El Pollo Loco Holdings, Inc. LOCO reported fourth-quarter fiscal 2023 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top declined from the prior-year quarter’s levels, while the bottom line remained flat year over year.
Earnings & Revenue Discussion
During the fiscal fourth quarter, the company’s adjusted earnings per share (EPS) were in line with the Zacks Consensus Estimate of 16 cents. The figure matched the prior-year quarter’s levels.
Quarterly revenues of $112.2 million beat the consensus mark of $109 million. The top line declined 3.2% on a year-over-year basis.
El Pollo Loco Holdings, Inc. Price, Consensus and EPS Surprise
El Pollo Loco Holdings, Inc. Price, Consensus and EPS Surprise
El Pollo Loco Holdings, Inc. price-consensus-eps-surprise-chart | El Pollo Loco Holdings, Inc. Quote
During the quarter, revenues from company-operated restaurants came in at $94 million compared with $99.6 million reported in the prior-year quarter. The downside was primarily caused by a reduction of $5.8 million in revenues (stemming from the sale of 18 company-operated restaurants to existing franchisees) and a decline in comparable restaurant revenues of $0.2 million. This was partially offset by a $0.5 million increase resulting from additional sales generated by restaurants opened in previous quarters.
In the fiscal fourth quarter, franchise revenues increased 17% year over year to $11 million. The upside was backed by revenues generated by the 18 company-operated restaurants sold by the Company to existing franchisees and from the opening of five restaurants (during or after the fourth quarter of 2022). The increase was fueled by a 1.6% uptick in comparable restaurant sales within the franchise segment.
Operating Highlights
During the fiscal fourth quarter, general and administrative expenses came in at $10.6 million compared with $9.6 million reported in the prior-year quarter. The upside was caused by a $0.6 million escalation in executive transition costs and a $0.4 million uptick in other general and administrative expenses.
During the quarter, the restaurant contribution margin came in at 15.8% compared with 14.7% reported in the prior-year quarter.
Adjusted net income during the quarter came in at $5.2 million compared with $6 million reported in the prior-year quarter.
Adjusted EBITDA in the fiscal fourth quarter came in at $13.6 million compared with $13.3 million reported in the prior-year quarter.
Balance Sheet
As of Dec 27, 2023, cash and cash equivalents totaled $7.3 million compared with $20.5 million as of Dec 28, 2022. At the end of the fiscal fourth quarter, total debt amounted to $84 million compared with $66 million at the end of fourth-quarter fiscal 2022.
Fiscal 2023 Highlights
Total revenues in the fiscal 2023 amounted to $468.7 million compared with $470 million in the fiscal 2022.
Adjusted net income in the fiscal 2023 came in at $24.5 million compared with $21.1 million in the fiscal 2022.
In the fiscal 2023, diluted EPS came in at 71 cents compared with 58 cents reported in the previous year.
Fiscal 2024 Outlook
In fiscal 2024, the company anticipates opening two new company-owned restaurants and adding five to seven new franchised restaurants to its portfolio.
Capital expenditures during the period are projected to be between $25 million and $28 million. The company anticipates general and administrative expenses in the range of $45-$47 million. Adjusted income tax rate is estimated in the range of 27-28%.
Zacks Rank
El Pollo Loco currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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