The following is a summary of the El Pollo Loco Holdings, Inc. (LOCO) Q1 2024 Earnings Call Transcript:

Financial Performance:

• El Pollo Loco reported a total revenue increase of 1.4% to $116.2 million in Q1 2024, compared to $114.5 million in Q1 2023.

• Company-operated restaurant revenue saw a decline of 0.7% while franchise revenue rose by 17.3% due to increased sales and franchise restaurant openings.

• For Q1 2024, the restaurant contribution margin was 17.6%, an improvement from the 15% in Q1 2023.

• General and administrative expenses increased by 50 basis points year-on-year, amounting to 10.3% of total revenue.

• The GAAP net income for Q1 2024 was $5.9 million, or $0.19 per diluted share, a boost from $4.9 million or $0.13 per diluted share in Q1 2023.

Business Progress:

• New CEO Liz Williams revealed a five-pillar strategic plan that includes a winning brand, hospitality mindset, digital first approach, improved unit economics, and unit growth.

• As part of its digital strategy, consumer-facing technology investments are ongoing, with plans to roll out kiosks in all company-owned restaurants by summer 2024.

• El Pollo Loco is undertaking efforts to reduce build costs for their restaurant prototype to improve growth and margins.

• Increased support has been offered to franchise operators with the launch of new development incentives.

• In order to cater to diverse consumer preferences, the company is using its varied menu by offering both value meals and premium items.

• El Pollo Loco is making strides in development, with the first step being reduction of unit costs. More details are expected to be shared in upcoming disclosures.

• The company has acknowledged the need to compete in promotional activities and is also working on providing everyday value across their menu, especially aiming at the sub-$10 price range products.

More details: El Pollo Loco IR

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