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El Pollo Loco shares plummet 6% after quarterly revenue decline

Published 03/10/2016, 07:41 PM
Updated 03/10/2016, 07:46 PM
© Reuters.  El Pollo Loco failed to meet analysts' expectations with its fourth quarter sales
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Investing.com -- Shares in El Pollo Loco Holdings Inc (NASDAQ:LOCO) plunged more than 6% in after-hours trading after the Mexican-style grilled chicken restaurant chain saw its revenues fall slightly over its previous quarter.

During the company's fourth quarter of fiscal year 2015, which ended in late-January, El Pollo Loco finished with earnings of $5.4 million or 0.14 per share, up from net profits of $4.6 million or 0.12 per share over the same period a year earlier. At the same time, company sales slumped by $3.7 million on the quarter, even as same-restaurant revenues increased by 1.8%. El Pollo Loco blamed an extra week of sales in the previous year's accounting period for contributing an added $4.6 million in revenues.

Analysts expected to see revenues of $88 million on the quarter or per share earnings of 0.13.

"We are confident we are taking the necessary steps to reengage our value customer, while continuing to improve the guest experience in our restaurants, thus enhancing our ‘QSR+' positioning," El Pollo Loco CEO Steve Sather said in a statement. "While the full impact of our 2015 sales driving and operations enhancing initiatives will take time, we believe they are beginning to gain traction."

Within the report, El Pollo Loco said pro forma net income rose 8.7% to $6.0 million, while its Adjusted EBITDA fell slightly by $1.1 million to $15.2 million. The company also opened three new franchised restaurants and 11 new company-owned restaurants during the quarter.

Moving forward, El Pollo Loco expects to report adjusted earnings per share in the range of 0.70 to 0.74 for 2016 as a whole.

"The runway for growth is long, and we remain excited about the long term opportunity to bring our flame-grilled, citrus marinated chicken to customers across the country," Sather added.

Shares in El Pollo Loco fell 0.92 or 6.08% to 14.21 in after-hours.

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