El Pollo Loco Holdings (LOCO) Q1 2022 Earnings Call Transcript

El Pollo Loco Holdings (LOCO 1.90%)
Q1 2022 Earnings Call
May 04, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco first quarter 2022 earnings conference call. [Operator instructions] Please note that this conference is being recorded today, May 4, 2022. And now I'd like to turn the conference over to Larry Roberts, chief executive officer, interim chief financial officer.

Please proceed.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Thank you, operator, and good afternoon. By now, everyone should have access to our first quarter 2022 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 the impact of the COVID pandemic on our business and strategic actions we are taking in response, as well as our marketing initiatives, cash flow expectations, capital expenditure plans, and plans for new store openings, among others.

These forward-looking statements are not guarantees of future performance. And therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we currently expect. We refer you to our recent SEC filings, including our Form 10-K, for a more detailed discussion of the risks that could impact our future operating results and financial conditions.

We expect to file our 10-Q for the first quarter of 2022 tomorrow and would encourage you to review that document at your earliest convenience. During today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and reconciliations to comparable GAAP measures are available in our earnings release. With that, I'd like to touch on our first quarter results and the progress we are making on our strategic initiatives.

While the COVID resurgence heavily impacted our restaurant performance in January and early February, I'm pleased to say that the Omicron impact largely dissipated and became negligible in the second half of the quarter. Systemwide comparable restaurant sales increased 7.8% in the first quarter, including a 2.3% increase at company-owned restaurants and an 11.5% increase at franchise locations. From an earnings standpoint, COVID-related costs negatively impacted store-level income during the first quarter results by approximately $2.3 million, while commodity and labor inflation also continued to persist, which I will speak to in a moment. However, despite the challenges, our teams managed the external headwinds well, and we earned pro forma diluted earnings per share of $0.07.

More importantly, the launch of our shredded beef birria limited time offer on March 17 significantly accelerated our top-line momentum which has continued into the second quarter with systemwide comparable restaurant sales growth of 12.4% through April 27. This is our first promotion utilizing several new marketing strategies, so we were very excited by the positive results we are seeing and our prospects for the balance of the year. To further strengthen our business and accelerate growth in 2022 and beyond, we've been working on executing the four pillars of our strategic priorities during the quarter, which are culture, brand differentiation and awareness, customer service, and accelerated development. For today's call, I'd like to update you on two of the pillars.

The first pillar I would like to discuss is brand differentiation and awareness. What clearly distinguishes El Pollo Loco from other restaurant concepts is our food, and this was clearly demonstrated by the shredded beef birria launch. A couple of years ago, our team identified a popular California food trend in which shredded meat, housed in tacos and burritos, was dipped into a Mexican consommé and eaten similar to beef au jus. As we've said in the past, our food combines our Mexican roots with the culinary culture of Los Angeles, and our Beef Birria offering embodies this characteristic perfectly.

Our take on the product consists of marinated shredded beef birria served in tacos, quesadillas, and burritos and comes with a unique Mexican consommé dipping sauce, all served in a unique box with chips and salsa. The timing of the offer could not have been better for us as it coincided with the completion of new marketing strategies that have combined to make shredded beef birria one of, if not the most, successful new product launches we have ever implemented. Our marketing campaign refocused on what differentiates El Pollo Loco, which is our freshly prepared food, and significantly increased our emphasis on social media. Not only did we increase our marketing spend on social media, we created new, unique content across the major social media platforms, enabling us to send targeted messages to various user groups, particularly to our younger consumers.

As an example, we created a dip-n-drip TikTok campaign to promote our beef birria offerings using multiple influencers. The campaign has resulted in over 21 million social media impressions and thousands of pieces of organic, user-generated content created by customers online. We recently crossed 125,000 followers on TikTok, and the El Pollo Loco hashtag now has more than 120 million views on the platform. The shredded beef birria product and our messaging clearly resonated with our customers as we experienced a strong acceleration in our birria sales even before our TV marketing went live.

Shredded beef birria product mix reached 12.5%, which helped drive new company, franchise, and system sales records three weeks in a row during March and April. To build upon this excitement, we've promoted the birria burrito on National Burrito Day which resulted in a record sales day for the system. Sales mix for beef birria remained above 10% for six straight weeks. And as a result of this success, we are testing the use of the shredded beef product for future LTOs to further diversify offerings while still staying true to our L.A.-Mex positioning.

Next up on the marketing calendar are tostadas, which was our strongest limited-time offer promotion last year. Tostadas are a customer favorite, and we believe they will be successful once again, especially when combined with our new marketing tactics. Looking to the longer term, we are furthering our research and customer segmentation efforts. We believe that COVID has changed the way consumers access our brand, and we have active research underway in overall customer segmentation, value, and the family meal group occasion.

In addition, we continue to invest in our loyalty, delivery, and digital marketing platforms to improve the user experience and to more finely segment consumer data in order to increase the effectiveness of our promotions. These platforms continue to grow with e-commerce now contributing over 12% of our sales mix and delivery of approximately 8%. Needless to say, we are very excited by our marketing initiatives and believe that they will continue generating strong sales results. That brings us to our next pillar, customer service, which, because of employment issues, has been a challenge across certain segments of our company-operated restaurants.

While things have improved slightly, hiring and retaining employees has been challenging in a number of areas, especially Las Vegas and east of Los Angeles, where there's heavy competition from casinos and warehouse facilities. In addition to our cultural initiatives launched last year, we are taking additional actions to recruit, train, and retain team members. These include adding both external and internal recruiting resources, further wage adjustments, retention bonuses, revamped training programs, and other incentives. While these may result in incremental cost to our business, we are confident that they will be more than offset by increased sales from improved customer service.

While we have many company-operated restaurants executing at a high level, we are very focused on improving our operations. To improve execution, we have rolled out a new operation scorecard and tools to enable our area leaders and general managers to better manage their restaurants and remedy issues as they arrive. We've also made drive-thru execution the No. 1 priority for all our company-operated restaurants.

With approximately 55% of our sales coming via the drive-thru, we believe better execution has potential to significantly improve sales at company-operated restaurants. Longer term, we continue to work on initiatives to simplify our operations, including additional product reductions, revamp back-of-house processes, new equipment, and a revised menu board. As the gap between franchise and company sales performance demonstrates, many company-operated restaurants have a significant sales opportunity by improving their operations, especially at the drive-thru. As evidenced by our system sales, El Pollo Loco is resonating with consumers.

I'm confident that our company operations will significantly improve, which will just further strengthen our brand. In summary, we believe the strategic initiatives we put in place are gaining traction and positioning the El Pollo Loco brand to capture the opportunities ahead. Most importantly, I'd like to thank all of our team members and franchise partners for their passion, commitment, and dedication in making this brand and this family truly special. With that, let me briefly review our first quarter financial results in greater detail.

For the first quarter ended March 30, 2022, total revenue increased 2.2% to $110.1 million, compared to $107.7 million in the first quarter of 2022. Company-operated restaurant revenue decreased slightly to $94 million from $94.2 million in the same period last year. The decrease in company-operated restaurant sales was primarily due to a $2.6 million decrease due to the sale of eight company-owned restaurants to a franchisee during 2021 and $0.5 million from restaurants closed during the past year. The decrease was partially offset by a 2.3% increase in company-operated comparable restaurant sales and $1.1 million in noncomparable restaurant sales, which included restaurants temporarily closed due to the pandemic during last year's first quarter.

The increase in company-operated comparable restaurant sales was comprised of a 6% increase in average check and a 3.5% decrease in transactions. During the quarter, our effective price increase versus 2021 was 8.2%. As I mentioned earlier, our momentum continued into the second quarter. And through April 27, second quarter, systemwide comparable restaurant sales increased 12.4%, consisting of a 6.5% increase at company-owned restaurants and a 16.4% increase at franchise restaurants.

Franchise revenue was $9.3 million during the first quarter, compared to $7.6 million in the prior-year period. This increase was driven by a franchise comparable restaurant sales increase of 11.5%, as well as the opening of four new franchise restaurants during or subsequent to the first quarter of 2021 and revenue generated from eight company-owned restaurants sold to an existing franchisee during 2021. This was partially offset by the closure of two franchise restaurants during the same period. Turning to expenses.

Food and paper costs as a percentage of company restaurant sales increased 360 basis points year over year to 29.5% due to increased commodity costs and investments in new packaging, partially offset by higher menu prices. Commodity inflation during the first quarter was approximately 18%. We have yet to see any easing in commodity inflation and currently expect it to be approximately 21% in the second quarter and 18% for the full year. Labor and related expenses as a percentage of company restaurant sales increased 210 basis points year over year to 34.8% due to higher wage inflation, overtime costs, and other labor-related costs.

Based on the continued labor pressure that we're experiencing, we're expecting wage inflation of 7% to 8% for the full year. As I noted, during the first quarter, we incurred approximately $2.3 million of COVID-related expenses, including leave of absence and overtime pay. Occupancy and other operating expenses as a percentage of company restaurant sales increased 10 basis points to 25.4% due to higher marketplace delivery fees and utility costs, partially offset by lower operating supplies costs. Our restaurant contribution margin for the quarter was 10.3%.

Margins were especially challenged in January but recovered during the quarter to 14.3% in March. As I noted previously, effective pricing during the first quarter was 8.2% versus 2021. Due to continued commodity inflation, pricing in the second quarter will be approximately 9% and roughly the same for the full year. Our planned pricing may be adjusted based on economic conditions and consumer sentiment.

In addition to our pricing actions, we are currently testing cost-reduction initiatives to further mitigate the impact of labor and commodity inflation on our margins. General and administrative expenses decreased to $10 million from $10.5 million in the year-ago period, primarily due to a decrease in management bonus expense. As a percent of total revenue, G&A decreased approximately 70 basis points to 9%. We recorded a provision for income taxes of $0.9 million in the first quarter of 2022 for an effective tax rate of 30%.

This compares to a provision for income taxes of $1.6 million and an effective tax rate of 28.7% in the prior-year first quarter. We reported GAAP net income of $2.1 million or $0.06 per diluted share in the first quarter, compared to GAAP net income of $4 million or $0.11 per diluted share in the prior-year period. Pro forma net income for the quarter was $2.6 million or $0.07 per diluted share, compared to pro forma net income of $4.7 million or $0.13 per diluted share in the first quarter of last year. For a reconciliation of pro forma net income and earnings per share to the comparable GAAP measures, please refer to our earnings release.

Regarding development, during the first quarter, one company restaurant was opened in Las Vegas, and two franchise restaurants were opened in California. Turning to liquidity. As of March 30, 2022, we had $40 million of debt outstanding and $25.5 million in cash and cash equivalents. Lastly, due to the uncertainty surrounding the COVID-19 pandemic and current economic conditions, we won't be providing a full financial outlook for the year ending December 28, 2022.

However, we are providing the following limited guidance for fiscal 2022. The opening of three to six company-owned restaurants and six to 10 franchise restaurants; remodeling of 10 to 15 company-operated restaurants and 20 to 30 franchise restaurants; capital spend of $20 million to $25 million; and a pro forma income tax rate of 26.5%. This concludes our prepared remarks. I'd like to thank you again for joining us on the call today, and I'm now happy to answer any questions you may have.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from Jake Bartlett with Truist Securities. Please proceed.

Jake Bartlett -- Truist Securities -- Analyst

Great. Thanks for taking the question, and congrats, Larry, on the recent improvements. It's great to see in sales. My first question is you mentioned excitement in how much the beef -- shredded beef promotion has helped.

Do you attribute all the increased improvement to that? Or to what degree did increased staffing -- your ability to staff the restaurants and operate full hours contribute to that increase do you think?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Yeah. I think that may have helped a little bit, Jake. I do think though we really saw a big inflection point with launch of birria. We've been seeing steady, I'll call it, comp sales improvement through late February, early March on a pretty consistent basis.

But then the launch of the birria product with the marketing initiatives, really, as you just saw, again, an inflection point where it really accelerated to the point where we're seeing obviously high comp sales, and as I highlighted, record sales across the company, the franchisees, and the system for three straight weeks. So that product launch -- again, we were seeing improvements, but that product launch really accelerated that improvement.

Jake Bartlett -- Truist Securities -- Analyst

Great, great. That's good to hear. The next question is on the differential between average weekly or the same-store sales between the company and the franchise, and it sounded in your comments like you attribute a lot of that differential to operations and the franchisees just running better operations. The question is, is that true? Is that how you're looking at it now that really the operations is the opportunity to close that gap? Or I think, historically, over the last year or two, you've talked about the company stores being more impacted by labor shortages, just given where you have the stores.

So I'm wondering if you can differentiate or just disaggregate the impact of the pace of operations, the quality of operations versus just being in stores that are hindered by staffing more.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Sure, Jake, yeah. So let me first start by saying a huge shout-out to our franchisees and our franchise system. They have done really a phenomenal job of operating throughout COVID and throughout the current economic challenges. When you look at the ops metrics -- the key ops metrics, they continue to operate.

And throughout, they've operated at really high levels of execution. So a real shout-out to our franchisees, and we have a number of company restaurants operating at really high levels. But when I step back and look at the business and you see this sales gap between company and franchise, in general, it's entirely driven by transactions. So, for example, I think the first quarter, as I highlighted, we were down 3.5% in transactions.

Franchisees were plus 5%, and the franchisees have been consistently around 5% transaction growth, while we have generally been negative. So that immediately points to the execution in a number of our restaurants that is creating that gap. Now I will say a number of our company restaurants, especially as I highlighted in the call, in Vegas, and I'll call it the east of L.A., Inland Empire, the desert area, they are the most staffing challenged. And we have a little bit more exposure in those markets than franchisees, and so that's what we're really focused on.

But again, I just look at the way the franchisees have reacted. And remember, our franchisees tend to be small to midsized. And so when I look at and when I talk to the franchisees, I think the thing that stands out to me is they have been able -- they react very, very quickly to what's going on in the economic environment. So if they need to make changes quickly, they make it in days.

And quite frankly, while we think in the company we're moving fast, we're still taking too much time. In this environment, we have to move faster. We can't be taking three weeks to a month to make a decision. We need to be moving in days or weeks, and I think that's one area where the franchisees really excel.

I think it's an area that we can emulate our franchisees. And so me and my team are very focused on how do we accelerate the adjustments we need to make out in the restaurants where we're especially challenged around staffing to move faster, to make sure that we recruit and retain people. I think the other area where -- and I highlighted this a little bit on the call that we're really focused on now is we have a number of new employees in our restaurants. And so that really means we have to build what I would call know-how in the restaurants.

We have to build the knowledge in the restaurants. And obviously, one way around that is training. The other way is to be more prescriptive about what we want people to do from our area leaders down to our general managers, down to our team members, and really lay out in detail around here's what you do at certain points of the day for area leader, here's when you visit the restaurants, here's what your restaurant visits look like, here is the coaching you leave behind for them in writing. So we're getting more prescriptive as we try to build that knowledge base within our system.

And like I said, the other thing is just a maniacal focus on the drive-thru. In fact, we're launching -- we're retraining every company restaurant on the drive-thru on May 6, and then we're going to have a drive-thru incentive scheme, which will be, I think, fairly significant to really drive the execution of drive-thru. And I just really believe when you look at our ops metrics, fixing the drive-thru fixes a lot of things. And we have a lot of improvement we can make in the drive-thru in a number of our restaurants.

And so that's what we're really going to focus on, and that starts May 6 as we kick off the training and then, like I said, the incentive program to really drive the execution. So just to summarize, it's really around getting faster and how we react to the market conditions, really building know-how in our restaurants through being more prescriptive and more training and then really focus on the drive-thru, get maniacal about that because so much of our business goes through the drive-thru and so much of our consumer feedback and consumer experience is really driven by the drive-thru. So that's what we're focused on.

Jake Bartlett -- Truist Securities -- Analyst

Great. Thank you so much I appreciate it.

Operator

Our next question comes from Andy Barish with Jefferies. Please proceed.

Andy Barish -- Jefferies -- Analyst

Hey, Larry. Just trying to level set on some of the margin commentary. Obviously, there's about 250 basis points of COVID stuff in the first quarter, but then you left the quarter, as you mentioned, doing about 14% in March. Is that a good run rate on restaurant-level margins, again, taking into account some of what you just went through in terms of some incremental costs from retention and training and wages and things like that? How should we level set on restaurant-level margins here?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Yeah. As I look at the balance of the year and the things we have in place, especially on the pricing and some of the cost-reduction things we're working on, I think March is a starting point, but I expect to see a gradual improvement in margins through the end of the year. Starting out March, I'll call that mid-teens. Again, I would expect to improve every quarter and get up to, call it, the mid/upper teens by the end of the year.

Andy Barish -- Jefferies -- Analyst

Great. Thanks, very helpful. And I guess on the learnings from birria, it sounds like the consumer certainly associated a crazy chicken chain with beef for the last month or so. So what else did you learn from the birria and the beef promotion? And how might we see that return at different points later in the year or next year?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Well, I'll break it into two things. The first is the product itself with birria. Again, in Birria, you have the beef -- with the shredded beef product, and then you have the consommé. We are looking to test -- not test.

Actually, it's in test right now as a limited-time offer item as part of a mix. Some of it will be chicken. Some of it will be beef that we would look to do in what we call module 5, which we'd be kicking off, I think, early November. So we think there could be a place for beef at least in one more LTO, possibly even a full-time menu item at some point.

We're really looking at the full-blown birria that we're doing now as something we'll look at during next year as another LTO given the success, and we'll call it the birria 2.0. So we'll make some changes in terms of the product and the packaging, but we definitely see it as something that we could look to do again next year. So that's on the product side. The second piece is just around the approach to marketing that we've taken, and real kudos, a real shout-out to the marketing team and the way they execute against this.

And even the ops team, which we executed, we actually rolled out, I'll call it, pretraining for this product to make sure the execution was really strong as we rolled it out. But on the marketing side, you're just going to see more and more of what we do with birria. Again, it just happened to coincide with birria, these new marketing tactics that we wanted to put in place, which was, again, heavier spend on social media and really going on those platforms to attract a younger customer. We really felt like birria was going to appeal to a younger customer base, and it was a great opportunity for us to bring younger consumers into the brand.

And so we really focus especially on TikTok. I'll just give you a insight into how much of an impact that had. We did a soft roll of birria probably about four or five days before we did anything on social media or TV, and it was mixing and it's off for what you'd expect, probably about 1.5%. All we had was point-of-sale materials up, so it wasn't great.

We then went on TikTok. And that day, that mix went up to 8.5% just by TikTok. So it's a phenomenal platform for us, but it just really caught on. In some ways, you can call it going viral.

And just that alone really grew it. And then, of course, we went on TV the following week. We took it up to the 12.5% mix levels that we saw initially with the product. And so a lot more of that to come as we launch the balance of the year our limited-time offers and just more and more focused on the social media platforms, and again, creating separate content for the platforms, which we talked about for is a must-do.

You can't just use your common TV advertising and cut it up and put it on there. You really have to create unique content on these platforms, and the team did a fantastic job, and you're going to see a lot more of that as the year progresses.

Andy Barish -- Jefferies -- Analyst

That's great. And then the -- just on the product itself. I know it's priced in a premium band on your menu. Was it gross margin dilutive or neutral or maybe even slightly favorable, just given how expensive chicken is right now? How should we think about that?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

No. It had higher food costs. So from a calendar perspective, it was an investment on food costs. So again, through the second quarter, you'll have birria on there for really the month of May.

And obviously, April, it comes off, and then we go to tostadas, which is a lower food cost item. So birria is the most expensive item from a food cost percentage that we'll do this year.

Andy Barish -- Jefferies -- Analyst

That's great. Thanks, and have a happy Cinco de Mayo tomorrow.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

All right. Thanks, Andy.

Operator

Our next question comes from Sharon Zackfia with William Blair. Please proceed.

Sharon Zackfia -- William Blair -- Analyst

Larry, in tandem with thinking about the younger consumer, are you toying with the idea of any changes to your hours or doing any later-night daypart?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

I would say, right now, no. Really, right now, given the staffing issues and challenges, I think it would be a challenge to extend it out. I think at some point, as we develop a better menu for late night, that's certainly something on the, I'll call it, longer-term strategy, something to look at. And the team is starting to look at products that are, I'll call it, more snackable and things that we keep putting on the menu that would be more appealing, one, to a young consumer, and also to a late-night consumer.

So I think that's down the road. It's probably not this year but maybe something that we look at next year.

Sharon Zackfia -- William Blair -- Analyst

Thank you.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Thanks.

Operator

Our next question comes from David Tarantino with Baird. Please proceed.

David Tarantino -- Baird -- Analyst

Hi. Good afternoon, Larry. I wanted to come back to this question about marketing. And I guess the way I think I will ask it is, is there anything in your consumer data or your learning thus far that would suggest that the lift you've seen from birria is more about the marketing than the product itself? And the reason I ask that is that would perhaps be a leading indicator for success on future offerings.

So I just wanted to get your thoughts on whether you think it was more about the marketing than the product. Or do you think it was the combination of the two?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Well, I definitely think it was the combination of the two. And I'd just say that birria, I highlighted, had 10 -- had six straight weeks of over 10% mix. And it's coming down the curve, but it continues to be a very strong mix, which just tells us, and we'll dig into it more with data, but it indicates that there's a good amount of repeat. Now the one area where we do know that we've seen repeat is around loyalty.

There's probably been, I think, in the first couple weeks that a 25% repurchase rate, which is actually pretty good in that short timeframe, so we feel good that the product has definitely resonated. But certainly, when you see the kickoff with the TikTok and other social media channels and the growth we saw with that clearly indicates, I think it's the power of the end when you have a great product that really resonates, along with a great marketing strategy. And again, that's why we're excited about tostadas because, again, we know that tostadas is a distinctive product for us, is a great product for us, and working through how we promote that similar to birria. Our target isn't to get back to last year's mix on tostadas.

It's to beat last year's mix on tostadas and continue driving the brand and how it resonates with the younger consumers.

David Tarantino -- Baird -- Analyst

Makes sense. And then I had one clarification on your margin outlook you mentioned. Is that -- the move to high teens, would that be assuming the current momentum in the business continues? Or are you making some assumption that the sales trajectory will change in the second half of the year?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

No. it really assumes continuation of where we are, more or less. I would -- I expect from where we are in March to continue improving margins. I would say it's going to be in between mid to high teens where I would project to be out toward the end of the year, but that does rely on, again, inflation doesn't get any worse and that our sales continue to perform as they have at the current unit volumes that we're seeing.

David Tarantino -- Baird -- Analyst

Got it. Got it. And then on commodity costs, I think you had locked in chicken prices at perhaps more favorable rates than the current market conditions. Is that correct? And have you given any initial thoughts on what 2023 could look like if the market stays the way it is?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Yeah. So we -- the majority of our chicken on the bone is locked in at certainly favorable costs at current market conditions. We do have a portion with one supplier that is not locked in, but the key -- the big inflation drivers, obviously, are the boneless breast meat and boneless thigh, really boneless breast meat. So that's what we're really watching.

And I don't think, at this point, we have an outlook for next year. It just continues to be a tight market chicken as a whole but especially around boneless breast meat. You've got so much demand out there, and suppliers are having a hard time keeping up with that. So it's a little premature for us to be taking stabs at what next year will look like.

We need another quarter or so, and then I think we'll have a better idea of what next year looks like from a chicken supply standpoint.

David Tarantino -- Baird -- Analyst

Yup. Makes sense. Thank you.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

All right. Thanks.

Operator

[Operator instructions] Our next question comes from Todd Brooks with The Benchmark Company. Please proceed.

Todd Brooks -- The Benchmark Company -- Analyst

Hey, Larry. How are you? A question for you. With the strength of birria, which is impressive in and of itself, do you have a sense of what your consumer was seeing otherwise? We've heard other concepts talk about stimulus lap in period 3, period 4 as a headwind. We've heard concepts talk about fuel price increases with the Ukrainian war that we saw in March being a headwind.

Do you have a sense of where your consumer stands? And maybe how much, if any, weakness or lap pressure you were able to overcome with birria, actually implying that birria is that much more powerful than the reported number?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Yeah. I mean, great question. I go back and look at, again, the first quarter. Yeah, we -- again, we had fairly good momentum coming out of March, especially when you go to our franchisee comps first quarter, 11.5%, and they were still improving, so it felt like from a consumer standpoint, and I said this on the March call from a consumer standpoint, our brand looks to be really strong.

We're seeing sales growth across the business -- our franchisees, especially seeing transaction growth with our franchisees. And the reality is their price points are still higher than ours. So the brand is clearly resonating. Now birria took it to a new level.

But when I look at are we seeing any consumer pushback at this point, I'm not seeing it yet. That's not to say it won't happen, but our transaction numbers are roughly pretty comparable to where they've been over the last several quarters. The franchisees are driving positive transactions despite taking pricing. And so thus far, not seeing the pushback that maybe other concepts have seen.

So I think Birria propelled us to a new level. I'm not sure from a brand standpoint whether we were seeing the impact that others have highlighted from reduced stimulus checks and things like that. I just wasn't seeing it in the business leading up to birria.

Todd Brooks -- The Benchmark Company -- Analyst

Perfect. That's great to hear. And then you talked about still working against staffing, especially in the company stores, in some of the tight markets. Do you have a sense, even though the reported numbers were great for the quarter, what either reduced operating hours or I don't know if you have any full-unit closures anymore once we got out of Omicron? But what staffing might have cost you from a same-store sales standpoint on the corporate store side in the quarter?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Well, in terms of -- what we look at is not necessarily the impact of overall staffing, but it's the impact where we've had to either close early or reduce our service channels. And that continues to be 15, 20 restaurants a day, and that can be from staffing from call-out, which, as I recall, I have to think the numbers -- it could be 1% of sales or 1% sales impact, as I recall, when I look at the numbers. So it's not a huge impact on the business overall. It's a very, very slight drag on our comps but not huge.

Todd Brooks -- The Benchmark Company -- Analyst

OK, great. Thanks for the questions, Larry. I appreciate it.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Thank you.

Operator

Our next question comes from Jake Bartlett with Truist Securities. Please proceed.

Jake Bartlett -- Truist Securities -- Analyst

Great. Thanks for taking the follow-up. Larry, my question is going to require looking way back in time, definitely before your time at the brand. And the question is how El Pollo Loco is positioned in a downturn, so how -- what were same-store sales? I looked at my model, doesn't go back that far during the Great Recession.

I don't know if you have that. But just maybe if you could -- if you have that, that would be helpful. And maybe just how the brand is positioned now versus then in terms of value and your ability to pivot toward that, if need be, if this big R word comes to pass.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

OK. You can't hold me 100% accountable for these numbers. But as I recall, the Great Recession, looked at the numbers years ago, yeah, El Pollo Loco was definitely impacted. I think they were down somewhere in the 5% to 10% range during one of the years, so definitely saw an impact.

Now if we go back to that time, El Pollo Loco was very, very reliant on -- it was just strictly -- not strictly, had entrées but really reliant on chicken on the bone, family meals, and individual meals. That was the core. If you recall, you're coming out of that timeframe is when the brand began shifting more focus, or at least emphasizing more the entree side of the business. So I'd say pre-2013, 2012, as you recall, we were at 55% to 60% chicken on the bone and the balance was entrées.

And then coming out of 2013, '14, it flipped around to basically being the other way around. And so that part of the business -- so I'm not sure you can use the last recession as the best bellwether because the business has changed in terms of what we offer in the entrée side of the equation and the value offering on the entrée side of the question. And so that's my recollection of what took place back years ago, but I'm also very optimistic that given our positioning today and even more of the value offerings that we have today versus where we were previously that I think we're well situated. If there's a recession, not that we won't feel something, but I think we'll hold up very well and see hopefully quite a bit of trade down into our brand.

Jake Bartlett -- Truist Securities -- Analyst

Great. That's really helpful. And actually, I did have another one. And I believe last quarter, you gave an indication of what you thought G&A was going to be up year over year in 2022.

I think the first quarter came in a little lighter than we were expecting. So any change on just how we should think about G&A for the second through the fourth quarter?

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Yeah. I think second through fourth quarter G&A should be a little higher year over year than it was. When I looked at the full year, I'm expecting it to be, again, higher than last year. I'm thinking probably somewhere in probably $2 million to $3 million range overall.

Jake Bartlett -- Truist Securities -- Analyst

Great. Thank you so much. It's helpful.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

OK.

Operator

Thank you. At this time, I would like to turn the call back over to Mr. Roberts for closing comments.

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Well, thanks, everybody, for joining the call today. I really appreciate it. And I hope you took away that we really feel great about where the business is, where we're situated. We've got a lot of great things in the pipeline from a product standpoint, a lot of great marketing initiatives, and a real focus on the company operations and a big opportunity there as we improve those.

Very confident that we're going to see additional sales growth come from those company restaurants. So thanks again. And everybody, have a great night.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Larry Roberts -- Chief Executive Officer and Interim Chief Financial Officer

Jake Bartlett -- Truist Securities -- Analyst

Andy Barish -- Jefferies -- Analyst

Sharon Zackfia -- William Blair -- Analyst

David Tarantino -- Baird -- Analyst

Todd Brooks -- The Benchmark Company -- Analyst

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