El Pollo Loco notches 16.7% profit gain in 2nd Q

IRVINE Calif. Despite higher operating expenses, El Pollo Loco parent EPL Intermediate Inc., based here, reported a 16.7-percent year-to-year jump in second-quarter profit on revenue that rose 5.8 percent to $69.7 million.

For the quarter ended June 30, net income totaled $1.4 million at the privately held 370-unit chain, compared with net income of $1.2 million for the same period last year.

El Pollo Loco’s bottom line improvement came despite a year-to-year increase of 7.7 percent in total operating expenses, including jumps in occupancy costs, advertising spending and pre-opening costs, the company reported.

Systemwide same-store sales at restaurants open more than 15 months increased 2.9 percent. The company said price increases at the beginning of the year and an increase in the average check offset the “softness” of transaction counts in the second quarter.

Steve Carley, president and chief executive of the quick-service flame-grilled chicken chain, said sales improved “in spite of intense competitive activity and what appears to be a general sales softness in the restaurant industry.”

After the quarter ended, El Pollo Loco introduced both a crunchy and a soft chicken taco for $1.69 to help spur sales.

The company said it planned to open about 10 more stores in fiscal 2007, with another 20 franchised units scheduled to open in the same period.