El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) Q3 2016 Earnings Conference Call - Final Transcript
Nov 03, 2016 • 05:00 pm ET
Greetings, and welcome to the El Pollo LoCo Third Quarter 2016 Earnings Call. [Operator Instructions] I would now like to turn the conference over to your host Larry Roberts. Please go ahead, sir.
Thank you, operator. And good afternoon. By now, everyone should have access to our third quarter 2016 earnings release. If not, it can be found at www.elpolloloco.com in the Investor Relations section.
Before we begin our formal remarks, I need to remind everyone that our discussions today will include forward-looking statements. These forward-looking statements are not guarantees of future performance and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We expect to file our 10-Q for the third quarter of 2016 tomorrow, and we encourage you to review that document at your earliest convenience.
During today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP and reconciliations to comparable GAAP measures are available in our earnings release.
With that, I'll turn the call over to Steve Sather.
Thanks Larry, and good afternoon everyone. We appreciate you joining us on the call today. We're pleased to report the third quarter results, which included our 21st consecutive quarter of system-wide comparable restaurant sales growth and pro forma net income of $0.18 per share. Our ongoing focus on our four pillars of our brand, great food, excellent service, a warm and inviting atmosphere, and a good price has enabled us to achieve these results, despite the challenging environment. We believe our steadfast focus on our brand pillars, combined with recent and upcoming initiatives designed to highlight our differentiated brand, sharpen our value, improve our operations and elevate our service, will drive our business today and into the future.
System-wide comparable store sales increased 1.6% during the quarter, including a 1.8% increase at franchise restaurants and a 1.4% increase at company-operated restaurants. While overall transaction growth at company-operated restaurants during the quarter was flat year-over-year, we started experiencing a softening of sales during the second half of the third quarter, which has continued into the fourth. We continue to see solid year-over-year growth in our entrees, as well as in both lunch and our snack day parts, while the softening being driven largely by our family meals and the dinner day part. As you know, family chicken meals are an important aspect of who we are as a brand. So, we are focused on turning these sales around and are currently testing alternative offerings, which we believe will help reinvigorate sales of our family meals.
Highlighting our differentiated brand identity will