News

El Pollo Loco rescinds annual outlook on 1.5% Q1 sales drop

April 9, 2020

The 480-unit mostly Western U.S. chain, El Pollo Loco, reported that its Q1 sales fell 1.5% for the period that ended March 25. Still, before the pandemic fully hit the U.S. in early March, the chain said its system-wide and company-operated comparable restaurant sales grew 3.7% and 4.2%, respectively, according to a news release.

The company said that it was withdrawing its fiscal 2020 guidance and was fully drawing down its $150 million revolving credit facility to add $34.5 million of cash to its balance sheet. Likewise, the company said it had "fine-tuned" its labor model due to lower sales as well as temporarily suspending all but essential capital spending and share repurchase activity while re-evaluating essential support center general and administrative expenses. 

It said the "vast majority" of its stores are offering carryout, mobile pickup and delivery only, while drive-thru is available in some locations. It did not quantify or stipulate whether stores have been closed but said off-premise dining had historically accounted for approximately 78% of sales.

President and CEO Bernard Acoca said the company is deferring 50% of April royalties as well as 100% of its 2020 remodel and new build requirements. He said the company is providing extended sick leave benefits to employees impacted by COVID-19 while granting two weeks paid leave for employees 65 or older. To date, the company said it has no significant supply chain issues, the release said.