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.
Is now the time to buy LOCO? Find out in our full research report (it’s free for active Edge members).
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: $399 million
StockStory’s Take
El Pollo Loco’s fourth quarter results were met with a notably positive market reaction, underpinned by management’s emphasis on menu innovation and operational improvements. CEO Elizabeth Goodwin Williams credited the quarter’s performance to the success of new menu items such as the double chicken street corn and queso crunch burrito bowls, which exceeded expectations in terms of guest response and sales contribution. Williams also highlighted enhanced labor productivity and disciplined cost management as important contributors to maintaining restaurant-level margins, even amid persistent industry-wide challenges.
Looking forward, El Pollo Loco’s strategy centers on accelerating new restaurant openings, expanding into new markets, and continuing its focus on menu innovation. Management outlined plans for a robust product pipeline, including upcoming launches like Loco Tenders and new beverage offerings, with Williams stating, “We believe our focused approach will accelerate our growth trajectory.” The company also plans to modernize operations through technology investments and targeted marketing, while maintaining a disciplined approach to margin improvement. These efforts are intended to drive sustainable traffic growth as El Pollo Loco extends its presence nationwide.
Key Insights from Management’s Remarks
Management attributed quarterly performance to successful menu launches, cost discipline, and the expansion of new restaurant formats, while also investing in digital engagement and operational excellence.
-
Menu innovation success: The introduction of the double chicken street corn and queso crunch burrito bowls in late September drove higher guest satisfaction and sales, prompting their addition as permanent menu items. Management noted that these launches validated the strategy of offering portable, high-protein, and value-oriented options.
-
Operational improvements: Restaurant-level margin expansion was achieved through targeted cost savings, enhanced labor productivity, and adoption of technology to streamline team member roles. CEO Williams emphasized that improvements in operating efficiency allowed for simultaneous investment in customer value initiatives and margin protection.
-
Expansion into new markets: El Pollo Loco opened restaurants in two new states, Washington and New Mexico, with strong initial sales volumes—particularly in Washington, where demand exceeded expectations to the extent that third-party delivery was postponed to prioritize in-store guests. Franchise partners in these new markets are seeking additional sites, signaling ongoing expansion opportunities.
-
Digital and loyalty engagement: Aggressive app-based promotions and enhancements to the Loco Rewards program resulted in more than 20% year-over-year growth in loyalty revenue and participation. The Twelve Days of Pollo campaign successfully drove both new app users and increased frequency among existing members.
-
Technology upgrades and leadership: The company completed upgrades to a cloud-enabled point-of-sale system across all locations and appointed a new Chief Technology Officer. These investments are intended to improve operational efficiency, reporting, and the customer experience as digital channels become increasingly central to growth.
Drivers of Future Performance
El Pollo Loco expects continued momentum from menu innovation and disciplined expansion, with a focus on balancing growth investments and margin improvement.
-
Sustained menu pipeline: Management plans to launch new products such as Loco Tenders, loaded quesadillas, and a crispy grilled chicken sandwich, alongside new beverages like Horchata Iced Coffee. Williams highlighted that these innovations are designed to keep the brand relevant and attract a broader customer base.
-
Accelerated restaurant growth: The company aims to open 18 to 20 new locations in 2026, largely outside California, leveraging cost-effective second-generation sites to enhance unit economics. Franchisee interest remains high, with a mix of existing and new partners driving growth in both established and new markets.
-
Margin and operational discipline: While investments in technology, training, and new store development will increase near-term general and administrative expenses, management expects these efforts to drive further margin expansion and operational leverage in 2027 and beyond. There is an ongoing focus on supplier-led prep initiatives to reduce in-restaurant complexity and boost efficiency.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the impact of new menu item launches on sales and guest frequency, (2) the pace and performance of new restaurant openings in untapped markets, and (3) ongoing progress in digital engagement and loyalty program participation. Continued improvements in operational efficiency and technology adoption will also serve as important indicators of execution.
El Pollo Loco currently trades at $13.78, up from $10.88 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
Now Could Be The Perfect Time To Invest In These Stocks
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
