olivLaw · US equity research
El Pollo Loco Holdings, Inc. LOCO
Retail-Eating Places · SIC 5812 · Vertical: Retail-Eating Places (SIC 5812)
El Pollo Loco is a limited-service chicken restaurant chain known for citrus-marinated fire-grilled chicken, with more than 500 restaurants across nine U.S. states. In August 2026 the company reported system-wide comparable sales growth of 3.9% in the second quarter and raised its 2026 outlook.
At the close of 04 Nov 2026, El Pollo Loco Holdings, Inc. (LOCO) stock was 16.47 USD (+5.92% on the day), with market capitalisation 501.2 m USD, P/E 14.1 on diluted EPS of 1.17 USD over the last 12 months, dividend yield 9.11%, beta 0.56, 52-week range 10.07–17.20 USD. Latest reported quarter (Q2 2026): revenue of 129.6 m USD (+3.0% YoY), net income of 12.8 m USD (+80.2% YoY), diluted EPS 0.43 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 66.9
- strong (55–70)
- Bollinger (20, 2)
- 14.28 – 16.56
- in the upper half of the band · %B 0.96 · band width 14.8%
- SMA 50 / 200
- 14.99 / 14.16
- uptrend (price > SMA50 > SMA200)
- MACD (12, 26, 9)
- 0.19 / 0.10
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +14.4% | −1.1% | +15.5 pp | — |
| 3 months | −3.1% | −0.5% | −2.6 pp | — |
| 6 months | +23.1% | +4.4% | +18.7 pp | — |
| Year to date | +57.5% | +12.3% | +45.1 pp | — |
| 1 year | +56.4% | +13.5% | +42.9 pp | +3.2% |
| 3 years | +87.6% | +76.4% | +11.2 pp | −16.1% |
| 5 years | +6.3% | +63.7% | −57.4 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 01 Jul 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 120.4 m | 114.3 m | 119.2 m | 125.8 m | 121.5 m | 123.5 m | 126.2 m | 129.6 m |
| Operating income | 10.1 m | 9.0 m | 9.0 m | 11.3 m | 11.5 m | 10.3 m | 12.2 m | 18.7 m |
| Depreciation & amortisation | 4.0 m | 4.0 m | 3.9 m | 3.9 m | 4.0 m | 4.2 m | 4.3 m | 4.2 m |
| Interest expense | 1.5 m | 1.3 m | 1.2 m | 1.2 m | 1.1 m | 965.0 k | 731.0 k | 706.0 k |
| Pre-tax income | 8.6 m | 7.8 m | 7.8 m | 10.1 m | 10.3 m | 9.3 m | 11.5 m | 18.0 m |
| Income tax | 2.4 m | 1.8 m | 2.3 m | 3.0 m | 3.0 m | 2.8 m | 3.3 m | 5.2 m |
| Net income | 6.2 m | 6.0 m | 5.5 m | 7.1 m | 7.4 m | 6.5 m | 8.2 m | 12.8 m |
| Diluted EPS | 0.21 | 0.20 ≈ | 0.19 | 0.24 | 0.25 | 0.22 ≈ | 0.27 | 0.43 |
| Operating cash flow | 13.0 m ≈ | 5.6 m | 4.7 m | 14.1 m ≈ | 15.3 m ≈ | 13.9 m | 13.0 m | 31.7 m ≈ |
| Capex | 3.9 m ≈ | 4.5 m | 3.4 m | 5.0 m ≈ | 5.4 m ≈ | 8.8 m | 10.2 m | 8.5 m ≈ |
| Share repurchases | 1.1 m ≈ | 1.3 m | 1.8 m | 68.0 k ≈ | 0 ≈ | -1.0 k | — | — |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 31 percentile of its own 35-quarter history (min 11.3, median 17.2, max 141.3; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 435.8 m | 442.3 m | 426.1 m | 454.4 m | 470.0 m | 468.7 m | 473.0 m | 490.0 m |
| Revenue YoY | +8.5% | +1.5% | −3.7% | +6.6% | +3.4% | −0.3% | +0.9% | +3.6% |
| Net income | -9.0 m | 24.9 m | 24.5 m | 29.1 m | 20.8 m | 25.6 m | 25.7 m | 26.5 m |
| Net income YoY | −204.4% | unavailable | −1.7% | +19.0% | −28.6% | +22.8% | +0.5% | +3.1% |
| Diluted EPS | -0.23 | 0.67 | 0.68 | 0.80 | 0.57 | 0.74 | 0.86 | 0.90 |
| Diluted EPS YoY | −204.5% | unavailable | +1.5% | +17.6% | −28.8% | +29.8% | +16.2% | +4.7% |
| net % | -2.1% | 5.6% | 5.7% | 6.4% | 4.4% | 5.5% | 5.4% | 5.4% |
| Free cash flow | 17.6 m | 20.7 m | 33.9 m | 35.1 m | 18.6 m | 19.4 m | 27.7 m | 25.4 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 6.2 m USD
- Financial debt
- 51.0 m USD
- Net debt
- 44.8 m USD
- Equity
- 291.1 m USD
- Total assets
- 606.6 m USD
- Debt / equity
- 0.18x
- Current ratio
- 0.32x
- ROE
- 9.6%
- ROA
- 4.4%
- FCF margin
- 5.2%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 426.1 m | 454.4 m | 470.0 m | 468.7 m | 473.0 m | 490.0 m | SEC (XBRL)· 13 Mar 2026verified |
| Operating income | 33.6 m | 41.3 m | 30.1 m | 39.8 m | 41.2 m | 42.0 m | SEC (XBRL)· 13 Mar 2026verified |
| Depreciation & amortisation | 16.9 m | 15.2 m | 14.4 m | 15.2 m | 15.7 m | 16.0 m | SEC (XBRL)· 13 Mar 2026verified |
| EBITDA | 50.4 m ≈ | 56.5 m ≈ | 44.5 m ≈ | 55.0 m ≈ | 56.9 m ≈ | 58.0 m ≈ | SEC (XBRL)· 13 Mar 2026derived |
| Interest expense | 3.3 m | 1.8 m | 1.7 m | 4.8 m | 5.9 m | 4.5 m | SEC (XBRL)· 13 Mar 2026verified |
| Pre-tax income | 30.1 m | 39.5 m | 28.9 m | 34.9 m | 35.3 m | 37.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Income tax | 5.7 m | 10.3 m | 8.1 m | 9.3 m | 9.6 m | 11.1 m | SEC (XBRL)· 13 Mar 2026verified |
| Net income | 24.5 m | 29.1 m | 20.8 m | 25.6 m | 25.7 m | 26.5 m | SEC (XBRL)· 13 Mar 2026verified |
| Diluted EPS | 0.68 | 0.80 | 0.57 | 0.74 | 0.86 | 0.90 | SEC (XBRL)· 13 Mar 2026verified |
| Weighted average diluted shares | 35.8 m | 36.4 m | 36.6 m | 34.4 m | 30.0 m | 29.4 m | SEC (XBRL)· 13 Mar 2026verified |
| Dividend per share | — | — | 1.50 | — | — | — | SEC (XBRL)· 10 Mar 2023verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 13.2 m | 30.0 m | 20.5 m | 7.3 m | 2.5 m | 6.2 m | SEC (XBRL)· 13 Mar 2026verified |
| Inventories | 2.1 m | 2.3 m | 2.4 m | 1.9 m | 1.9 m | 1.8 m | SEC (XBRL)· 13 Mar 2026verified |
| Current assets | 31.7 m | 49.5 m | 37.4 m | 25.1 m | 19.9 m | 25.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Property, plant & equipment, net | 79.6 m | 75.7 m | 78.6 m | 84.0 m | 86.1 m | 97.0 m | SEC (XBRL)· 13 Mar 2026verified |
| Goodwill | 248.7 m | 248.7 m | 248.7 m | 248.7 m | 248.7 m | 248.7 m | SEC (XBRL)· 13 Mar 2026verified |
| Total assets | 605.2 m | 613.8 m | 597.2 m | 592.3 m | 592.0 m | 606.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Accounts payable | 7.5 m | 10.6 m | 12.7 m | 12.5 m | 12.1 m | 15.7 m | SEC (XBRL)· 13 Mar 2026verified |
| Long-term debt | 62.8 m | 40.0 m | 66.0 m | 84.0 m | 71.0 m | 51.0 m | SEC (XBRL)· 13 Mar 2026verified |
| Current liabilities | 66.4 m | 74.6 m | 68.5 m | 72.6 m | 75.7 m | 79.1 m | SEC (XBRL)· 13 Mar 2026verified |
| Total liabilities | 327.6 m | 303.2 m | 316.1 m | 341.6 m | 331.3 m | 315.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Equity | 277.6 m † | 310.6 m † | 281.1 m † | 250.7 m † | 260.7 m † | 291.1 m † | SEC (XBRL)· 13 Mar 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 40.5 m | 52.1 m | 38.5 m | 40.7 m | 46.8 m | 48.1 m | SEC (XBRL)· 13 Mar 2026verified |
| Capex | 6.7 m | 17.0 m | 19.9 m | 21.3 m | 19.1 m | 22.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Free cash flow | 33.9 m ≈ | 35.1 m ≈ | 18.6 m ≈ | 19.4 m ≈ | 27.7 m ≈ | 25.4 m ≈ | SEC (XBRL)· 13 Mar 2026derived |
| Investing cash flow | -6.7 m | -12.5 m | -18.9 m | -13.4 m | -18.9 m | -22.6 m | SEC (XBRL)· 13 Mar 2026verified |
| Financing cash flow | -28.7 m | -22.8 m | -29.2 m | -40.4 m | -32.6 m | -21.7 m | SEC (XBRL)· 13 Mar 2026verified |
| Dividends paid | — | — | 55.6 m | — | — | — | SEC (XBRL)· 10 Mar 2023verified |
| Share repurchases | 0 | 0 | — | 59.2 m | 20.6 m | 1.8 m | SEC (XBRL)· 13 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 68 / 100
A scoring methodology on indicators and valuation, not investment advice.
score >= 65 · margin_of_safety >= 0.15 · agreement in ['high', 'medium']
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 501.2 m USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet69
- Growth56
- Quality74
- Returns5
- Valuation82
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 15.55 – 38.05 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)17.57 – 27.44 (Mid 21.38)WACC 9.0% · starting FCFF 43.5 m USD · terminal value share of EV 73%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): -9.1%
- Peers: EV/EBITDA15.55 – 36.78 (Mid 23.25)22 companies used · median multiple 10.5x · quartiles 7.1x – 16.4xARCO, BDL, BJRI, BLMN, CAKE, CBRL, DRI, FWRG, GTIM, MCD, NATH, NDLS, PLAY, PTLO, PZZA, QSR, RRGB, STKS, TXRH, WING, YUM, YUMC
- Peers: P/E21.26 – 38.05 (Mid 25.57)22 companies used · median multiple 21.8x · quartiles 18.1x – 32.5xARCO, BDL, BJRI, BLMN, CAKE, CBRL, CMG, DRI, EAT, FWRG, GTIM, JACK, MB, MCD, NATH, PTLO, PZZA, QSR, TXRH, WING, YUM, YUMC
- Dividend discount (DDM)19.71 – 26.51 (Mid 22.61)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Attractive profile · Score 68/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 11.2% | 56 (vs peers) | 11% |
| Net margin · Quality | 7.0% | 77 (vs peers) | 7% |
| FCF conversion · Quality | 117.6% | 100 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | 1.4% | 12 (on a fixed band) | 9% |
| EPS CAGR 3Y · Growth | 16.4% | 100 (on a fixed band) | 9% |
| Net debt / EBITDA · Balance sheet | 0.2x | 78 (vs peers) | 11% |
| Interest coverage · Balance sheet | 14.9x | 100 (on a fixed band) | 7% |
| Current ratio · Balance sheet | 0.4x | 0 (on a fixed band) | 4% |
| P/E (TTM) · Valuation | 14.1x | 81 (vs peers) | 11% |
| EV/EBITDA · Valuation | 7.5x | 70 (vs peers) | 11% |
| FCF yield · Valuation | 8.2% | 100 (on a fixed band) | 9% |
| Shareholder yield (distributions) · Returns | 0.4% | 5 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet69/100 · 3/3 factors with a value
- Growth56/100 · 2/2 factors with a value
- Quality74/100 · 3/3 factors with a value
- Returns· partial5/100 · 1/2 factors with a value
- Valuation82/100 · 3/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
EL POLLO LOCO HOLDINGS, INC. (LOCO). Latest full fiscal year: 2025; data up to 2026-07-01.
Figures computed from the financial statements: revenue 490.0 m USD in 2025; YoY growth 3.6%; net margin 7.0%; ROE 11.8%; net debt/EBITDA 0.2x.
The estimated value range is 18.64–32.11 USD per share (median of 4 methods, agreement: high); assumptions are illustrative. Against the central value of 22.93 USD, the price of 16.47 USD leaves a potential of 39.2% (value / price − 1) and a margin of safety of 28.2% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 68/100, methodological classification: attractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Net margin: 7.0%
- FCF conversion: 117.6%
- EPS CAGR 3Y: 16.4%
- Net debt / EBITDA: 0.2x
- Interest coverage: 14.9x
- P/E (TTM): 14.1x
- FCF yield: 8.2%
- The price is below the estimated value range
What contradicts it
- Revenue CAGR 3Y: 1.4%
- Current ratio: 0.4x
- Shareholder yield (distributions): 0.4%
Not assessed (insufficient data or a ratio without meaning): Payout ratio (FCF).
Versus the vertical median
Retail-Eating Places (SIC 5812) · same industry (4-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| MCDMcDONALD’S CORPORATION | 198.3 bn | 0.0 | — | 31.7% | +3.7% | −10% / −1% |
| YUMYum! Brands, Inc. | 45.4 bn | 20.9 | — | 25.4% | +8.8% | +9% / +32% |
| CMGChipotle Mexican Grill, Inc. | 44.5 bn | 32.9 | 48.5% | 10.8% | +5.4% | +2% / −20% |
| DRIDarden Restaurants, Inc. | 26.1 bn | 22.5 | 55.1% | 8.8% | +9.4% | +28% / +47% |
| QSRRestaurant Brands International Inc. | 24.8 bn | 18.2 | 53.8% | 20.1% | +12.2% | +8% / +10% |
| YUMCYum China Holdings, Inc. | 17.0 bn | 18.3 | 17.5% | 7.8% | +4.4% | +3% / +15% |
| TXRHTexas Roadhouse, Inc. | 12.9 bn | 31.3 | 28.1% | 6.8% | +9.4% | +12% / +75% |
| EATBrinker International, Inc. | 9.2 bn | 19.4 | 134.7% | 8.4% | +7.9% | +43% / +512% |
| CAVACAVA Group, Inc. | 7.2 bn | 109.3 | 8.3% | 4.8% | +22.4% | +27% / +82% |
| HDLSuper Hi International Holding Ltd. | 6.4 bn | 247.5 | 6.9% | 2.8% | +13.4% | −46% / unavailable |
| CAKEThe Cheesecake Factory Incorporated | 5.8 bn | 27.4 | 41.6% | 5.2% | +4.7% | +142% / +268% |
| WINGWingstop Inc. | 4.5 bn | 39.3 | — | 16.0% | +11.4% | −37% / −30% |
| CBRLCracker Barrel Old Country Store, Inc. | 1.6 bn | 50.2 | 6.7% | 1.0% | −4.7% | +143% / +5% |
| ARCOArcos Dorados Holdings Inc. | 1.5 bn | 7.0 | 33.2% | 4.5% | +4.7% | −7% / −39% |
| BJRIBj’s Restaurants, Inc. | 1.3 bn | 33.0 | 10.4% | 2.9% | +3.1% | +61% / +106% |
| SGSweetgreen, Inc. | 1.1 bn | 117.9 | 3.1% | 2.0% | +0.4% | +82% / +25% |
| BLMNBloomin’ Brands, Inc. | 939.3 m | 35.1 | 6.7% | 0.7% | +0.1% | +55% / −53% |
| FWRGFirst Watch Restaurant Group, Inc. | 833.3 m | 42.1 | 3.1% | 1.5% | +20.3% | −27% / −25% |
| PZZAPapa John’s International, Inc. | 658.1 m | 25.1 | — | 1.4% | −0.3% | −52% / −69% |
| LOCOEl Pollo Loco Holdings, Inc. | 501.2 m | 14.1 | 11.8% | 7.0% | +3.6% | +56% / +88% |
| DINDine Brands Global, Inc. | 448.6 m | 106.7 | — | 0.4% | +8.2% | +17% / −16% |
| NATHNathan's Famous, Inc. | 418.2 m | 21.1 | — | 11.8% | +9.4% | −4% / +56% |
| PTLOPortillo's Inc. | 336.8 m | 29.8 | 3.0% | 1.9% | +3.0% | +4% / −65% |
| PLAYDave & Buster’s Entertainment, Inc. | 305.8 m | — | -69.7% | -4.3% | −1.4% | −50% / −79% |
| JACKJack In The Box Inc. | 275.6 m | 8.2 | — | 2.4% | −6.7% | −27% / −80% |
1- and 3-year price returns: for LOCO from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 9.22 Total return -44% · Per year -44% | 16.33 Total return -1% · Per year -1% | 24.64 Total return 50% · Per year 50% |
| 3 years | 8.40 Total return -49% · Per year -20% | 16.80 Total return 2% · Per year 1% | 27.89 Total return 69% · Per year 19% |
| 5 years | 7.66 Total return -54% · Per year -14% | 17.27 Total return 5% · Per year 1% | 31.58 Total return 92% · Per year 14% |
- Exit P/E± 4.20
- Net margin± 2.94
- Annual revenue growth± 2.49
- Annual dilution± 0.25
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
El Pollo Loco is a limited-service chicken restaurant chain known for citrus-marinated fire-grilled chicken, with more than 500 restaurants across nine U.S. states. In August 2026 the company reported system-wide comparable sales growth of 3.9% in the second quarter and raised its 2026 outlook 3.
SWOT
Strengths
- A differentiated concept built on citrus-marinated fire-grilled chicken, with broad appeal across demographic groups 1.
- Restaurant-level contribution margins that were stable and improving in the second quarter of 2026 3.
- A mixed franchise model that allows expansion with less own capital, plus a sizeable loyalty programme 1.
Weaknesses
- High revenue concentration in the greater Los Angeles area, exposing the company to local and regional developments 1.
- Comparable sales were nearly flat in 2025, and transactions fell in company-operated restaurants 1.
- Reliance on franchisees for new openings could slow growth if recruitment of franchisees lags 1.
Opportunities
Risks
- Geographic concentrationhigh
Much of the revenue comes from the greater Los Angeles area, so local events, regulation or natural disasters could have an outsized impact 1.
- Labour costshigh
California wage legislation and difficulty attracting staff could reduce margins if they cannot be offset through prices 12.
- Tariffs and supply chainmedium
Products imported from Mexico, Canada and Asia could become more expensive depending on trade policy, affecting cost of goods sold 1.
- Dependence on restaurant openingsmedium
The growth plan depends on opening new restaurants, and permitting delays or a shortage of franchisees could slow expansion 1.
- Competition and shifting preferencesmedium
Rivals with larger resources may innovate faster, and declining interest in Mexican-inspired or chicken-based food could affect the brand 1.
Investment thesis
What would need to be true (bull case)
- Accelerating system-wide comparable sales and improving restaurant margins in the second quarter of 2026 could suggest the strategy is gaining traction 3.
- Raising the 2026 outlook and reducing debt may point to a stronger financial position than in the past 3.
- A loyalty programme with millions of members and a growing share of digital orders could support visit frequency 1.
What would break the thesis
What to watch
- Trajectory of system-wide comparable sales against the full-year outlookQ3 2026
- Restaurant contribution margin and the effect of California labour costsQ3 2026
- Number of company-operated and franchised openings against guidance2026
- Effect of tariffs and trade policy on food costs as disclosed in the next annual reportnext 10-K
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
Founded in 1980 in Los Angeles, El Pollo Loco runs a restaurant system that combines a Mexican-inspired menu centred on marinated chicken and fire-grilling with quick-service speed. At the end of 2025 the system counted 503 restaurants, of which 175 were company-operated and 328 franchised 1. Restaurants are mostly free-standing with drive-thru service and are located principally in California, with others in Arizona, Nevada, Texas, Utah, Colorado, Washington and Louisiana 1.
The business model is mixed: the company develops its own restaurants and franchises others, with franchisees bringing most new openings. Revenue comes from company-operated restaurant sales, franchise royalties and fees, and advertising fund contributions 1. The company operates in one segment, and all significant revenue comes from food and beverage sales 1.
The 2026 outlook calls for three to four new company-operated restaurants and 15 to 16 franchised openings, plus remodels. The company aims to grow visit frequency through its Loco Rewards loyalty programme and digital sales, and management has pointed to a cost-improved prototype that could support returns on invested capital 13.
Segments
Market context
The company competes in the limited-service segment, positioned between fast-casual and quick-service, with prices slightly above QSR and below fast-casual 1. The greater Los Angeles area, which generates most revenue, is described by the company as the most competitive Mexican-inspired QSR and fast-casual market in the United States 1.
The company says consumer preference for limited-service restaurants offering healthier, better-quality menu items favours concepts like its own, although rivals are responding to the same trend 1. Revenue depends on consumer discretionary spending, so an economic slowdown could reduce transactions 1.
Trends
- California labour costsheadwind
California legislation raising fast-food wages increased labour and compliance costs in 2024 and 2025. The company largely offset these through higher menu prices, menu-mix management and productivity, but expects these pressures to continue in 2026 12.
- Tariffs and import costsheadwind
Some produce, packaging and other items are sourced from Mexico, Canada and Asia. Changes in tariffs could raise food costs, and the company anticipates an adverse effect on revenue and cost of goods sold, with possible menu price increases 1.
- Comparable sales momentummixed
After nearly flat comparable sales in 2025, the second quarter of 2026 showed an acceleration, with transactions down but average check up, and the company raised its full-year outlook 13.
- Digital and loyaltytailwind
Digital and delivery orders made up 13.8% of the sales mix in 2025, and the Loco Rewards programme had over 5.3 million members at year-end 1. Investment in apps, kiosks and delivery partnerships could support visit frequency.
Competitive position
The company competes with national, regional and local limited-service, fast-casual and full-service restaurants, as well as supermarket delis, convenience stores and meal-kit services 1. Many rivals have greater national name recognition and larger resources for innovation and technology 1.
The main competitive factors are price, convenience, service quality, brand recognition, location and food quality 1. To differentiate, El Pollo Loco emphasises fresh fire-grilled chicken, promoted as a healthier alternative to traditional fast food 1.
- National limited-service restaurant chains
National rivals with greater brand recognition, cited in the company's risk factors 1.
- Fast-casual restaurants
Competitors offering fresh menus at higher price points than QSR chains 1.
- Supermarket delis and in-store cafés
Grocery chains with prepared-food sections and cafés targeting consumers seeking higher-quality food 1.
- Meal-kit and eat-at-home options
Delivery and kit options competing for the same dining occasions 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- El Pollo Loco to open first New York restaurant as it aims to become national chicken chainCNBC — Top News · 29 Sept 2026 · EN
SEC filings
- Current report25 Sept 2026Departure or appointment of officers
- Quarterly report07 Aug 2026
- Current report06 Aug 2026Results of operations · Financial statements and exhibits
- Current report29 May 2026Departure or appointment of officers · Shareholder vote · Financial statements and exhibits
- Current report28 May 2026Other events
- Quarterly report08 May 2026
- Current report07 May 2026Results of operations · Financial statements and exhibits
- Proxy statement30 Apr 2026
- Annual report13 Mar 2026
- Current report12 Mar 2026Results of operations · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / El Pollo Loco Holdings, Inc. · 13 Mar 2026
- [2] Form 10-Q, quarter ended 2026-07-01 · SEC / El Pollo Loco Holdings, Inc. · 07 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / El Pollo Loco Holdings, Inc. · 06 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.