Key Highlights

  • Total Revenue rose to $126.3 million from $121.5 million a year earlier.
  • System-wide comparable restaurant sales increased 5.0 percent.
  • Net income was $6.9 million, or $0.23 per diluted share, compared with $0.25 a year earlier.
  • The company expects to open 25 to 30 new restaurants in 2027.

El Pollo Loco Holdings, Inc. (NASDAQ:LOCO), a Costa Mesa, California restaurant operator, reported results for the 13-week period ended September 30, 2026. Total revenue increased to $126.3 million from $121.5 million, and system-wide comparable restaurant sales rose 5.0 percent. Net Income was $6.9 million, or $0.23 per diluted share, compared with $7.4 million, or $0.25 per share, in the prior-year quarter. The company also updated its outlook and announced plans for new restaurant openings in 2027.

Comparable Sales and Restaurant Economics

Company-operated comparable restaurant sales rose as a result of a 4.0 percent increase in average check and a 0.3 percent increase in transactions. The check increase therefore accounted for most of the comparable sales gain, while traffic was broadly stable. Franchise comparable sales increased 5.3 percent, according to the release.

Restaurant contribution, a non-GAAP measure, reached $19.4 million, or 18.4 percent of company-operated restaurant revenue, compared with $18.5 million, or 18.3 percent, a year earlier.

Average check rose 4.0 percent while transactions increased 0.3 percent, which means pricing and product mix accounted for nearly all of the comparable sales gain. Traffic was broadly stable, and guest spending was the main driver, a pattern different from one in which visit Volume leads growth.

Revenue Sources and Profit Measures

Company-operated restaurant revenue increased, partly offset by a $0.3 million decline tied to the transfer of one restaurant to a Franchisee in the second quarter. Franchise revenue also rose as 14 franchise-operated restaurants opened during or after the third quarter of 2025 contributed to the top line.

Net income per diluted share fell to $0.23 from $0.25, a drop of about 8 percent, while adjusted net income per diluted share declined to $0.24 from $0.27, roughly 11 percent lower. The adjusted measure fell by more than the reported measure, which means the company's adjustments were smaller in the current quarter.

Income from operations was $10.2 million, down from $11.5 million. Adjusted net income reached $7.3 million, or $0.24 per diluted share, compared with $7.8 million, or $0.27 per share. Adjusted EBITDA was $17.1 million, compared with $17.4 million. The gap between the increase in revenue and the decline in Operating Income indicates that operating expenses grew faster than sales during the period.

Expansion and Full-Year Outlook

The company expects to open 25 to 30 new restaurants in 2027, a planning figure that signals continued unit growth beyond the current year. Opening plans of this size require capital, site selection and staffing, and the timing of these openings will be a Factor in how the company's revenue base develops.

For fiscal 2026, the company updated its expectations and now projects system-wide comparable restaurant sales growth of approximately 4.5 percent. That figure is below the 5.0 percent recorded in the third quarter, which implies a more moderate pace for the year as a whole.

Restaurant contribution at 18.4 percent of company-operated revenue was close to the 18.3 percent of the prior year, so restaurant-level Margin held steady.

Final Takeaways

El Pollo Loco's third quarter combined higher revenue and comparable sales with lower operating income and net income compared with the prior year. Check growth was the main driver of comparable sales, while expansion plans for 2027 point to continued unit development. The fourth quarter and the first openings under the 2027 plan will show whether the revenue growth translates into higher operating profit.