Fast food chain El Pollo Loco (NASDAQ: LOCO) fell short of the markets revenue expectations in Q3 CY2025, with sales flat year on year at $121.5 million. Its non-GAAP profit of $0.27 per share was 26.2% above analysts’ consensus estimates.
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El Pollo Loco (LOCO) Q3 CY2025 Highlights:
- Revenue: $121.5 million vs analyst estimates of $124 million (flat year on year, 2% miss)
- Adjusted EPS: $0.27 vs analyst estimates of $0.21 (26.2% beat)
- Adjusted EBITDA: $17.42 million vs analyst estimates of $15.56 million (14.3% margin, 12% beat)
- Operating Margin: 9.4%, up from 8.4% in the same quarter last year
- Locations: 498 at quarter end, up from 496 in the same quarter last year
- Same-Store Sales were flat year on year (2.7% in the same quarter last year)
- Market Capitalization: $285.3 million
Liz Williams, Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “Our third quarter results demonstrated the progress we are making across all aspects of our business. While our comparable store sales experienced a small decline, we are particularly pleased with our positive traffic growth during the quarter as we implemented targeted value and innovations that not only drove restaurant visits but also enhanced our brand equity. Our ongoing focus on operational excellence allowed us to deliver margin expansion at both the restaurant and corporate level. Our unit growth momentum continued with the opening of our 500th El Pollo Loco restaurant, and as we are building a pipeline that will almost double unit openings next year. As we look ahead, we remain laser-focused on executing against our five strategic pillars and continuing on our path of being the nation’s favorite fire-grilled chicken restaurant.”
Company Overview
With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ: LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $480.8 million in revenue over the past 12 months, El Pollo Loco is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.
As you can see below, El Pollo Loco’s sales grew at a weak 1.4% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as its restaurant footprint remained unchanged and it barely increased sales at existing, established dining locations.
This quarter, El Pollo Loco’s $121.5 million of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months. Although this projection suggests its newer menu offerings will spur better top-line performance, it is still below the sector average.
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Restaurant Performance
Number of Restaurants
A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.
El Pollo Loco listed 498 locations in the latest quarter and has kept its restaurant count flat over the last two years while other restaurant businesses have opted for growth.
When a chain doesn’t open many new restaurants, it usually means there’s stable demand for its meals and it’s focused on improving operational efficiency to increase profitability.
Same-Store Sales
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
El Pollo Loco’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.5% per year. Given its flat restaurant base over the same period, this performance stems from a mixture of higher prices and increased foot traffic at existing locations.
In the latest quarter, El Pollo Loco’s year on year same-store sales were flat. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if El Pollo Loco can reaccelerate growth.
Key Takeaways from El Pollo Loco’s Q3 Results
We were impressed by how significantly El Pollo Loco blew past analysts’ EPS and EBITDA expectations this quarter. On the other hand, its revenue and same-store sales fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 6.6% to $9.65 immediately after reporting.
So should you invest in El Pollo Loco right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
