The following is a summary of the El Pollo Loco Holdings, Inc. (LOCO) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Total revenue for Q2 2024 slightly increased by 0.6% to $122.2 million from $121.5 million in Q2 2023.

• Company-operated restaurant revenue decreased by 1.5% due to refranchising, but was partly offset by a 3.2% increase in company-operated comparable restaurant sales.

• Restaurant contribution margin improved significantly to 18.6% from 16.9% last year, highlighting cost control and operational improvements.

Business Progress:

• Launched new fire-grilled burritos with handmade guacamole aimed at enhancing value perception.

• Introduced limited-time offer of double chopped salads with chicken and shrimp, following prior success.

• Relaunched value promotions with a focus on affordability through kiosk rollouts, expected to be completed by end of the year.

• Development of a new unit prototype with a reduced build cost of around $1.8 million to encourage franchise growth and modernize the brand image.

Opportunities:

• System-wide comparable restaurant sales increased by 4.5%, indicating robust brand performance and customer acceptance.

• Achieved positive feedback on newly launched products, indicating potential for sustained demand.

Risks:

• Faced challenges due to macroeconomic conditions affecting the industry, leading to a strategic reduction in discounting and subsequent impact on traffic.

• Anticipated uneven growth with 'hot and cold' cycles due to discontinuing old format discounting, adjusting to new product introductions and seasonal variations.

More details: El Pollo Loco IR

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