Q4 2025 El Pollo Loco Holdings Inc Earnings Call Transcript
Key Points
- El Pollo Loco Holdings Inc (LOCO) reported strong fourth-quarter results with a positive same-store sales growth, indicating successful brand turnaround efforts.
- The company achieved better-than-expected restaurant-level margins through strategic investments and operational excellence.
- El Pollo Loco Holdings Inc (LOCO) successfully expanded its restaurant-level contribution margins, demonstrating profitability while investing in customer value and traffic-driving initiatives.
- The company launched successful menu innovations, such as the double chicken street corn and queso crunch burrito bowls, which exceeded expectations and were made permanent menu items.
- El Pollo Loco Holdings Inc (LOCO) is experiencing strong digital engagement, with a 20% year-over-year growth in loyalty revenue and participation rate, driven by app-based promotions and targeted value offers.
- Despite a 2.7% increase in average check size, the company experienced a 2.3% decrease in transactions during the fourth quarter.
- Labor and related expenses remain a challenge, although they decreased as a percentage of sales, indicating ongoing pressure from wage inflation.
- Occupancy and other operating expenses increased due to higher utilities, software maintenance fees, and rent, impacting overall cost management.
- General and administrative expenses rose due to incremental labor costs, severance, and executive transition costs, affecting overall profitability.
- The company faces challenges in maintaining traffic growth, with a focus on driving positive traffic being a primary goal for the upcoming year.
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco fourth quarter 2025 earnings conference call. (Operator Instructions) Please note that this conference is being recorded today, March 12, 2026.
And now I would like to turn the conference over to Ira Fils, the company's Chief Financial Officer.
Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2025 earnings release which can be found at el pollooco.com in the investor relations section. Before we begin our formal remarks, I need to remind everyone that our discussions today will include forward-looking statements, including statements related to our growth opportunities, strategic and operational initiatives, expectations regarding sales and margins, potential changes to our product platforms, capital expenditure plans, the ability of our franchisees to drive growth, expectations regarding commodity and wage inflation. Remodel plans and our 2026
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