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Category: El Pollo Loco (LOCO)
Date: 14 March 2021 Stock price of LOCO: $19.21 Market Capital of El Pollo Loco: $700 million We take a look at the 4th quarter 2020 earnings report of El Pollo Loco (LOC) the nation’s leading fire-grilled chicken restaurant chain renowned for its masterfully citrus-marinated, fire-grilled chicken and handcrafted entrees using fresh ingredients inspired by Mexican recipes with 475 restaurants across 6 states
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Bernard Acoca, President and Chief Executive Officer of El Pollo Loco Holdings, Inc. - We posted solid fourth quarter results despite continuing COVID-19-related challenges, especially in our core Los Angeles market. We are particularly pleased with the performance of our non-LA markets that posted comparable sales growth of 3.3%, giving us further confidence that the foundation of our business is strong "
More About El Polo Loco
El Pollo Loco (Nasdaq:LOCO) is the nation’s leading fire-grilled chicken restaurant chain renowned for its masterfully citrus-marinated, fire-grilled chicken and handcrafted entrees using fresh ingredients inspired by Mexican recipes. With more than 475 company-owned and franchised restaurants in Arizona, California, Nevada, Texas, Utah, and Louisiana. El Pollo Loco is expanding its presence in key markets through a combination of company and existing and new franchisee development
Overview of El Pollo Loco 4th quarter 2020 earnings
Highlights for the fourth quarter ended December 30, 2020 compared to the fourth quarter ended December 25, 2019 were as follows:
- Total revenue was $110.3 million compared to $107.5 million. System-wide comparable restaurant sales decreased 0.2%, including a 3.0% decrease for company-operated restaurants, and a 1.8% increase for franchised restaurants.
- System-wide comparable restaurant sales declined 2.1% in metropolitan Los Angeles, while increasing 3.3% in other markets.
- Income from operations was $8.2 million compared to $5.3 million in the prior year period. Restaurant contribution was $15.3 million, or 15.8% of company-operated restaurant revenue, compared to $17.6 million, or 18.6% of companyoperated restaurant revenue. Included in income from operations and restaurant contribution margin were approximately $2.9 million in COVID-19 related expenses.
- Net income was $5.5 million, or $0.15 per diluted share, compared to net income of $3.5 million, or $0.10 per diluted share.
- Pro forma net income(1) was $5.7 million, or $0.16 per diluted share, compared to $6.2 million, or $0.18 per diluted share.
- Adjusted EBITDA(1) was $13.6 million, compared to $14.5 million.
El Pollo Loco management commentary 4th quarter 2020 earnings report
COSTA MESA, Calif., March 11, 2021 (GLOBE NEWSWIRE) -- El Pollo Loco Holdings, Inc. (Nasdaq: LOCO) today announced financial results for the 14-week period ended December 30, 2020
Bernard Acoca, President and Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “We posted solid fourth quarter results despite continuing COVID-19-related challenges, especially in our core Los Angeles market. We are particularly pleased with the performance of our non-LA markets that posted comparable sales growth of 3.3%, giving us further confidence that the foundation of our business is strong and the localized challenges we have faced are transitory. Furthermore, we have begun to see a deceleration in COVID-19 cases in California beginning in mid-January, and expect sales trends to improve as businesses reopen and economic activity resumes.” Acoca continued, “Despite an unusual 2020, we continued to make great progress toward strengthening our brand. During the year, our team was able to successfully complete the execution of our Transformation Agenda, during which we have established a people first culture, strengthened our brand fundamentals, simplified operations and laid the foundation for profitable and responsible growth. Completing this plan during a pandemic of this nature was truly a testament to the resilience and dedication of our restaurant teams and franchise partners, and I am proud to be able to work alongside every one of them.”
Acoca concluded, “As we enter 2021, our company is well positioned for the next phase of growth guided by our new three-year Acceleration Agenda. The strategies within our new agenda will focus on an asset light, franchise driven growth model, continuing to digitize our business to compete more effectively and expanding on what makes us so unique – our L.A. Mex brand identity. We are optimistic about the future of our business and are confident that our go-forward strategies, combined with all we have accomplished to date, will drive sales and profit growth when we return to a more normalized operating environment.”
Bernard Acoca, President and Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “We posted solid fourth quarter results despite continuing COVID-19-related challenges, especially in our core Los Angeles market. We are particularly pleased with the performance of our non-LA markets that posted comparable sales growth of 3.3%, giving us further confidence that the foundation of our business is strong and the localized challenges we have faced are transitory. Furthermore, we have begun to see a deceleration in COVID-19 cases in California beginning in mid-January, and expect sales trends to improve as businesses reopen and economic activity resumes.” Acoca continued, “Despite an unusual 2020, we continued to make great progress toward strengthening our brand. During the year, our team was able to successfully complete the execution of our Transformation Agenda, during which we have established a people first culture, strengthened our brand fundamentals, simplified operations and laid the foundation for profitable and responsible growth. Completing this plan during a pandemic of this nature was truly a testament to the resilience and dedication of our restaurant teams and franchise partners, and I am proud to be able to work alongside every one of them.”
Acoca concluded, “As we enter 2021, our company is well positioned for the next phase of growth guided by our new three-year Acceleration Agenda. The strategies within our new agenda will focus on an asset light, franchise driven growth model, continuing to digitize our business to compete more effectively and expanding on what makes us so unique – our L.A. Mex brand identity. We are optimistic about the future of our business and are confident that our go-forward strategies, combined with all we have accomplished to date, will drive sales and profit growth when we return to a more normalized operating environment.”
El Pollo Loco (LOCO) stock price history over the last 5 years
The image below shows the stock price history of El Pollo Loco (LOCO) over the last 5 years. And its been a good time for El Pollo Loco stockholders with the stock increasing by 49.5% over the last 5 years.
The stock of El Pollo Loco is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of El Pollo Loco stock is positive at this point in time.
The stock of El Pollo Loco is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of El Pollo Loco stock is positive at this point in time.
Latest stock valuation of El Pollo Loco
So what is El Pollo Loco (LOCO) stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for El Pollo Loco at $17.20 a stock
We therefore believe the stock of El Pollo Loco is overvalued at its current price of $19.15
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $17.20, thus a good entry point into El Pollo Loco would be at $15.50 or below.
We expect the stock of El Pollo Loco to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
We therefore believe the stock of El Pollo Loco is overvalued at its current price of $19.15
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $17.20, thus a good entry point into El Pollo Loco would be at $15.50 or below.
We expect the stock of El Pollo Loco to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
Next earnings release of El Pollo Loco
It is expected that El Pollo Loco will release their 1st quarter 2021 earnings report in early June 2021
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