The 'Fast-Food Exodus' has led to declining traffic for Pollo Loco, despite its high value scores and recent franchising expansion. Pollo Loco's traffic is down due to limited menu innovation and higher prices, even as it maintains positive comparable sales through price increases and mix improvements. Despite cost efficiency and margin growth, Pollo Loco faces challenges in California due to labor cost inflation and competition from QSR value promotions.
El Pollo Loco (LOCO) is technically in oversold territory now, so the heavy selling pressure might have exhausted. This along with strong agreement among Wall Street analysts in raising earnings estimates could lead to a trend reversal for the stock.
El Pollo Loco (LOCO) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).
El Pollo Loco Holdings, Inc. (LOCO) Q3 2024 Earnings Call Transcript
The headline numbers for El Pollo Loco (LOCO) give insight into how the company performed in the quarter ended September 2024, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
El Pollo Loco Holdings (LOCO) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.19 per share a year ago.
The year has seen more restaurant and fast-food chain CEO turnover than the previous three years combined. The reason: Inflation-wracked customers are eating out less frequently and making new demands.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
El Pollo Loco stock is at a near three-year high amid strong financial results. The company's effort to transfer restaurants to franchisees is supporting higher profitability margins. We see good value in LOCO and expect shares to climb higher.
Restaurant stocks like Yum China (YUMC), El Pollo Loco (LOCO), Texas Roadhouse (TXRH) and Potbelly (PBPB) will get a boost from the Fed's rate cut.
Strong August sales and the Fed Reserve's interest rate cut boost prospects for restaurant operators, including LOCO, TXRH and PBPB.
LOCO is benefiting from unit-build cost reductions and system-wide comparable restaurant sales growth.