue $100.7M (-0.5%), franchise revenue $12.9M (+13.5%). Effective price increase 2.8%, offset by 1.3% check decline.
- **Cost Management**: Food/paper costs 24.7% (down 40bps), labor 30.4% (down 200bps) due to efficiency gains. Occupancy/other up 26.5% (70bps) due to delivery fees and remodels.
- **Margins**: Restaurant-level margin 18.3% (vs. 16.7% YoY). Q4 guidance: 16.75%-17.25%, full year 17.5%-17.75%. Long-term target 18%-20%.
- **Expenses**: G&A up 10.2% (70bps) due to legal fees, ERP, and relocation. Commodity inflation flat for 2025, wage inflation 3%-3.5%.
- **Liquidity**: $61M debt, $10.9M cash. Post-Q3, debt reduced to $55M. 2025 capex $28M-$30M, tax rate 29%-29.25%.

**【Q&A Highlights】**
- **Market Share**: Outperforming peers in California with positive sales and transactions, driven by value, innovation, and operational improvements.
- **Q4 Outlook**: Despite macro challenges, Q4 sales growth (2.2% to date) and margin expansion (18.3% Q3) suggest resilience. 2026 cost savings initiatives (labor, supply chain) to support margin expansion.
- **Menu Testing**: Loco Tenders and fire-fried chicken sandwiches in testing, with potential Q2 2026 launch. Beverage and dessert innovation (flan, churros) to protect check average.
- **Supply Chain**: 2026 chicken contracts secured with minimal pressure, focusing on pre-marination consistency and cost savings.
- **Immigration Impact**: Ongoing lunch traffic challenges in Southern California, but dinner sales remain stable.

El Pollo Loco Holdings, Inc. (LOCO) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: Q2 revenue up 3.0% YoY to $125.8M, driven by 1.2% company-operated sales growth and 14.8% franchise revenue increase.
- **Margin Expansion**: Restaurant contribution margin improved to 19.1% (vs. 18.6% YoY), with food and labor cost efficiencies.
- **Digital Success**: Digital sales at 25.5% of total, Loco Rewards member frequency up 5.6% YoY.
- **Unit Growth**: 10-11 new units in 2025, 55-65 remodels, with remodeled units seeing mid-single-digit sales uplift.
- **Menu Innovation**: Fresca wraps/salads and quesadillas driving traffic, with pricing strategy balanced by targeted discounts.

**【CEO Summary Section】**
- Q2 sales showed modest sequential improvement, with system-wide traffic growth driven by targeted discounting (e.g., Taco Tuesday, app-only offers) without compromising everyday menu pricing.
- Year-over-year margin expansion achieved through operational excellence, with both restaurant-level and corporate profitability growth.
- New menu innovations, including Fresca Wraps/Salads and premium chicken quesadillas, are gaining traction, with quesadillas launched in June and early sales momentum.
- Digital business grew to 25.5% of sales (vs. 17.1% in Q2 2024), with Loco Rewards member frequency up 5.6% YoY.
- Unit development accelerated, with 10+ new restaurants expected in 2025 (largest since 2022), including the 500th location in Colorado Springs.
- 55-65 remodels planned for 2025, with 20已完成 by Q2, driving mid-single-digit sales uplift in remodeled units.

**【CFO Financial Commentary】**
- Q2 2025 revenue: $125.8 million (+3.0% YoY), driven by 1.2% company-operated comparable sales growth and 14.8% franchise revenue increase.
- Restaurant contribution margin improved to 19.1% (vs. 18.6% YoY), with food costs down 70bps and labor costs down 130bps YoY.
- GAAP net income: $7.1 million ($0.24 EPS) vs. $7.6 million ($0.25 EPS) in Q2 2024; adjusted net income: $8.2 million ($0.28 EPS) vs. $7.8 million ($0.26 EPS).
- 2025 guidance: 10-11 new units, $31-34M capex, $48-51M G&A, 29-29.5% tax rate.

**【Q&A Key Highlights】**
- **Macro Environment**: Consumer chopiness persists, but targeted value initiatives (e.g., family meal discounts) are driving traffic despite check pressure.
- **Franchise Dynamics**: Franchise traffic +1.5% YoY in Q2, offsetting 1.1% comparable sales decline; franchisees experimenting with localized promotions.
- **Unit Growth Confidence**: Franchisees driven by $2.4M AUV, 19%+ restaurant margins, and cost-efficient remodels (e.g., repurposed sites reducing build costs by 50%).
- **Menu Innovation Impact**: Fresca wraps/salads mix 4-5%, quesadillas launched in June with early sales momentum; media rollout to accelerate in Q3.
- **Pricing Strategy**: 2.5-2.7% Q3 price increases focused on combos and high-margin items, balanced with discounting to maintain traffic.
- **Remodel Results**: 7 remodeled units with new design saw mid-single-digit sales uplift, supporting 17.25-17.75% full-year margin target.

El Pollo Loco Holdings, Inc. (LOCO) Q2 2025 Earnings Call Transcript

- **Revenue Growth Driven by Franchise Expansion**: 16.2% franchise revenue increase highlights strong partner engagement, with 10+ new units planned for 2025.
- **Innovative Pricing Strategy**: 3% menu price increase in 2025 balances affordability with margin protection, supporting 17.25-17.75% restaurant margin target.
- **Operational Efficiency Gains**: 120bps labor cost reduction and 120bps food cost savings demonstrate disciplined expense management.
- **Expansion Acceleration**: 500th location milestone signals confidence in national growth, with 60-70 remodels modernizing brand appeal.
- **Consumer Resilience**: Despite Q1 underperformance, Q3/Q4 product pipeline (quesadillas, fresco wraps) positions for recovery.

**【CEO Summary Section】**
- **Revenue Growth**: Total revenue increased 2.6% YoY to $119.2 million, driven by franchise revenue growth (16.2%) and new product launches like Mango Habanero chicken.
- **Menu Innovation Success**: Mango Habanero launch drove trial and repeat visits, with Q2 product pipeline including fresco wraps (May) and quesadillas (June) priced at $7.99-$9.99.
- **Operational Improvements**: 100% of company restaurants now use kiosks for order accuracy, and new equipment (e.g., holding cabinets) reduced labor costs by 120bps in Q1.
- **Expansion Plans**: 10+ new restaurants expected in 2025 (80% outside California), including first 500th location in Arizona/Colorado. 60-70 remodels planned for 2025 to refresh brand image.

**【CFO Financial Commentary】**
- **Profitability**: Restaurant contribution margin 16% (vs. 17.6% YoY), with 2025 full-year target of 17.25-17.75%.
- **Cost Control**: Food/paper costs down 120bps to 25.2%, labor efficiency improved 120bps despite 12% wage inflation.
- **Expense Management**: G&A expenses down 80bps to 9.5% of revenue, driven by restructuring savings and legal settlements.
- **Liquidity**: $73M debt, $4.3M cash, with $30-34M capex budget for 2025.

**【Q&A Key Takeaways】**
- **Q2 Outlook**: Sequential improvement expected in Q3/Q4, with easier comps and new product launches. Q2 system-wide comps down 1.2% YTD, but pricing (3% YoY) offsetting wage inflation (4-5% expected for 2025).
- **Labor Efficiency**: 2-2.5% wage inflation expected in H2, supported by equipment investments and operational process improvements.
- **Franchise Momentum**: 10+ franchise openings in 2025, with pipeline accelerating for 2026 (no specific numbers yet). Franchisees actively converting underperforming locations.
- **Tariff Impact**: Minimal risk due to domestic chicken sourcing, but monitoring broader industry impacts on build costs.

El Pollo Loco (LOCO)-1 May 25-2025 Q1 Earnings call transcript

- **Revenue Growth**: Q4 2024 revenue $114.3M (+1.8% YoY), driven by 1.6% comp sales growth and new units. 
- **Margin Expansion**: Restaurant contribution margin 16.7% (vs 15.8% YoY), targeting 17.25%-17.75% in 2025. 
- **Innovation Success**: Mango Habanero products drove bone-in chicken mix shift; quesadilla launch in summer 2025. 
- **Growth Ambitions**: 10 new units in 2025, 80 remodels, and 500th non-CA restaurant opening. 
- **Franchise Momentum**: Franchise pipeline growing, with conversions reducing build costs to ~$1M. 
- **Cost Control**: 2025 wage inflation 5%-6%, offset by menu pricing and labor deployment improvements. 


**【CEO Summary Section】**
- **Brand Transformation Progress**: Achieved 190 basis point improvement in restaurant contribution margin to 17.4% in 2024, driven by cost savings and operational efficiency. 
- **Culinary Innovation Success**: Mango Habanero chicken and tostada salad launched in Q4 2024, driving trial and sales growth. Quesadilla launch in summer 2025 priced at $9-$10, combining innovation and value. 
- **Growth Initiatives**: 10 new units planned for 2025 (1 in California, 9 in emerging markets like Texas, Arizona). 500th restaurant outside California to open in Q2 2025. 
- **Remodel Program**: 80 remodels (40 company-operated, 40 franchise) planned for 2025, targeting 17.25%-17.75% restaurant contribution margin. 
- **Franchise Expansion**: Franchise pipeline growing, with conversions of closed competitor locations reducing build costs to ~$1M. 

**【CFO Financial Commentary】**
- **Q4 2024 Results**: Total revenue $114.3M (+1.8% YoY), GAAP net income $6M ($0.20 EPS). Restaurant contribution margin 16.7% vs 15.8% YoY. 
- **Cost Management**: Food/paper costs down 180bps to 25.1%, labor up 10bps to 32.4% (impacted by CA $20/hour wage). 2025 wage inflation expected 5%-6%. 
- **2025 Guidance**: 1-2 company units, 8-9 franchise units. CapEx $30M-$34M (primarily remodels). G&A $48M-$51M. 

**【Q&A Highlights】**
- **Remodel Impact**: Early data shows positive sales lift; 2025 remodels will balance low-cost refreshes with full remodels. 
- **Franchise Pipeline**: Increased franchisee engagement due to improved margins, lower build costs ($1.8M prototype), and successful innovation. 
- **Margin Confidence**: 2025 margin expansion driven by supply chain optimization, labor productivity (e.g., new holding cabinets saving 30 mins per shift). 
- **Wildfires Impact**: Minimal sales impact in Q1 2025; all affected restaurants operational. 
- **Innovation Cadence**: 2025 calendar includes wraps, quesadillas, and 2+ new flavors, balanced with operational feasibility. 


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