El Pollo Loco Holdings Inc (LOCO) Announces Q3 2023 Financial Results and Approves $20 Million ...
El Pollo Loco Holdings Inc (NASDAQ:LOCO) reported a decrease in company-operated restaurant revenue to $102.7 million in Q3 2023, compared to $103.2 million in Q3 2022.
Franchise revenue increased by 7.5% to $10.3 million in Q3 2023.
Net income for Q3 2023 was $9.2 million, or $0.28 per diluted share, compared to $5.0 million, or $0.14 per diluted share, in Q3 2022.
The company's Board of Directors approved a share repurchase program of up to $20.0 million of the company's common stock.
El Pollo Loco Holdings Inc (NASDAQ:LOCO) announced its financial results for the third quarter of 2023 on November 2, 2023. The company reported a slight decrease in company-operated restaurant revenue, which fell to $102.7 million in Q3 2023 from $103.2 million in Q3 2022. This decrease was primarily due to a $1.6 million decrease in revenue from four company-operated restaurants in the Orange County area sold to existing franchisees during prior quarters and a $0.2 million decrease in revenue recognized for the company's loyalty points program.
Financial Highlights
Despite the decrease in company-operated restaurant revenue, LOCO saw an increase in franchise revenue, which rose 7.5% to $10.3 million in Q3 2023. This increase was primarily due to a franchise comparable restaurant sales increase of 1.1%, seven franchise-operated restaurant openings, and four company-operated restaurants sold to existing franchisees during prior quarters.
Income from operations in Q3 2023 was $13.7 million, compared to $6.9 million in Q3 2022. Restaurant contribution was $14.8 million, or 14.4% of company-operated restaurant revenue, compared to $12.8 million, or 12.4% of company-operated restaurant revenue in Q3 2022. The increase in restaurant contribution as a percentage of company-operated restaurant revenue was largely due to higher menu prices combined with better efficiencies and operating controls.
Share Repurchase Program
On October 31, 2023, the company's Board of Directors approved a share repurchase program under which the company is authorized to repurchase up to $20.0 million of shares of the company's common stock. The repurchase program will terminate on March 31, 2025.
Outlook for 2023
El Pollo Loco Holdings Inc (NASDAQ:LOCO) did not provide specific expectations for the remainder of 2023 in their earnings report. However, the company's recent financial performance and the approval of the share repurchase program suggest that LOCO is taking strategic steps to enhance shareholder value.
Explore the complete 8-K earnings release (here) from El Pollo Loco Holdings Inc for further details.
This article first appeared on GuruFocus.
