Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of El Pollo Loco Holdings (NASDAQ:LOCO) were up 11% as of 11:45 a.m. Friday after the restaurant chain announced delicious fourth-quarter results.
So what: Quarterly revenue climbed 18% year over year (or 11.9% on a comparable 13-week basis) to $90 million, which translated to adjusted net income of $5.5 million, or $0.14 per diluted share. Analysts, on average, were expecting adjusted earnings of $0.12 per share on sales of $87.5 million.
"Our systemwide comparable restaurant sales growth of 7.6% marked our 14th consecutive quarter of positive comparable restaurant sales growth," added El Pollo Loco CEO Steve Sather, "as our unique 'QSR-plus' positioning, compelling value proposition, and broad menu offerings anchored by our signature fire-grilled chicken, continue to resonate with customers."
Now what: For the full year 2015, El Pollo Loco expects to open 16 new company-owned restaurants, and 11 new franchised locations. For reference, as of Dec. 31, 2014, El Pollo Loco had 415 total locations, including 172 company-owned and 243 franchised restaurants.
Meanwhile, 2015 comparable-restaurant sales should grow 3% to 5%. When all is said and done, El Pollo Loco says, this should result in adjusted net income per diluted share of $0.67 to $0.71, the midpoint of which would represent a 25.4% increase over 2014. Wall Street was modeling fiscal 2015 earnings of $0.68 per share.
All things considered, I can't blame the market for its enthusiasm given today's solid beat. But El Pollo Loco certainly doesn't look cheap trading around 48 times trailing-12-month earnings, and 38 times this year's expected figure. Given the recent run, and as an investor currently on the sidelines, that's why I don't mind patiently waiting for a better entry point going forward.
Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.