El Pollo Loco Reverses Traffic Decline in Third Quarter

The Tip Desk · November 11, 2026 · 3 min read

System-wide comparable sales rose 5.0% in the 13 weeks ended Sept. 30, 2026, after 3.9% in the second quarter, as company-operated transactions turned positive.

El Pollo Loco Holdings (LOCO), the fire-grilled chicken restaurant operator, reported system-wide comparable restaurant sales growth of 5.0% for the 13 weeks ended September 30, 2026, a pickup from 3.9% in the second quarter. The company said the increase marked the fourth consecutive quarter of positive comparable sales and included a return of traffic after a second-quarter transactions decline.

Total revenue was $126.3 million, compared with $121.5 million a year earlier. Company-operated restaurant revenue rose to $105.4 million from $100.7 million, including $4.3 million, or 4.4%, of comparable sales growth, $1.0 million from three restaurants opened after the third quarter of 2025, and a $0.3 million decrease from transferring one company-operated restaurant to a franchisee in the second quarter of 2026.

The company-operated comparable increase consisted of a 4.0% rise in average check and a 0.3% rise in transactions. In the second quarter, company-operated comparable sales had risen 3.0%, with a 4.2% check-size gain offset by a 1.1% transactions decline.

Franchise revenue decreased 3.0% to $12.5 million from $12.9 million. The company attributed the decline primarily to a $0.6 million drop in franchisee information-technology pass-through tied to the 2025 point-of-sale rollout and a prior-year royalty true-up, partially offset by 14 franchise openings and a 5.3% franchise comparable increase. Franchise comparable sales rose 4.4% in average check and 0.9% in transactions.

Income from operations fell to $10.2 million from $11.5 million a year earlier. Restaurant contribution was $19.4 million, or 18.4% of company-operated restaurant revenue, versus $18.5 million, or 18.3%. The company said the margin increase reflected leverage on the 4.4% comparable sales increase and higher menu prices, partially offset by higher utilities, repairs and maintenance, and third-party delivery fees.

General and administrative expenses increased $1.6 million, or 13.1%, from the year-ago quarter. The company said the increase included $0.8 million of incentive compensation and other labor, $0.3 million of stock compensation, $0.2 million of restructuring and executive transition costs, and $0.5 million of other G&A, partially offset by $0.2 million lower shareholder-activism expenses.

Net income was $6.9 million, or $0.23 a share, versus $7.4 million, or $0.25 a share. Adjusted net income was $7.3 million, or $0.24 a share, versus $7.8 million, or $0.27 a share. Adjusted EBITDA was $17.1 million, compared with $17.4 million.

Chief Executive Officer Liz Williams said the company delivered positive traffic growth and that marketing, innovation, quality, value and service contributed to the quarter.

For fiscal 2026, the company updated system-wide comparable restaurant sales growth to approximately 4.5%, set G&A at $52.5 million to $53.5 million excluding one-time costs, and set capital spending at $33 million to $35 million. It reiterated three to four company-operated and 15 to 16 franchise openings and Adjusted EBITDA of $68 million to $70 million.

As of September 30, 2026, outstanding debt was $23.0 million with $3.4 million in cash after a $28.0 million net paydown on the revolving credit facility over the preceding 39 weeks. Subsequent to quarter-end the company borrowed an additional $4.0 million, leaving $27.0 million outstanding as of November 4, 2026.

The company said it expects to open 25 to 30 new restaurants in 2027.