What happened

Shares of El Pollo Loco (NASDAQ:LOCO), a chicken restaurant chain known for its Mexican-inspired recipes, soared more than 30% higher Friday morning after the company delivered better-than-expected third-quarter results.

So what

Starting from the top, revenue declined compared to the prior year, down to $112.1 million, but that was enough to top analysts' estimates calling for $109.8 million. Adjusted earnings per share checked in at $0.20, topping analysts' estimates of $0.18 per share. Management now expects full-year adjusted earnings in the range of $0.71 per share to $0.74 per share, better than consensus estimates of $0.70 per share.

The good news didn't stop with beating estimates, as president and CEO Bernard Acoca points out in a press release: "Despite a slow start to the quarter, the expansion of our delivery capabilities, focus on value and improved company operations drove systemwide comparable restaurant sales growth of 1.1%, representing our fifth straight quarter of positive systemwide comp growth."

Grilled chicken on a plate surrounded by seasoning.

Image source: Getty Images.

Now what

Further, September, the last month of the third quarter, was the company's strongest month of the year in terms of comparable-restaurant sales growth at 4.3%. Not only is that impressive growth considering the prior year grew 3%, but it emphasizes that the company has momentum going into the fourth quarter, which is likely a big part of why the stock is trading higher today. Now investors' attention will focus on the company's first-ever holiday-themed promotion, which could drive sales and traffic even higher toward the end of the year.

El Pollo Loco posted a strong third quarter, but management still has work to do if the chain is to continue growing in the ever-competitive restaurant industry.