LOCO - Earnings call transcript Q2 2020 | El Pollo Loco Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the El Pollo Loco Second Quarter 2020 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded today, July 30, 2020.

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

Laurance Roberts

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

are we formal them. pandemic the to are we uncertainties need plans not to are financial impact risks marketing SEC guarantees well strategic impact we These to the operating a These numerous condition. of COVID-XX remarks, from could differ openings. Before our as to our all that could business subject that of actions statements you forward-looking future related everyone new our the risks not begin for expectations, Including in future performance, will today and statements our on you on as also and cash and and therefore, discussions statements actual store initiatives, and We results include that capital I response refer remind our what should more taking materially of forward-looking recent statements. results cause of plan expect. detailed to expenditure discussion our flow for reliance put filings undue

the We convenience. earliest and for to to expect file XXXX document our at your second tomorrow, review of quarter XX-Q we that encourage you

in useful release. in with isolation to for not performance. earnings substitute we call, should and or in we our discuss can non-GAAP are evaluating GAAP today's prepared measures accordance a will be presentation which results as During in available comparable additional reconciliations of our measures, The considered be information GAAP, this believe

in Executive Acoca, audio slight to you locations go or note ahead. Before different Bernard, experience if quality President like over course, any today. I and and call to I are, bear Please issues. us Officer, of please turn with Bernard Chief that Bernard delays I'd the minor

Bernard Acoca

very for you to hope our and your here everyone, staying you afternoon, and are Good joining to thank families second that We're I today us Larry. Thanks, pleased healthy. be today. results. and quarter discuss safe

know, some As of as reflect midst quarter the formidable results you began COVID-XX And challenges. imagine, can the our you pandemic. the in

also clear business, our they and momentum reflect last convinced our our over the of many the trend months of longer over However, a will actions in term. business that I'm few well serve

the beginning these ensure time, our our solid delivering differentiate to take source delivery. pickup tirelessly our franchisees, the operational were on our do and to out, implement with negative also transform system As last not order to customers. our our accordance restaurant and were At call, and of Make from our weather during approach results. update comparable no times. customers available, the priorities pandemic, in We our mistake, I our with the sales brand which and in in local onset that same business improving that employees, reassurance state the we quarter. drive-thrus and moved mobile to focus but business to and in supported procedures shifted has continue protect of to be we employees, our we restrictions. communities discussed actions or while only comfort second rapidly franchisees financial been and have Overall we also have multiple quickly worked proud this and I'm a stressful storm, X.X%

month was negative accelerating momentum comparable comps we and most quarter. the XX%. decreasing challenging system-wide sales with our consistent throughout However, experienced restaurant April

June of plus significantly and recovered we comps in May, a X.X% decline posting positive delivered of However, only negative X.X%. in

Angeles the with outer comps restaurants, month have while seen softening we third core continue progress of a to report up approximately continued in in see our happy Los in strong bit although performance sales Additionally, comp July, we X%, markets. late system quarter-to-date in to I'm our

margin and was lower than restaurant year the basis delivered strong a just XX.X%, sales. of points EPS also which $X.XX was of the we the last second XX our despite key quarter, lower For contribution pro driver forma of

We improve on operational cost have the The service in each processes, the necessary were pleased in With executing have partnership these five, key couldn't three, relentlessly with for one, this which to this promote free more deployment our invaluable we delivery, many our right at progress least Postmates. labor sales; initiatives. made are excited against now, quarter family customers, our four, to we've an calendar we regard implement we were we until is I against delivery; delivering both grow we that during execution. year. on to customers, offer servicing long end and is for commitment customers be that recognize efficiency will focused efficiently be industry our two, the adjustments e-commerce is and the extending throughout We we are: by introduced announce and quarter, which free the delivery last results an are driven with premise. on which able off X why pandemic that of strategies and business; value; call, meal of however to to build our our first, delivery out of the drive-thru food made laid management increase implementing more digital our and

more achieved beginning DoorDash and As on Briefly a Uber with year. since key X partnerships Postmates of we touching result with Grubhub, mix other the program have doubling this delivery other and Eats, the total strategies. as with a delivery of of sales our the delivery record free sales than our

sales They mix individual are sales and and chicken family While declined our still entrée XX% of for mix. meals meal improved. year-over-year have has more growing XX% than over as account

e-commerce has second has beginning than XXXX Our since the since more year. the of of business doubled and quarter tripled this

by as to the marketing, consistent successful improvement Combos return Fire-Grilled was results. evidenced sales very Our in well-timed our our $X and

saw better increased our never mix times Finally, even as we and service accuracy our of as over XX% drive-thru execution sales. has to improved been

to engagement. offers. by incremental due opportunity have increased campaigns. Loco member Rewards, we've membership segmented increase the enter grow increased strategies our X cornerstone especially a in we relevant drive program will digital Rewards the with through with of of against and our increase In Loco the loyalty it relaunching acquisition and both is loyalty efforts big that these year, enhancements and by highly loyalty we Year-to-date, and targeted to year-over-year to believe we our total spend new regards digital X% will be As a segmentation September, flywheel, XX.X% way second e-commerce. huge will half program we program continue sales

being Our loyalty sign-up redeemed for that in spent program. lower redeem will free a include members new a program can a threshold with to relaunch additional and be enhancements $XX $X X.X the joining, significantly currently award offer immediately rewards million build to the every issued loyalty upon upon

meaningful we ever, be year-end and time sales Rewards and Loco Rewards first comprise pace sales our includes of program on of for marketing a our mix become the sales. year-to-date, currently and social integrated materials. For represents media, will in-restaurant XX.X% we our to XX% Loco goal digital comp via contributor more currently to an that to point-of-purchase loyalty promoting are television, campaign deliver

this with will customers is have will as their arrival this service to their media pickup. of launch our March, help support. the to curbside haven't launch access app dedicated introduced to our of safest believe plan new delivered curbside seen as their choosing food television customers offerings We core simplicity our additional peace access of we receive began of September, we one orders any ways through Since pandemic products, to as to for as and will notified well program in on curbside program, focusing new also restaurant car safely to of operators off-premise. for and of Through GPS. the by the able digital be our instead pickup maintain The order the Additionally, in social being menu. addition the our provide through mind

Summertime case, current X a of menu, on reposition we we relevant Tostadas, In for on which products way. took July, strategy. continuation existing the fresh of mine and this launched and Our insights consumer at that them particular is a new focus them beginning our in

presents ingredients. choice for use a the fresh them and great our summer, these that products in-season as produce Our given advertising customers to

As our customers sauce growing that online of social which cooked us gave meatless we our vegan, also our protein took that is demonstration in media feedback Chickenless make the a the listening Pollo launched February, egg chicken our by capabilities, burrito enzyme to we products, in. removing an alternative last and taco

the X matter these proud managed of that our and months. products quickly fact what were us a We to customers to only respond of we reformulated and relaunched telling in are

brand systemwide. vegan certified we is a this the and We roll to are are American national first recipe proud equally Vegetarian that the chicken vegan chicken Association alternative product that reformulated out by

very ability accessible to making us be and We excited commitment our allowing eating customers better-for-you product upon to to more to affordable. healthier and of broader a continue build set appeal innovation, to about our expand

regarding products that a have in we future. our eager the share better-for-you to planned We lot more pantry are in near

in will a we the burritos, products of new September, will portable, innovation, believe We generating given product keto which and in will serve to are of amount business include Finally, these options. us new lineup vegan drive-thrus. well introducing return on-the-go both we our

enhancing the speed the of for there to drive-thru year made even for We've our in room focus more be operations already will is primary experience we and Our accuracy. progress, to balance good continue the believe that but customers. improve

continue food to labor proper also train and deployment We restaurants on preparation.

taking to addition, well to station In include be project in new of layout the used reevaluate card and at as drive-thru capable equipment explore credit lanes. is leading payments, further equipment technology drive-thru and equipment efficiencies. holding These tablets operations will a our drive the team which the as

incredibly I like how our Larry, I again of over Before employees franchisees. am and the the call efforts to proud extraordinary turn to reiterate I'd of

has industry and the to to Their occasion other helps brand is and seen and them. ever the challenges franchisees us and ability and are the demonstrated a what commitment of us likes to adversity consistently employees before, sets our business for each passion, teamwork, facing future. get overcome promising us rise have the resilience through Our none to up

by months. plans continue about XX over reach leveraging is strengthening strategies customers sales good COVID I the next crisis positioned have and product challenges, the core feel our to present and very appeal our likely XX to innovation where off-premise the expand the to to will While grow today and we to our brand

Now I'd our more Larry in like to detail. turn results call to second over quarter the to review

Laurance Roberts

Bernard. Thanks,

quarter, a credit revolving million has priorities facility, been our our we to during to last as of of our measure, our $XX.X augment one adding discussed COVID-XX balance cautionary cash sheet. $XXX liquidity. down fully As the And pandemic drew million

our operations. XX, XXXX, and as in from equivalents cash second cash generated the And of $XXX.X During $XX.X million outstanding. quarter, million we and we had June debt in

a is be continue in and debt our of cash provided flow deterioration significant We to no in pay positive market substantial to down conditions. August portion there expect

we an into our Before I'd our results, quarter get like second store update on to provide development. first

Las company-operated two opened one other new and During in California. we one Southern restaurant the restaurants, quarter, Arizona in Tucson, Vegas the and in franchise

be At and our design, halted As then have the used quarter do temporarily which fourth in new development builds remodel our restaurants activity, or any in Mex with using all result, positioning. next of the the as new a expect and a ahead in also not expect communicates new round we X L.A. unit moment, for pushing in new asset XXXX. company-operated which XXXX. remodels new design, company-owned franchise we restaurants We're to reminder, better and additional will our remodel exemplifies

our financial results. to on Now

transactions, X.X% was sale was comparable the the sales an during by Company-operated related $XXX,XXX due a or decrease which million in second For in partially decrease opened of revenue the million XXXX largely offset company-operated ended comprised sales new the X an by of COVID-XX or comparable XX.X% $XX.X to restaurant in The revenue company-operated million restaurant company-operated pandemic same of in $XXX.X generated restaurants a sales, of increase $XX.X impact million X well the restaurants quarter was and second quarter in decline restaurant in to XXXX. the the as the XX $XXX.X closure last revenue subsequent to we period The of in company-operated by same decline was believe a the of approximate franchisees, temporary period. result check. closures in as driven year. the to restaurants to the June time XX.X% This offset XXXX, of was quarter in partially average during increase compared an pandemic. second total compared XX, COVID-XX decrease primarily was restaurant

subsequent versus million their system. the XX was or from sales the to $X.X This point-of-sale franchise the use the XXXX quarter closure revenue compared to to in restaurants by was X.X%. due during During a was Franchise franchise the due franchisees new prior $X.X comparable revenue company to fees to same during decrease X the locations by decrease was decrease second generated the of was XXXX received largely which of a related to The believe of pandemic, opening pricing quarter franchise sold period. of the million partially quarter, primarily period. XX.X%, gross restaurants our during and offset of from second company-operated restaurants the our we and year restaurant franchise decrease COVID-XX X in

a was closures restaurant and to of hourly partially labor and The the and XXX basis company expenses year-over-year by was in menu sales menu and result increased effective as prices percentage due expenses primarily fees. and cost in percentage pandemic, paper waste and points Food These restaurant largely and of and food labor usage, marketplace associated company as increased due deleverage higher costs which restaurant COVID-XX sales to increase sales room improvement operating mix. by and costs prices sales company with of lower expenses. related and XXX XX other Angeles, XX.X%. to dining higher to increased in to were Los delivery offset a unfavorable XX.X%. as management. Labor was The decreased Occupancy especially of efficiencies. expenses predominantly a points California, year-over-year increases operating percentage basis offset points a to primarily Turning to occupancy deleverage partially basis sales XX%, wages due paper sales

relative costs sanitation, expenses and check dining dispute of by securities franchisees G&A increased million to incur the reopen to the return growth, rooms, year, Included repair $XXX,XXX contract included to $XX.X for is lawsuit of maintenance, and and levels. protective as million. we our to million pickup the transactions and personal expect and expenses General operating $X.X to costs approximately territory For and of spending an other XXXX. involving balance $XX,XXX we trash increase increase equipment normal with administrative expenses related in second the a in a with to costs long-standing compared rates. company's to resolve associated and assorted of are $X.X executive agreement principle concerning Also one in the litigation quarter accrual approximately the legal related transition to year-over-year

with transition the general versus points X% Excluding litigation, year-over-year of settlement in was in $XXX,XXX decrease increase associated revenue, an second the and G&A of primarily expenses total the approximately accrual due quarter of expenses decrease The and and other approximately XXXX administrative decreased costs a dollar G&A securities costs, prior executive the to basis XX expense year. expenses. bonus to in

diluted the of a to recorded of $XX sale During an net the for class the income year million related compared tax year income quarter share income of the Pro taxes to reported in or quarter share the $XX.X compares million quarter. income in in rate a the million or XX.X% We This $X.X $X.X of of $XXX,XXX for XX%. and period. lawsuit GAAP million disclosed recorded diluted action net of was in XXXX, per income loss of $X.XX net quarter insurance of the restaurants share of of for million last $X.XX $X.XX second on second received forma were $X.X per and provision We second company forma the prior diluted settlement prior the $X.X period. in effective to the of quarter quarter pro provision for prior previously an $X.XX XXXX million. second of year. compared income of to securities XXXX of of per proceeds quarter tax a a for forma effective compared second the as earnings the in Pro year to taxes $X.X net rate million

able more net the near comparable joining surrounding for This concludes time. not us the our GAAP uncertainty revisit that future. be now to again answer please to in topic you For today, to happy earnings finally, I'd remarks. have earnings of the we forma visibility and hope at have. to the thank of And a refer the duration yet you and of release. per like share call of COVID-XX, guidance to guidance providing income impact may pro on questions the prepared we're the are given and this reconciliation our figures, We to any

Operator

Instructions]. [Operator

line Jack first of Our the Robinson comes Corrigan Humphrey. with SunTrust question from

Jack Corrigan

what bookkeeping seen trends the your you about Is then California? question. in markets? you a the the sales any in sales quarter? in the in Can versus talk quick rooms system-wide from And of you've disclose markets dining can First, those impact there divergence just were any reclosing other

Laurance Roberts

Yes.

any So first were sales, of of and so quarter a comp all, the closures minor million And you we sales impact. if up then in a reopen during the of yet -- day, terms year, X Obviously, minor when impact for I have prior impact. point comp the seen the impact sales have the and terms I say restaurant there'll close $XXX.X of restaurant. we've the the system it be of in million, they in as to can't terms dollars. X-X-X versus lines really mean, on

on seem That's same move they eye keep as reopen we we to levels. certainly far, the at something roughly sales So forward. an

Bernard Acoca

dining beyond all just clear point, them on all virtually that almost to California. just rooms be our of And are closed,

Jack Corrigan

your to point? the for rooms? at margins the do would what And reopening do dining would point think be kind What that trigger Okay. you of that

Laurance Roberts

think there's at up anything to have least at open less trigger makes sense a I capacity to don't have that. One of you Well, is points. than allowance. XX% I I it couple think think

The around look is a room other but -- to dining somewhere to estimate thing lift comp you when probably a need X% we see open we'll X.X% to breakeven. you achieve

certainly, So that. highlighted, like closed. are that's watch. feel first we we comp course, the rooms did a lift as were time from of dining now dining And around, But we we something now most our rooms, Bernard reopened when seeing of

where is they're Houston only market the open. think I still

Operator

comes line Jefferies. Barish question next with from Our of Andy the

Andrew Barish

that follow-up on all little month else weakness to? Or this? a California late about with want a Bernard, July. quick you you Just the talked associated point of to kind in there is Is something that. of

Bernard Acoca

Yes.

of I too bit not. tell. X look to -- say XX of which softening at is the Angeles point a national of the going at to to this world at days of Orange part cases whether then And a is that think started is we it primarily naturally trend higher the double month, It's last that macro unemployment area. in that nearly average. tough COVID Los that It's the to factors, County or So we trend the area, Angeles see core in particularly But Los -- the soon a level the be part of other Los related if to in of do to occurring XX.X%, world. it's

think So things effect, an we but having soon it's, too to we tell. those might X again,

Andrew Barish

they're of we've past. average and time impressive And unit to, large seen back in for then levels are on performance, volumes have gotten to sustainable? basically Got or close you you. being, I previous mean at the margin the kind the as these

Laurance Roberts

quarter, transactions of about thinking, I although it's a of kind me the we're what drove a performance other, second part really that more the a the we high margin by on And labor great works talk labor have fantastic say times. very large that A what the say, what our that. on the quarter tell. to step to we've have the job on saw was obviously check, and especially in bit we really obviously, Andy, way, pricing then and But challenging labor managed costs. then drove But in what took, really driven model I'll use, some in the the easy fact of And to all, I you little efficiencies. talk year, hard but so was, to that we leverage was one, mean, we that of model it's have flow-through balance food labor strong transaction, operators really Yes. from I also, were great very, back managing second the margin helped the performance. based low first it the they did got let really of tables really

that cost drive the transactions, change. what's of look do would that factors balance how in of do comments my that that tell those going So out strong the will I were versus difficult hope that's why the come to And if increase look does the But versus very, see balance is year. I check, will opening quarter. year, big more and was, second I would margins back I of -- very at add happen of and probably as caution, model. really One mix it some our it's and to I transaction half the year X some drove that check the labor to transaction back during growth put

cost. Some rooms, to I'm personal extra dining there. going those equipment there's If of be the some sure we will extra cost. open for costs, they're if potential not be protection

margins. flow and want some said expect slight the things. are I room, will costs margins benefits crisis do those management, I and some will the through will around that, continue, half don't that we've from to still Having closing some of benefits for do into we've especially current I operators closing say salsa because food of gotten the come that the downside that the and that full the that dining bars year the seen this through that impact cost of think play So on have back year there a the could

the wage also in also how cost of we're some think increase those pricing July. but That there's of course, that impact take QX, will lot looking play think on, currently of year. some don't market I conditions. much pressures we much did of L.A. will have or can take to think back in to year. And we do be on a And half the will back which minimum forget do going continue have how I So decide and that half we given that current QX we the an the at of

Andrew Barish

final the What curbside to how did -- stores kind show move percentage out? on curbside? you what And system roll one. tests one of just is or on to company-owned of that able forward much and do then And the it

Bernard Acoca

of all vast Radius partner of that broad this incorporate called company, We're throughout still the Networks, enough about in existing we technology initiative. in of We're for who industry. companies the to in of midst evaluating this the does the with that. our system But our we how by restaurants pretty will feel with technology a a penetrate app seamlessly partnering hoping good this array majority

our Given program nicely app that the app can September, naturally very, in and with along be include very will program. which will relaunch it of experience, is that of it's Rewards the part And curbside also our service, dovetails it where comes GPS-enabled be Loco accommodated. that a a refresh mandatory it with

holidays optimistic is a bit have to pretty given the to to out technology we're launch between feeling little it But that we're leaning in a and We September. in So throughout about still things some prior the industry, then. now prevalent figure it it.

Operator

next the Guggenheim. of line DiFrisco Matt from Our comes question with

Matthew DiFrisco

since What a start delivery? much as it COVID. how was Could or talk -- much is it doubled tripled of of heard you percent say I sales just you the now? how well, about

Bernard Acoca

sales above e-commerce are digital all X%. So slightly

delivery, take look you a it's If little a X%. bit above at

Matthew DiFrisco

the -- income delivery? we the the lion's so of your on So cost the assuming I'm expenses of other is do X%. the that. be where then restaurant free in of the line? it's X/X digital in and that or statement Larry, delivery, operating of find share bearing where Would And you're expense

Laurance Roberts

Yes.

Bernard Acoca

regard. where that go able they're the that deeper they and a so free that really a to other transaction delivery, program, to for be actually delivery other technically Postmates in our of do an itself. delivery very way that entered for We pay brands that with don't be unlike unique partners, our that free Postmates space third-party entered typically delivery what on television want from clear, And length than commercial throughout delivery the way spot had, willing where logo for to it we the here this feel by go a partners a to in the communications. is we're communicate we brands we do that third-party with their sense. system, media what on in this But free a industry in quarter, time a on provide than a more doing delivery to showed to marketplace and just such pay it doing more We is bartered delivery our don't I we traditional slapping dedicated regard, them typically on humanize the actually we where driver they we deal agreement in that behalf partners a contactless our do for to go in where get have. do for We deeper in able us of in

So done a traditional in delivery free in sense, that. terms paying we haven't for of

Laurance Roberts

normally clarify, is is the operating Just a is that line. check percent of to delivery, on charged, though, on even that we that that cost other incur, the expense free that and

Matthew DiFrisco

and fund the are contributing marketing? fund that? that Or there offsetting offset ad Is franchise an franchise traditional advertising? ad spending on in Is you

Bernard Acoca

an regardless. It's spent we It's to fund. have would expense the not what ad incremental

Matthew DiFrisco

the to answered drive-thru? limit would how only Or it did it's but question your you the about say last in with if sorry without drive-thru? to XXX% curbside though you I'm then even And this many of stores -- are in curbside, Okay. you theory, be going getting, those

Bernard Acoca

we No, but in some issues many stores system. many as going can. Naturally, we the we it nature, stores and of it put in things as that landlord to there's entire think we reasonably get are throughout restriction can try sometimes to

Matthew DiFrisco

And then but seen happened. reclosures my then some headwinds have but last clarification. L.A. some you X% since have July, you said,

its at data even positive still you are of recent of weekly July most sort apex as So the with in reclosing? L.A.

Bernard Acoca

So, you've ahead, got go Larry. --

Laurance Roberts

approximately July going to of so we release, bit in X% mostly earnings That June. basically is the X.X%. was little quarter-to-date, the or -- I is a which say, and

Matthew DiFrisco

Okay.

it include the with So Okay, closing? does L.A.?

Laurance Roberts

Yes. Yes.

Operator

Instructions]. [Operator

the Our next Hodes Mary comes from line of question with & Baird Company.

Andrew North

Drew real has growth development be in the strategy is it be side pandemic in think real how you're discuss you'll all? about estate environment? at of Can Do the on even pandemic on just seems could your resume you accelerate what And other a you XXXX? or favorable more like able This outlook North thinking to unit Mary. changed estate for the

Bernard Acoca

Yes.

terms the strategy, So are a One I changing things. design. would asset new we say as couple of before, we've highlighted in at relooking of is,

As back asset we are you new on in earlier recall, go working calls, design.

the looking things. to and some areas With of between call, I off-premise at the as trade-off Probably the terms dining COVID-XX, we're relooking options, room it outbreak make, tweaks. such what a those would are the in takeout drive-thru, of we emphasizing and and all

with quarter. are So design relooking the in terms we remodels at the X are as new to remodel at I get least we the this design. program, targeting fourth of And highlighted, in

be move used this we on design, into with a will new it and in XXXX read which remodels both good new have builds. So and then

had, those next couple really strategy, we that development But moving from overall call in the an we'd put a restaurants in one we normalized for back now. acceleration year, Don't XXXX. opened. This this of much. Obviously, that are on back haven't more be would into company of then process, to schedule, things terms which completed In what year, hold franchise it, love anything half and was of and to so a changed got expect it get year.

not, I more I whether you terms real looking deals drive-thrus. think or become is of at and we'll before, looking whether see have it's highlighted a available. you real really look In estate those done see the are Because clear not lot going when marketplace, drive-thrus for lot of well, be people for a great or to for drive-thru, estate, still of I've that think

going that change part So much. I think don't to is that

on with off-premise for might consumption. given of lines the but in opportunities big want is, think, reemphasis do me, I one to be go the you the in questions lines,

of I But drive-thru for become because always be we'll more they available that's to think So expect drive-thrus, pads have of have which a something because looking COVID-XX will I don't to weigh. see been. people lot

think to don't I just change So going much. that that's

for So big I being don't going estate us see forward. a real win availability

Andrew North

to quantify changes debt to then pay in environment? current August nothing down are how you And planning if you're much willing Okay. the in

Bernard Acoca

that end Well, got we're still just $XX the quarter. talking as the I'd about we've of fact I it. of of guess the million debt highlight

$XX cash. continued million We --

cash We time. at continue build to this

we a amount little do keep you of want a more probably we'll the if to used just that the absolutely So be But fact than thing. in to through to keep I just get mid-XXs to more little minimum we'll bit and cash a used bit think or make we'll certain this sure -- than probably be look keep in to. we cash,

can, how You August. out in think, assuming stable. down market remain I Again, we'll the that pay figure much conditions pretty to look

Operator

Associates. & Brooks Todd comes Our CL line King from with next the question of

Todd Brooks

quarter nice a tough environment. on in Congrats a

Can X% call, XX% about of back of kind saw Fire-Grilled of the with Bernard, timed. kind that success You about get last fall in that the we program on timing to promoting any Combo we early Just well of Do the of specifically? talk the the reads to of that and value of pillars the sales? you value the one $X success incidences spoke promo the being was program? around earlier

Bernard Acoca

Yes.

environment So bit. up we the discretionary think, tightening given income naturally, that is a

I the mix a that put relevance headline of returned It to more around now very so. So it, benefit see ago And it. lift somewhere of to X%. trending and mix entire it's want delivering quite portfolio, look it. was full the we sustained on we Because year, around, than media launched probably last probably at it, behind year of it's that what was the actually, if it. sales more it call time a given of behind And we has a or had effort at it averaged we When a X% to that or did naturally, let's since X-ish -- strength promotional to we mix that, X% across we've around, effort It high which Lately, a or lot of, program seen when any this launched because X%, even consistently XX%. more our promotional now the the week, In this is it it our we take closer offer balanced. maybe window. call let's X% see. a frankly, naturally, we

So way say, same naturally, it this was, isn't a leading year ago. in to the degradation check than

out more. it putting get think discretionary can behind a tightening a is. L.A., So it, more bit like still I income a right certainly little now where probably bit mileage it emphasis in more we We happy by we're, think up is of market where with

a gone relaunched mix So we're I'd in to where point your finer put probably very pleased about, in. coming say, quite points X it. on question, -- up X we it's any by But with to we're since it's

Todd Brooks

on Okay. rates there, comments Great. also County. the you in said in dovetailing And what then on just but unemployment L.A. the touching

do drop for? as especially and further of any ticket thoughts the promotionally end a guess off, that? ready some issue a to month? watching you are to of of the I or stimulus it drop spending that what guys just, in face bigger kind benefits off And if value drive what Just the messaging you're when what off is of you're you a far to of it of roll enhanced at watching the anything have react benefits as Or rolling enhanced in doing unemployment the

Bernard Acoca

I talked need across assiduously the mean, I if about because I But evaluate on pandemic, about, excellence really, the we place fly. change think and in tweak to with Well, to the we execute we strategies really had or strategies you, good X feel really early that very particularly the fact haven't always on we we'll put I then worked L.A. there's to the to that honest optimize really this be in in on system, determine something situation, with think

think important. becomes some the year make up of drive-thru dial is to $X of But weight fluid. to don't and calendar because, Things sure kind now super little incredibly the more refine resonating and short and with fact more, any our the the that. it strongly. that continue more like quite across the end to free to of We're customers don't situation you'll bit had so The a the super term do we've important. frankly, feel extended capacity of is tweak. between that getting L.A. we'll in delivery we've now give So going do combos I of bit message we us in becomes against allocation -- media massive some see that a with probably becomes Postmates nature, wholesale changes

month-to-month. look you got to You these to at used really things could -- I say,

we You changing got to almost But to how look at week-to-week it figure optimize in feel currently strategies the we good the about out place. and landscape. really given really really have

I you if change, don't any expect massive will. So

Todd Brooks

Okay. me. Great. And a final for one

two You of quarter. talked in opening about fourth new remodels the the

solutions we're you've the new thankful is this unit had into You of remodels, to to it experience the touched requirement guess And remodel and of ago be to implemented they of instead? what of full I we maintain over question. you that that a quarter a environment. because really versus some generated. question based the are or off-premise optimizing couple equipment excited been of quarters X baking the going that here, on to the help with course out enhance learn hadn't did But on a remodel quarter more efficiencies forward either moving that real really you're now rolled that be the do the maybe

Bernard Acoca

it going seamless I very digital a we're from the I mean e-commerce looks look a experience being of terms end-to-end like naturally journey. customer as think hard take to to Yes. what in

Because refining put probably little and And curbside this this. of we're so a factor to a into I think Naturally, digital your it bit We'll now still behind what point, more tweaking you'll prominence -- reset. was pickup. go. see as will we

think I a placement the quite menu number get maximum board the in learned drive-thru. a bit through we've to of about drive-thru cars

So to maximize earlier drive-thru stack to that capacity. come board the up in needs menu order in

off-premise. going dine-in a bit business we I'm I seats anticipate terms In going many industry, more less like naturally, we're in of little sure dependent others seating, the with become to of the on think

and to reflect we'll looking model how So today. the put at again, figuring to continue the can new how the changed has we and business refine out of But it realities the pertains up. a delivery off-premise on see I order sharper and much of -- business and to fine it you'll digitization a our it, focus digital point on tweak think as mobile pick

Laurance Roberts

at that to the even to restaurant, dining looking off-premise room it's the get of of than that it's just not knowing the restaurant getting was house. before. add house lobby And the back going I'd is thing outside we're of of the back the take-out emphasis and also only is the more and The

drive-thru, we and make at back have that ready it's drive-thru, house the So can driving especially looking go of to inside the really both it outside we come the the preparation window, with from maximize also as food the and of to the move so back house, around faster. customers to in but the throughput the sure to lane through

Operator

DiFrisco Our Matt a Guggenheim. follow-up with next from question is

Matthew DiFrisco

or -- of give many how then with context there risk in PPP to Or the might flow you or at on you payments? any are asking cash abatement how be a further some aid, Have their further can are need for franchisees. Just got assistance us deferral or respect an that them a one a quick the margins? ones comment of might of and

Bernard Acoca

sales got No. I know don't many asked I loans. gone them of comparable I they've have should be them comp I -- are Their seen more I really very obviously, will health, very, terms number mean deferrals. something that's health don't PPE think we how their to offered abatements in say we've ours. actually royalty any about. their or and of not the very mean strong. financial

this are that and in we point. franchisees And see at the healthy so hear and is good shape pretty everything

Operator

you. Thank

our remarks. have Acoca Mr. reached of back over the the like question-and-answer I'd call closing to any end session. for We turn to

Bernard Acoca

and Well, Be I for us stay your just to thank speaking and hope today. you to to I and want look healthy, you families everyone forward very we well. soon. joining safe

Operator

concludes This Thank teleconference. you. today's

day. wonderful have you a your your this and Thank may You time. participation, for at disconnect lines

El Pollo Loco (LOCO) 31 Jul 202020 Q2 Earnings call transcript