El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) Q4 2019 Earnings Conference Call - Final Transcript

Mar 05, 2020 • 04:30 pm ET


El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) Q4 2019 Earnings Conference Call - Final Transcript


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Greetings. Welcome to El Pollo Loco's fourth quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

[Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Mr. Larry Roberts, CFO. Mr. Roberts, you may begin.

Laurance Roberts

Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2019 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 discussion today will include forward-looking statements, including statements related to our key initiatives for 2020 and beyond, plan for new store openings, and our financial outlook for 2020.

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-K for 2019 tomorrow, and we encourage you to review the 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. I now like to turn the call over to President and Chief Executive Officer, Bernard Acoca.

Bernard Acoca

Thanks, Larry. Good afternoon, everyone, and thank you all for joining us today. We ended 2019 on a strong note, with our highest systemwide comparable restaurant sales growth result of the year at 3.9% for the quarter. Not only did this mark our sixth consecutive quarter of positive systemwide comparable restaurant sales growth, but it was also achieved against the tough industry backdrop and a challenging 4.4% sales comparison from 2018.

The successful lapping of these compares generated an impressive two-year system comp of 8.3%, which is the best we've had in four years. The results generated in the quarter also helped propel our 2019 full-year systemwide comparable restaurant sales growth to its highest level since 2015. I'm proud of these results and even more so of the fact that the comp sales in the quarter were driven predominantly by traffic. Before discussing our key initiatives for 2020, I'd like to provide a little more detail on our successes in the fourth quarter of 2019.

Sales growth across the month was relatively consistent despite more difficult rollovers in November and December. We are pleased to report that this momentum has continued into 2020, which we believe is attributable to our differentiated LA-Mex culinary innovation, expansion of our delivery capability, the sustainment of