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El Pollo Loco 2Q same-store sales rise 2.4%

Company turns attention to underperforming Houston restaurants

El Pollo Loco Holdings Inc. executives said they were staying the course with value, operational and service initiatives after reporting systemwide second-quarter same-store sales growth of 2.4 percent.

While El Pollo Loco reported its 20th consecutive quarter of rising same-store sales, the company said it will focus on turning around underperforming restaurants in the Houston market.

“We are confident that we have the right strategy in place to continue delivering comparable restaurant sales,” El Pollo Loco president and CEO Steve Sather said in a release.

In the second quarter ended June 29, El Pollo Loco’s net income rose to $7.3 million, or 19 cents per share, from $7.2 million, or 18 cents per share, the previous year. Same-store sales increased 2.4 percent systemwide, growing 2 percent at company-owned locations and 2.7 percent at franchised units. Revenue rose 9 percent, to $97.5 million, compared with $89.5 million the previous year.

Traffic grew 2.7 percent at company-operated restaurants.

In an earnings call, Sather said El Pollo Loco’s 10 Houston restaurants continued to underperform.

“While the soft Houston economy is likely a headwind, we are focused on building a deeper relationship with consumers to drive repeat purchases and build frequency,” he said. 

Sather added that efforts would include local store marketing initiatives that focus on core menu items. That includes increasing the area around restaurants that receive direct-mail promotions. 

“We shifted our media spend to a highly targeted social media advertising, and we think that’s the future,” he added.

El Pollo Loco plans to enter the Dallas market in the second half of the year, Sather said, including two locations slated to open in August. 

Costa Mesa, Calif.-based El Pollo Loco operates 188 units and franchises another 251 locations. The company opened two restaurants during the second quarter, and franchisees opened three locations.

Contact Bret Thorn at [email protected]
Follow him on Twitter: @foodwriterdiary

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