El Pollo Loco Holdings, Inc. Q1 FY2026 earnings call

• Brand that wins: Culinary innovation with successful launches like Baja Devil Tostadas, Loco Tenders. New products drive traffic. Marketing efforts via Let's Get Loco campaign amplify brand. Social media and activations create brand engagement. - Hospitality mindset: Improved guest experience, service consistency. Using data to drive satisfaction. Deploying tools and standards to improve speed of service and order accuracy. Loyalty platform with increased member frequency and spend through initiatives like Loco Friday drops, boosts, and member exclusive experiences. - Winning unit economics: Now within 18 to 20% restaurant-level margin target. Focus on maintaining margin range while investing in other initiatives. - Driving unit growth: On track to open 18 to 20 new restaurants system-wide this year, mostly outside California. Strong returns from remodel program.

In the first quarter of 2026, total revenue was $126.2 million, compared to $119.2 million in the first quarter of 2025. Company-operated restaurant revenue increased 7.6% to $105.9 million from $98.4 million in the same period last year. Franchise revenue decreased 8.8% to $12 million due to factors like the absence of prior year franchise IT pass-through revenue, but was partially offset by a 6.1% increase in comparable restaurant sales and revenue from nine franchise-operated restaurant openings. System-wide same-store sales were up 5.8% with system-wide traffic turning positive to up 0.6%. Restaurant-level margin was 19.2% in the first quarter, within the 18 to 20% long-term target. For 2026, system-wide comparable store growth guidance is between 2% and 4%, adjusted EBITDA guidance is between $67.5 million to $69.5 million, capital spending is between $37 million and $40 million, G&A expenses are between $52 to $54 million, etc.

• Increased system-wide comparable store growth guidance to between 2% and 4% for 2026. - Increased adjusted EBITDA guidance to between $67.5 million to $69.5 million. - Maintained guidance for opening of at least three to four company-operated restaurants and 15 to 16 franchise-operated restaurants. - Capital spending between $37 million and $40 million. - G&A expenses between $52 to $54 million, excluding one-time charges and including approximately $6.5 million in stock compensation expense. - Estimated effective income tax rate of approximately 29 - 29.5% before discrete items. - Depreciation and amortization expected to be between $18.5 million and $19 million for the full year.

• Risks that could impact future operating results and financial condition, as referred to in recent SEC filings including Form 10-K for the year ended December 31st, 2025, and Form 10-Q for the first quarter of 2026. - Risks related to consumer spending pressures from elevated energy and gas prices, and other uncertainties that could cause actual results to differ materially from current expectations.

Q: Thanks and congratulations on the really strong results. Wanted to dig in on menu innovation, specifically Loco Tenders launch.

A: Loco Tenders launched in April, meeting expectations. Differentiated by unique spin, competitively priced. Seeing trial and some add-on.

Q: Asked about menu pricing progression for remainder of year.

A: Step down in pricing, to about 3 - 3.5% in Q2, a little above 3% in Q3 and Q4, with midyear small menu price increase of about 1.5%.

Q: Asked about performance of new stores versus unit algo.

A: New stores have a range of results, some with high sales volumes, others average but expected to grow to system average.

Q: Drilled down on Loco Tenders launch expectations.

A: Product right in line with traditional new product performance, building, not releasing exact numbers yet.

Q: Asked about consumer downshift due to gas prices.

A: Consumer remained steady, pleased with performance, 4.8% system-wide comparable store sales in April speaks to momentum.

Q: Asked about aggressiveness in exploring territories for franchising.

A: Very aggressive, combination of company and franchise development, with franchise partners wanting to develop alongside and new recruiter driving conversations in new markets.

Q: Asked about driving improvement in speed of service and order accuracy.

A: Primary focus on standards, accuracy first, seeing some speed improvements in different pockets, operational enhancements to underpin further speed improvement.

Q: Asked about broad-based traffic improvements demographically.

A: Improvement broad across all, younger set with higher growth, frequency increase with existing consumers and new consumers from new innovation