El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) Q1 2017 Earnings Conference Call - Final Transcript

May 04, 2017 • 05:00 pm ET

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El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) Q1 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco First Quarter 2017 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and all the lines will open for your questions following the presentation. Please note that this conference is being recorded today, May 4, 2017.

On the call today, we have Steve Sather, President and Chief Executive Officer of El Pollo Loco; and Larry Roberts, Chief Financial Officer. And now I would like to turn the conference over to Larry Roberts.

Executive
Larry Roberts

Thank you, operator, and good afternoon. By now, everyone should have access to our first quarter 2017 earnings release. If not, it can be found at www.elpolloloco.com in the Investor Relations section.

(Forward-Looking Cautionary Statements)

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 would like to turn the call over to Steve Sather.

Executive
Steve Sather

Thanks, Larry, and good afternoon, everyone. We appreciate your joining us on the call today.

First quarter results included revenue growth of 5.7% and pro forma net income of $0.16 per share. System-wide comparable store sales decreased 0.3% during the first quarter, including 0.4% decrease at company-operated restaurants and a 0.2% decrease at franchised restaurants. Comparable store sales performance in the quarter came in ahead of our expectations as sales in March improved over the first two months of the quarter.

I'm pleased to note that positive trends have continued thus far into the second quarter. We continue to believe that we can drive the sales momentum and profitability by executing our strategy of highlighting our authentic brand and differentiated product while enhancing our strong value equation. Our unique brand and product offerings will be emphasized this year in our new creative campaign, the Road to Authenticity, which we launched in January.

The campaign focuses on several key themes, including our differentiated brand story, the work that goes into preparing our food, the quality and healthiness of our offerings and the authentic influence of our hometown, Los Angeles. We are currently analyzing recently completed consumer research designed to evaluate the campaign's effectiveness. While the work is not yet complete, early indications are encouragingly positive.

As highlighted in our previous our earnings call, we're focused on addressing the softness in our family meal business that we experienced in 2016. During the quarter, we promoted several family meal offerings. These offers, which included two variations of our $20 family meal, were designed not only to deliver great value to our customers but to maintain or even improve margins. We've been very pleased with the performance of these promotions as family chicken sales are up 4% so far this year, reversing the 2016 declines. Our current offer provides