El Pollo Loco Holdings Stock Earnings Reports

El Pollo Loco reported modest revenue growth with clear operational momentum in Q3 2025: system revenue was $121.5M (vs. $120.4M YoY), company-operated sales were slightly down (-0.5%) but system-wide traffic grew +1.6% (franchise traffic +2.5%). Management highlighted positive comparable trends into October (Q4-to-date comp +2.2%) and emphasized that marketing, menu innovation (notably quesadillas, new bowls, upcoming tenders and a fire-fried sandwich) and operational improvements drove positive traffic while protecting margins. Restaurant-level contribution margin expanded to 18.3% (up 160 bps YoY); full-year restaurant margin guidance is 17.5%–17.75% with a longer-term target of 18%–20%. Unit growth accelerated: the company opened its 500th restaurant, finished 34 remodels YTD with at least 55 planned for 2025, and expects to open at least 10 restaurants in 2025 with plans to nearly double development pace in 2026 (company and franchise-backed). Digital sales are growing (digital = 27% of system sales, loyalty transactions +28% YoY) and kiosk rollouts are ~50% systemwide. Cost dynamics: food & paper improved (24.7% of company restaurant sales, aided by ~100 bps commodity deflation in Q3), labor improved (30.4% of sales), and commodity exposure is manageable with chicken contracts favorable for next year. Liquidity: $61M debt and $10.9M cash at quarter end, with subsequent revolver paydown to $55M. 2025 guidance highlights: at least 10 openings, capex $28M–$30M, G&A $47.5M–$49.5M (ex-ones), and an effective tax rate ~29%–29.25%. Key risks noted include macro demand softness, regional headwinds (California) and execution risks on new openings/remodel sequencing.