EPL Intermediate Inc., parent company of El Pollo Loco Inc., continues to be impacted by negative economic conditions according to results for its third quarter ended Sept. 30.
Systemwide same-store sales were down 10.1 percent for the quarter, with company-operated same-store sales down 9.1 percent. Franchise-operated same-store sales were down 11 percent. For the year, systemwide same-store sales were down 7.6 percent, with comps down 7.2 percent in company-operated stores and down 8 percent in franchise-operated stores.
Revenue for the quarter was down 8.5 percent at $68.5 million compared to $74.9 million in the same period last year. Year to date, revenue was down 4.8 percent at $211.8 million, compared to $222.5 million last year.
The net loss for quarter was $5 million compared to net income of $48,000 in the same period last year. Year to date, the net loss was $33.5 million compared to a net loss of $6 million last year.
The 2009 loss included an income tax expense of $23 million as the company recorded a valuation allowance of $21.3 million against its deferred tax assets in the second quarter of 2009. The company had an income tax benefit of $4.1 million for the 39-week period ended Sept. 30, 2008.
Stephen E. Carley, president and CEO of El Pollo Loco, said in a news release that the company was negatively impacted by economic conditions and the disproportionately high level of unemployment in its core markets, particularly among Hispanics. The impact on the brand's key demographic contributed to lower traffic frequency and average check.
"Without a doubt we experienced our most challenging quarter to date," Carley said. "Our efforts to build traffic and average check with promotions during the third quarter did not deliver the results we were looking for and reinforced the dramatic impact the economy is having on consumers' spending decisions. We continue to be keenly focused on striking the right balance between value and check performance."
Looking forward, Carley said the entire El Pollo Loco system is focused on turning the difficult time into a defining chapter for the brand by aligning its employees, franchisees and business partners around a brand optimization platform.
