Fast food chain El Pollo Loco (NASDAQ: LOCO) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 8.1% year on year to $123.5 million. Its non-GAAP profit of $0.25 per share was 25% above analysts’ consensus estimates.
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El Pollo Loco (LOCO) Q4 CY2025 Highlights:
- Revenue: $123.5 million vs analyst estimates of $124 million (8.1% year-on-year growth, in line)
- Adjusted EPS: $0.25 vs analyst estimates of $0.20 (25% beat)
- Adjusted EBITDA: $16.9 million vs analyst estimates of $14.65 million (13.7% margin, 15.3% beat)
- Operating Margin: 8.3%, in line with the same quarter last year
- Locations: 503 at quarter end, up from 498 in the same quarter last year
- Same-Store Sales rose 2.1% year on year (0.5% in the same quarter last year)
- Market Capitalization: $333.4 million
“During the quarter, we not only delivered positive same store sales growth but also achieved growth in restaurant-level margins. 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,” said Liz Williams, Chief Executive Officer of El Pollo Loco Holdings, Inc.
Company Overview
With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ: LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $490 million in revenue over the past 12 months, El Pollo Loco is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.
As you can see below, El Pollo Loco’s sales grew at a weak 1.7% compounded annual growth rate over the last six years as its restaurant footprint remained unchanged and it barely increased sales at existing, established dining locations.
This quarter, El Pollo Loco grew its revenue by 8.1% year on year, and its $123.5 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 1.1% over the next 12 months, similar to its six-year rate. This projection is underwhelming and indicates its newer menu offerings will not accelerate its top-line performance yet.
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Restaurant Performance
Number of Restaurants
The number of dining locations a restaurant chain operates is a critical driver of how quickly company-level sales can grow.
El Pollo Loco operated 503 locations in the latest quarter, and over the last two years, has kept its restaurant count flat while other restaurant businesses have opted for growth.
When a chain doesn’t open many new restaurants, it usually means there’s stable demand for its meals and it’s focused on improving operational efficiency to increase profitability.
Same-Store Sales
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
El Pollo Loco’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.7% per year. Given its flat restaurant base over the same period, this performance stems from a mixture of higher prices and increased foot traffic at existing locations.
In the latest quarter, El Pollo Loco’s same-store sales rose 2.1% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from El Pollo Loco’s Q4 Results
We were impressed by how significantly El Pollo Loco blew past analysts’ EBITDA expectations this quarter. We were also glad its same-store sales outperformed Wall Street’s estimates. On the other hand, its revenue was in line. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 3.3% to $11.23 immediately after reporting.
Sure, El Pollo Loco had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
