Shares of El Pollo Loco (LOCO +2.19%) surged on Friday after the fire-grilled chicken chain's profits surpassed investors' expectations.
Image source: Getty Images.
Solid Q4 results
El Pollo Loco's fourth-quarter revenue rose 8% year over year to $123.5 million, though $5.8 million of those sales were due to an additional operating week compared to the fourth quarter of 2024.
Systemwide comparable restaurant sales, which measure revenue at stores open for at least 15 months, grew 2.1%.
NASDAQ: LOCO
Key Data Points
The sales gains helped to drive El Pollo Loco's profit margins higher. Its restaurant contribution margin improved to 17.5% from 16.7% in the prior-year period.
All told, the fast-food chain's adjusted net income jumped 24% to $7.3 million, or $0.25 per share. That was well above Wall Street's estimates, which had called for per-share profits of $0.20.
Accelerating growth
Like other restaurant chains, El Pollo Loco's sales could come under pressure from higher gasoline prices related to the conflict in the Middle East. But the flame-roasted chicken joint's fourth-quarter results show it can operate effectively in a challenging economic environment -- and that consumers are finding value in its offerings.
For its part, management expects El Pollo Loco's comparable sales to grow by up to 3% in 2026. The company also has plans to open three to four company-operated stores and 15 to 16 franchised locations in the coming year.
"As we look ahead, our priority for 2026 is clear: to drive sustainable traffic growth across our system and thoughtfully accelerate new restaurant growth in new markets," CEO Liz Williams said.
