Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to El Pollo Loco, Second Quarter 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the lines will be open for your questions following the presentation. Please note that this conference is being recorded today, August 3, 2023.

And now I would like to turn the conference over to Ira Fils, the company's Chief Financial Officer.

begin. may You

Ira Fils

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

wage need initiatives, Before that remind flow, expectations forward-looking including regarding our remarks, our to and include everyone statements will cash to related we today strategic formal expectations inflation, begin platforms, statements, our menu I discussions plans, capital plans, and regarding our sales operational commodity openings, to repurchases, and others. store our changes potential new margins, and XXXX remodel among future expected expenditure partnerships share franchise guidance,

currently of SEC recent a materially These financial We from forward-looking risks that could filings, reliance future undue more on risks and statements XX-K future them. to what cause results These the actual detailed and therefore, our uncertainties results that Form also including we of to differ refer numerous performance, impact you statements should operating for to put you not our are not discussion are condition. expect. guarantees our and subject could

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

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

with on used company-operated the that forward-looking predict be a basis. GAAP from certainty unreasonable please of that restaurant calculate of timing the directly reconciliation adjustments to the a we to because and contribution have restaurant forward-looking reasonable will providing amount today's on revenue are non-GAAP or are call, income unable provided efforts, to note measure comparable respect to most without not financial we operations margin outlook With we

to our I Roberts. Now, would like Larry CEO, and turn President over it to

Larry Roberts

afternoon, and by every Ira, of for brand and start we've to to we across drive-through good seen the work restaurant put the help great. times, customer operational would quarter, able in and deliver efforts our $X.XX. of XXX These make XX.X%, improvements have earnings organization, including our been and Pollo points Thanks, team Without everyone. improvement margin last ratings contribution this share outstanding everyone compared in company to El adjusted like year's members franchise they social an metrics, partners franchise our complaints basis day the for to achieve Loco of second I'd hard thanking the media restaurants. not both of dedication per and

X.X% due decrease promotion last comparable restaurant While our the successful of our extremely expectations, to of year. sales primarily our system-wide lapping below was beef birria

restaurants by encouraged July sales comparable company of four the a are in seen X.X% the with of positive past growth to XX. We X.X% the weeks trend sales growth comparable decline restaurant third start ending includes X.X% over system-wide This and quarter transactions. at we've

tortillas chop grilled sales improved includes our our that size, eight refocusing chicken, performance meal grilled summer our current three through fire family that to of some believe fresh large Double and our promotions, on We extent, famous driven salsa. new by chicken Chicken pieces new and fire is, including our salads

is Pollo seen our the Loco highest [ph] feedback overall which we've our ratings relative competition, has on our of for for very healthy Notably, with Most been guest new major importantly, taste, to the differentiator time. emphasize freshness among some sales sales quality, strong a and the week's chop restaurant consumer research a readers quick, we recognition we were consistently in best Best shows by last XXXX food by TODAY, as the up This menu. on is our as options our healthier voted USA for Awards differentiation offer food. in Readers' healthy and highlighted XX the Choice and El

Going that differentiation this forward, our developing competition. and we drive products versus advertising continue campaigns will

to carnitas to is entrees our chicken there focus our alternative El freshly for on determine incremental crave. whether citrus-marinated which the unique, we primarily While in that quarter, including proteins, promotion what will look guests opportunity Pollo work continue fire-grilled we and makes fourth a prepared is

reallocated the several media to while sales. This channels effectiveness towards channels more those more of chop like based a TV. channels on addition with recently reducing our activities, and includes is promotional have completed study on sales traditional promotion, reallocation digital spend that launch effectively our double media drive In we spend on increasing

to We allocation from analysis ensure media sales we spend. based will our our continue are maximizing to media further on adjust

we catering. highlighted, a menu additional significant us to sales. for total As represent the previously catering one being Today, sales believe platforms incremental largest our opportunity about X% grow of system we with are sales

our travels, one of sales food mix the two believe can to catering our system reach well years. how Given we next X% within

programs the on program, chicken completed, Over the has customers our two new in a for the addition required later the to to materials in developing bone is This quarter. market our team we're our menu past and the catering largely revamping the offerings. more program roll of and work new hard now third including training out options development work at catering months, been that provides

rollout evaluating drive area managers catering testing to of also have program, we with further program. be use the third-party initial the are will determine the catering growing delivery impact can services catering the our partnerships of business. will After the they We on that

for $XX catering Pollo $XXX a local the time. about million become layer excited and the over believe very system are sales to El million it can of potential We

will resonate our progress In new over navigate with that the platforms on a several of the our consumers it new sales make long-term. panel easier menu consumers to addition items goals to includes new value add-on build platform, for our identify are and of The continue make and menu the menu an catering to menu. to board which of creation we test, menu to items, new potentially

sales next We're to excited this made delivering growing service. pleased out be and year. Ultimately, food revised more both the I about we with of these a the consistently menu progress roll comp couldn't depends operational company franchise improvements great across the year board and on and Along menu restaurants beginning expect lines, at restaurants. and

in and Drive-through to times, media improve scores customer at and the continued quarter complaints we social the have years. levels second best in seen

quality part across system. we the As to continued process completed Managers grilled with continue of a improving availability reiterate food efforts of ensure experience, consistency to chicken our the of customer and of each fire recently the and our importance recalibration General our

make continue In to simplifying progress addition, operations. our we

rolling We've sauce start equipment more and initiatives our these teams to operational and will our XX expect expanding We test with to to of allow further and continues drive serve number We positive other results. efficiencies customers. year, later believe to this out yield a of participating. the begun test new better our restaurants processing the franchisees system kiosk to

the operate. our servant-led which operate the to which culture to to With foundation support and familiar providing be regards to what continues we with leadership than greater in culture, company way we communities demonstrate better our

network goal a you with with banks. If to America of announced America partnership the local back we Feeding new in raise food a recall, $XXX,XXX for November, Feeding

serve. to through being with of charities June $XXX,XXX first of our XX, were thrilled XX% restaurants report raise the communities to food Pollo and we roundup as transactions. over XXX,XXX around to matching El XXXX, campaign, banks nations that limited our charitable organization time roundup of I'm our are of able these the restaurant our teams distributed

four franchising provide an me are and earnings call update Paso, in the Texas. and our Lastly, said, let unit XXXX, development franchise seen on three our we've In by New expansion. El That recent as for for Colorado, announced agreements our we efforts, restaurants restaurants. company-owned quarters, showcased to positive unit Northern two on guidance we reducing momentum our Mexico previous to

from our uncertainty existing Similar development development control industry, we on balance you've to franchisees ongoing delay and construction make during to year. agreements causing economic Discussions others potential to continue and continue in of and face permitting of the franchisees, our new delays expect to both plans. with well as heard new progress outside their further we the as what

we're over attract through continue to high-quality believe time being share to over cash and we El to drive we position expect executing initiatives second margins as Moreover, shareholders quarter in same-store Loco XX% will in franchisees our return drive closing, to increased program. to did sales, system Pollo new we against development. the repurchase restaurant the a In unit to

will half sales for ourselves the key back year, against to profit and strategies As of the continue to our growth. we we execute and position look

brand. day like to truly do partners franchise team El each pollo a special Loco our I'd once and again for they work the every thank members make to and Lastly,

results. the discussion turn to our more of me let quarter second that, With over a for financial Ira detailed call

Ira Fils

Larry, good everyone. afternoon, and Thanks,

$XXX.X compared to XXXX, in For the June ended $XXX.X million quarter XXXX. to total quarter million the of second decreased second XX, revenue X.X%

revenue by restaurant driven in offset decrease including last in restaurant increase million a to size, company-operated $XXX.X X.X% a in was same by primarily decrease The million X.X% transactions. X.X% sales, X.X% Company-operated period in year. $XXX.X the restaurant from company-operated decreased average sales in comparable decrease a check

price effective quarter, During versus approximately second increase the was XXXX our X.X%.

company-operated encouraged month, with mentioned July including restaurants XXth. July our a improved up comparable the with Larry are sales X.X%, sales earlier, in in for increase As we system-wide performance X.X% through

new to by franchise million to each decline sold second openings during the XXXX. $XX.X of X.X% Franchise subsequent or company eight restaurant second a by revenue restaurant offset case and four existing during was franchise quarter of the This X.X%. sales restaurants by partially comparable quarter, to driven franchisees in company-operated increased the

commodity and restaurant Turning Food XXX a costs. partially increased sales to due quarter points to X%. approximately by of to basis offset to prices, Commodity during as second the menu expenses. higher inflation year-over-year XX.X% decreased company paper moderate percentage did costs

inflation X% to We to expect and for XXXX. commodity decelerate X% between

was the lost a restaurant as increases of year-over-year company expenses increased higher pricing offset percentage related comparable The decline. menu and improved sales and to management leverage points wage rate Labor basis and XX.X%. XX on labor the by sales

about by the little insurance full-year expense and rent, and XX sales to and inflation other XXXX. X%, was increased operating offset points second quarter year-over-year higher during Occupancy a maintenance costs for utilities. company inflation primarily the a repair due we restaurant partially over as percentage expect Labor lower and expense, of XX.X%, to of X% basis

quarter year compared the was second contribution period. XX.X% the restaurant to margin ago in XX% for Our

For $XXX,XXX and XX.X% General costs increase restaurant the and points basis million in to to increased the during our $X.X revenue. margin expenses due total quarter in restructuring of costs. X.X% the The to expect second quarter for primarily XXX contribution the a be year-over-year administrative XX.X% in was full-year recognized XXXX, we labor-related range. to increase

$X.X for share in for the GAAP year share of share adjusted for provision $X.X or million second income taxes provision the rate net in quarter million recorded of of our measures. $X.XX the quarter million quarter, taxes to per income of a of refer last effective or period. This was GAAP in rate $X.XX diluted an period. to income the income of income share non-GAAP Please for tax year. We we or tax of reported second compared During release $X.XX effective million compared earnings of $X.XX per XX% diluted prior net $X.X per a to $X.X quarter net $X.X million in XX.X%. second reconciliation an of or the a year diluted million and Adjusted income to diluted net $X the compares per for prior

seven we franchise quarter, and remodeled restaurants the two During restaurants. company-operated

the XX year, franchised XX to company-operated restaurants. to XX and For remodel XX to continue to we expect

Turning to liquidity.

XX, XXXX, in debt of equivalents. million outstanding million $XX.X cash June $XX of we cash and had As and

million. quarter, during $XX.X In about shares X,XXX,XXX the repurchased we for addition, approximately

we to and of an to two company-owned franchise our XX G&A XXXX million like income the million, onetime of date, of of based rate XX to results XX opening remodeling XX.X%. would approximately spending capital costs $XX $XX million $XX expenses to company-owned XX.X% tax to restaurants; following adjusted restaurants $X.X three to The million, and inclusive $XX and restaurants, in between to on franchise Finally, of update and million to our provide guidance. four XX

to concludes This thank remarks. you for again We'd on prepared like call today. us the our joining

for We answer to questions. line the are any have. may now that questions you Operator, happy please open

Operator

Thank you.

will a session. now instructions]. conducting be [Operator question-and-answer We

Please question Todd Benchmark Our Company. first The Brooks comes from with proceed.

Todd Brooks

a Larry, looking kind it. tonight, on repositioning, you fire-grilled to shift let's and make that just question, say with core my from Is you focus want for to but working, the hear off menu of kind marketing brand of taking about every tone for recognized questions. there thinking with going the lead kind a fresh change being Thanks for that strategic you're forward strategy balance. of work here? a the of or comments made reflecting Appreciate in I I

Larry Roberts

Thanks, Todd.

step continue what opening to key me a really So, we're and want of number back are but and let I time without hit my like progression step now. me the back. sales operations. operations. said any the can't the business right having you focused opening I period great on comments, points in me, in my in a remarks, restaurant I is to to foremost, things over ultimately, profitability in And talk To about first and drive

where The fixed under got they we great from control. is, were We last operations, the thing year. cost company service

consistency food that Now in started by bar the operations, across system. it's doing quality retraining. on and the we really And around raising

as we hold quickly possible. accountable are to We around address monitor as issues food that complaints sure them people and making starting and

the really major quality on So bar and focused consistency is operations a food raising again, in focus.

be I'd say. thing would that first the really So,

the things. your question, more three really, see side, to I On marketing

of around drive It's and First all, our brand and chicken differentiation. refocus all freshness.

data insight consumers. that consumer us front those Our in are differentiate tells of us the really things

in and all digital geared the to product social so towards channels, content that and order have the on differentiation. do advertising driving be to that, campaign, your And the menu news

something some that on mean, to we be to talk driving So in business. now that's extent, going the but really really, about, we focused are I really

out type marketing got sales one, to got and it I channels, on we make get sales even into around system about, biggest to maybe done, number XX% to catering. is the addition In that opportunity, get of the being catering X%, you going guys talked that which big new a be there,

one We to is it's we stalled driver of the program last relaunched a need out which be real incremental And the the program, loyalty loyalty business. it. sales bit. get to a kind in the And

sales. figure out really need going that to we use incremental to we're So to how drive

say is around the really I Third, assets. would

freshness remodel if brand, a we queues, modernize have and to really As looking we're to push assets. really the our

on we've been we too got because doing to so out the that we've especially because the assets need many sure doing and there just even again, where continue perhaps won't newer us that that. people, step of and lose We And asset make come on base. customers that accelerate remodels don't to

XX%, have XX% margins business. the fourth guess as be we frankly, get back one and target economics, call quite I I'd that to will my the we and talked is to about in

And so we'll game plan and that game got against there, so to a we've plan. deliver get

would Next be around development.

to franchise going also doing, need ways We from the costs is efforts system sure then the of our franchisees find down. And to are we and work attract that to new we're we they get margin be to make to driven ourselves in development. economics. successfully. into building but the got to increase push improve We've that to Part open got

of lot work a So, going there. on

cash that continue completed to to through a just but real returning continue repurchase we dividend, the talked best and recently to the to And flow We've share is, one, cash shareholders. which program, our are special about we shareholders. briefly we'll generator, find ways return we cash to need a last done

just in satays sauces, that entree for business we to which restaurant are the back really have all was our down It guess, from around think us. promotion been chicken and So, I things items I know prepare we're on. around degrade focus, distraction your it those necessarily in break was year. the really areas food we to six the fresh. brand, to may to We're into, just Birria great, I it's get is last the do but how really, focused shift a the things not that we key the point the And that a

that need we And so, to just drive differentiation.

Todd Brooks

potential to hear. to guess And type there. laid in feels kind this to great level getting a you of your driven That's that lot of extracted you've a just Are internal one pillars because to follow-up business out the I but a restaurant Is to goal, -- the back volume-driven the unlock Hearing get in of What's Is on the that? efficiencies operations 'XX, back why recovery there out do that you market? potentially AUV 'XX. a of like that of already. mind? it

Larry Roberts

bit a on without sales. relying I'm it's to of But think deal I both. honestly, trying

add-on. sales will think I be the

at can So, where it's looking we efficiencies. find

Sousa looking equipment. we're new as at the processor So,

I the mean, I that's sales think an huge Kiosk, pushing tests. opportunity. those be on opportunity catering. then especially we're margin there is That to a drive could think And I line, improvements.

we X% point every think margins, we for XX in somewhere that range. a catering improvement I get sales, estimate in about basis

grow but to hey, also want So it's to saying, that got because not on we've of the doing we're just side. a it combination cost sales we sure both, make we're

Todd Brooks

great. Okay, Thanks queue. Larry. I'll in jump back

Operator

from question Our next with Jake comes Please proceed. Bartlett Truist.

Jake Bartlett

about difficult Great. business. last question momentum 'XX year was second year is my in question. Thanks a compare looking stack taking quarter, understand my of Birria kind I at four on And Larry, deceleration the versus there for but the the that sales. a in same-store the from

that? what So really might environment, you the the you is in driving positioned that? momentum I'm and business macro in Loco wondering trying the understand underlying speak And driving to think to what's that. But how is just

Larry Roberts

Yes.

of of So negative. day negative July strange week. a it we in that the the July was. four But XX, that actually mean, right lap That the business. of we're just mean was in Xth can't actually, And Jake, were was XX, of a a now, weekend. provided Xth little change I I think week was I week was first momentum remember I July so fell, seeing a look actually as which

been have better. years three so And the even then last

terms it, check. highlighted lower pullback I of think in last frequency seeing that again, in from we thought were at, some I I call when quarter, consumers look you

think us resonate with driver. I was And time I time from around away chicken and second around, on think itself Birria. that just So, the Birria hurt a focusing think second I the didn't actually getting

I think are those So some the of factors.

going now just in in and great don't L.A. say what I'm trends. trends the seeing side, is, I by led the climbing. I'd want watching far And hey, on in trends. too California. better is is out definitely being what's change to there are some the the terms encouraging Southern now to But really and sales everything we're And trend in is great seeing current business get sales of, keep

great also been driven, mainly much that's then And pretty see. has positive. lunch also the but So across to It's demographics. dinner consistency been been we're seeing different

So widespread. it you pretty L.A., driven, of which know that's our And seems again, California great to majority Southern where to see the be business is. is since

Jake Bartlett

That's need in innovation of means I value. more this and any you to see. don't be that meaningful tweaks improvement, the need And more menu you're effective environment? to I changes value the the the do make feel kind great of the in any side. changes get to to balance to premium in do positioned there's you think maybe given balance the you terms to guess how But guess, of But any you make there

Larry Roberts

first now scores very look Well, actually our that strong we overall. right value consumer our surveys, say via thing when I'll at they're

looking a panel. menu are we board are is value what perhaps we in doing However, is the at providing test

at very and incremental sales, that's the see then $X. right ones so those consumers. out best of consumers you and got to whether but and -- are screen, How around don't those want down, doing drive probably that lot to now, but see screening it's a with way is more we'll screen look get consumers various $X, do they at And test in options a margins we that with good it with do value, trade

So that. we at are looking

combos half or get to seems on really something would menu. a are attractive than be we $X next got really at We've that. the year have It all we at year. point. which value price either But would we our pretty that so resonate, to Other look And early of the back got try that to still our test bowls. we fire-grill way that,

are strong value I our right like with and scores So now consumers. said,

Jake Bartlett

and And has then restaurant margins, and question is my commodity level taken for quarter margins a last good just down. Great. inflation margins been your on

labor the think a to from I But inflation X%. think annual you for of your bit I midpoint X% at number. the say same little the guidance, to X%

moving I that, make difference. the there what wondering within a maybe pieces to is just So think are and pricing going

gave third the pricing with could So But menu past, And you if guidance be half the the quarter us to the the you in of what just indication add on some would for year? any or guidance guidance long helpful. this expect margins. share back in you to quarter, for for any be you've given to restaurant year the level current us question,

Ira Fils

Yes, Jake.

our they've So similar plans are what to pretty pricing been.

If X.X% in about you we think pricing. QX, about were effective

the the balance last of you'll end As as you towards decline year. the a roll forth took of we year, see through of price lot that

X.XX%, and be will So QX, we in about should about QX be X.X%.

as couple quarters And utilities. like see if typically the for spike see be you to similar little to of see part. margin better tend most our the you think as plays quarter, little you a quarter. than to the being typically, a full-year of With QX you kind out about QX for the year, last margin QX how the of year the balance lowest the number best of QX And kind and our margin as

that give play a to little out. just you plays So, how

good And been we think we were I pretty that's able guidance in rates regards well. bring and consistent have commodities, our to visibility about to wage really our down. as why feel the

margin sales upon So basis on of sale. or cost X% a is depending visibility how move as standpoint what then from talked about, any about XX and we Larry lot lot really so on any have moves, drives feel, we of points the a it's a differences

Jake Bartlett

it. you much. appreciate I so Thank Great.

Ira Fils

Thanks, Jake.

Operator

your question Jefferies. with next Andy comes question. Barish with from Our proceed Please

Andy Barish

of mean lapse. half It lineup. I else, from you stay you sounds to initiatives, remarks, back what I expect of there's like the Hey, in point? lot that some confidence Toms I the kind tougher year, sort but know of against the assume But good positive coming gives at prepared the this afternoon is guys. promotional a that is there anything confidence from of even

Larry Roberts

Andy. Yes,

sales I half So see as driver back growth the the the year. of in key

First performed and up and our very last KCDs next of year. getting the chicken well we Chop think, KCD then and all, I on refocusing back sales, have has

on got So we've coming up promotions next. and going good that gives us now confidence that

why El and that I around continue points in focus see coming opportunities back groups customer which one you did And expect to And focus we'll groups a last we week, experience these for asked watched it comes them, and service. around, stop last improvement It big around and to they've and or Pollo I that. is, El did go the at of price Pollo this like Loco? Loco. last is from while, was wasn't their think operations I with lapsed anything users

And main so, improvements year. restaurants really of last the be in with make, and users continuing we improvements the the targeting half the will we'll operations back into back bring to

to loyalty the changes will to that. think continue I do make program

sales channels one is then think to look around at of going to be I September. that we'll driver. the to the focused the of half those that which end realignment a be So driver. catering, the deliver continue strongest roll fine-tune that spend of year, media will talked a out be on first think last I to really get I And the And the the will versus about

catering strong into be it's driver. a the fourth a moved having platform, the think, going will quarter. I So Terms sales really to holidays,

the drive the sales we've to of in the got back things on So, half a good year. number agenda I the of think

Andy Barish

And a the follow-up on just marketing.

the group a you've be but out think agency timing the new of I record. started to I'm there exactly, from yet? not has got that recalling creative

Larry Roberts

Yes.

group started. So that

but throwing there quickly, I kind of February, something was, two, so module The first run was our put guess, quickly. together that

advertising, So full and force blown with got of advertising new now organic we're more full the the the pleased it's really the in is. energy seeing now the terms what mean and music. and feel fully are with it on we here it agency, with look wasn't they agency the is have the I But names in

CHOP But We're now on done really food for chicken before. has sales prepared. the focusing the example, We've chopped. being show that

we and doing the family that, in families need really advertising make those really and whole so And it. sure promotion, reshot things the then okay, dinner we

So in you're we've targeting because got there mom. families now

energy first a look modern and and and drive, the feel, vibe, product we of I and I of brand want have we've really more the slightly a there the also to So call think ingredients in right energy, to food the lot the behind the coming the quality in that got of than advertising. brand all, more through freshness the the are really

Andy Barish

of units evaporated out into at Or kind how XX there? of And these company both been of year? with kind now of finally, to this units of moving you that from open do some and next just have XX-or-so it. challenges Got 'XX it pushed look the or start then 'XX? Are kind in Is right franchise to some think from to expected year. those those

Larry Roberts

the I'd development moving moving somewhere and deal. the through. Either a year. next fallen for are has year have with half half different around next just went landlord Some say probably about into are stopped

it's at stage. say and I'd half this So half

Andy Barish

guys. thanks Okay,

Operator

[Operator Instructions].

with Baird. question. Please North Jen your from comes question with next proceed Our

Jen North

perhaps taking you what's margins on XXXX reads question. on inflation basket have locked or of I'll inflation the Thanks on the And the balance mine asked been A the XXXX? just Great. for follow number how commodity already, visibility much of Or is up level see outlook levels update chicken opportunity outlook. for but at efforts to paid looking rates to Can the your in to contracting to any this XXXX? of earlier the below do XXXX, point? for at you your lock in out us

Ira Fils

outlook on our pressure we don't the a we lot seen view started, more just of -- think haven't the have broadly, year process. RFP we We regard chicken frankly, next positive I quite side. just given, specifically in

commodities we definitely inflation -- have more a seen we've in think environment. much we are feel we'll decelerate that substantially this I XXXX moderate next year, and So be commodity on quarter. But more the for that looking to

Really, which side. or around not the a just think the I the meat, what's year, in breast For locked on of have XX-plus half we're and we chicken percent the collar floats, that. so is back blocked on

favorable, we're spot have from of has to we like the where on price headed again, So do very been feel a visibility quite that a and standpoint. bit we commodity

Jen North

That's got in one as that additional or September pricing menu on earlier out? to rolls Ira, as call changes the assuming metrics contemplating no QX, in QX, new you as we mentioned was got helpful. to And pricing the we clarification, price the

Ira Fils

It time. a out when built September rolls increase is. price menu There's new into the that in X% the

Jen North

And Perfect. then more one from me.

if update details Just thought to past I'd was locations to I to chance know rollout, kiosk share. the you the it on have this additional give you quarter. expanded any

still early, of test, a with guess, but to So have more and successful of I rollout brands the other the kiosk. getting critical been it's mass

So at the could the you're you're on or been at to seeing perhaps point? benefits the share, to from this check out rolled this willing have point and margins units the if in you speak maybe franchisees interest level where kiosks

Larry Roberts

for to transactions, those and the when room coming I'll restaurants to in use either company eating machines, that Sure. A our and we call little was so put the drive to have ordering from, said, seeing now it's In in or anywhere ability we to to meaning more it restaurants. in in go. it what That dining XX some detail includes franchise important really on dining test found cash restaurants, kiosk usage, we it, cash kiosks have new service. room in, pay we're is I I so have, believe, kiosk somebody

XXs, usage anywhere the to seeing be will increase. but XX% and lows even kiosk XX% from restaurants, seeing though we're in the We're

up start We're lifts. we're seeing hours. is can usage, when And to check of really seeing other plus XX% getting good looking we're the start you terms so at in seeing usage on And labor kiosks. thing overall, the average you nice

are out pulling we So, hours those that usage some high restaurants have labor of a rate.

And Vegas. in so there's the we because side. I've why Vegas now chosen XX in ability company more are given the rolling Vegas. be kiosks They'll And there, Las reason in Las no on the is success out Las EBT

California. in EBT a of EBT So into integrate the And usage even go here as usage lot in will the we because we California, kiosk we think get system. further sales

they But don't have Vegas, EBT.

already Vegas. think service. basically we're see restaurants so, does. of going I kiosk And a in And very We're couple usage it's a And that where seeing we're test high in restaurant what fact, to in just there.

trying what concepts done. I a the really other check we're doing. similar restaurant. there's I in ability big on there they're kiosks, to what the see drive And the labor reduce hours So push think have and both to envelope to

Jen North

the all on. for it color. Thanks I'll pass

Larry Roberts

Sure.

Operator

Truist. Our comes question. next from your proceed Jake with with Bartlett Please question

Jake Bartlett

Thanks. Great.

question just sure about right. a is to make I this So getting detailed but compares, it want fairly I

was relative That weak quarter. So quarter, up where opposite strongest. July going last against relatively July was of the was to the XXXX the third

So, last the year might have been just before. related year to

Or So not. the difficult you where kind forward? going more the and think pre-COVID kind it's can question do as is, sales of the land, quarter X-year a about rest maybe basis, a as the on of stack we view basis compares of versus

August in to fact So want sure to get I considerably harder compares by carried the I don't make too just seem in September. that get away

Larry Roberts

Yes, Jake.

we're same time especially L.A., L.A. period restaurants, X%. give we're again, at company frame, point, it, three actually, this and actually, the at positive was looking In of X.X%. weeks And in about close were at, last And time week just So over Xth July the we the year-over-year. is up last year then way looked that throughout this you XXXX I'll to mean plus. up say, I I

lapping. I Xth July So and do think the we're I throw of actually when numbers are negative the away think don't weekend you compares.

as momentum good enough like challenging. through And last the so move there's more getting that feel we quarter, I that

we'll I I one think of out there far reason our We several in skis. especially to deliver So deliver. L.A. still but too of why weeks been don't got But that's reassuring, terms I still over same-store to just the probably we're sales last growth, front think able positive be have certainly, trends in get think the the

California Southern market.

Jake Bartlett

yes, so Great. that's I That's helpful. think it. Thank it. appreciate you And much,

Operator

the over and call Ladies question-and-answer Roberts remarks. Larry back to Mr. now to turn session. reached we of I have gentlemen, the today's closing for like end would

Larry Roberts

hope like we'll to and to next the you everybody Thank have you. tonight, a just night, and great thank for I'd I call talk quarter. joining you

Operator

today's concludes This teleconference.

Thank disconnect participation. may time. at for your lines this your you You

El Pollo Loco (LOCO) 3 Aug 232023 Q2 Earnings call transcript