Q2 2024 El Pollo Loco Holdings Inc Earnings Call Transcript
Key Points
- El Pollo Loco Holdings Inc (LOCO) reported a 4.5% increase in system-wide comparable restaurant sales, driven by their iconic fire-grilled chicken and focus on everyday value.
- The company achieved an 18.6% restaurant-level margin, a 170 basis point improvement from the previous year, indicating better operational efficiency.
- El Pollo Loco Holdings Inc (LOCO) was named the nation's number one best restaurant for quick, healthy food by USA Today, highlighting its strong consumer value proposition.
- The company is making progress on reducing new unit build costs to around $1.8 million, which is expected to drive future franchise growth.
- El Pollo Loco Holdings Inc (LOCO) is focusing on digital-first initiatives, including offering better deals to loyalty members, which is expected to enhance customer experience and drive repeat business.
- Company-operated restaurant revenue decreased by 1.5% due to the refranchising of 19 company-operated restaurants, impacting overall revenue growth.
- The company experienced a 5.2% decrease in transactions, indicating potential challenges in maintaining customer traffic.
- Labor and related expenses increased by 100 basis points year-over-year, driven by wage inflation, particularly in California.
- Family meals, a significant part of the company's value proposition, remain under pressure, affecting overall sales mix.
- The rollout of kiosks has been delayed to ensure customer service quality, potentially impacting labor cost savings and operational efficiency.
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco second quarter 2021 earnings conference call. (Operator Instructions) Please note that this conference is being recorded today, August 1, 2024.
And now I would like to turn the conference over to Ira Fils, the company's Chief Financial Officer. Please go ahead, sir.
Thank you, operator, and good afternoon, everyone. By now, everyone should have access to our second quarter 2024 earnings release. If not, it can be found at www.elpolloloco.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 operating initiatives, expectations regarding sales and margins, potential changes to our product platforms, capital expenditure plans, expectations regarding
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