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After lackluster Q1, new El Pollo Loco CEO vows better times ahead

May 4, 2018

The former Starbucks executive who assumed the leadership reins at El Pollo Loco in early March said things were going to change for the better after revealing disappointing 2018 Q1 sales results.

President and CEO Bernard Acoca said little about the results for the quarter ending March 29, which showed system-wide comparable sales fell 1.1 percent, including 2 percent for company-operated stores and 0.4 percent for franchised locations. But Acoca said he has spent the time since his March 1 hiring learning the ropes and coming up with a number of remedial actions to set the brand back on the right track. 

Some of the Q1 results that Acoca said he expects to improve include: 

• A drop in net income from $4.9 million (12 cents per diluted share) Q1 2017 to $2.5 million this quarter. 
• Adjusted EBITDA fell from $16 million Q1 2017 to $14.6 million this quarter. 
• Total revenue (franchise ad fee revenue excluded) grew 0.9 percent to 100.7 million compared to $99.8 million in the same period of 2017. 

"In order to take El Pollo Loco to the next level, we are focusing our work on three key foundational strategies: Developing a people-first culture, clarifying our brand message, and growing the business responsibly and profitably for the long term. ..." Acoca said in the release.

"While we start working against our foundational strategies, we are also looking to drive business momentum in the back half of the year through three key initiatives. First, we are determining the best way to deliver everyday value to our customers without compromising or degrading our brand as well as better communicate the tremendous value we already offer as a result of the superior quality of our food. Second, we are revisiting our media and advertising strategy to ensure we are communicating to our customers as effectively as possible.  Third, we are ensuring we have the best possible products and marketing calendar in place to help us win."

During the first quarter of 2018, the company closed two restaurants in Texas, of more than 475 company-owned and franchised restaurants in Arizona, California, Nevada, Texas, Utah, and Louisiana.