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What's in Store for El Pollo Loco (LOCO) in Q3 Earnings?
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El Pollo Loco Holdings, Inc. (LOCO - Free Report) is scheduled to report third-quarter 2016 numbers on Nov 3, after the market closes.
Last quarter, El Pollo Loco posted a 5.56% positive earnings surprise. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 8.85%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
El Pollo Loco posted positive comps for 20 consecutive quarters on the back of various value, operational and service initiatives. We expect the trend to continue in the to-be-reported quarter’s as well.
Notably, this fire-roasted chicken specialist’s fresh handcrafted Mexican inspired cuisine has been driving its popularity and ensuring a steady rise in traffic. Moreover, menu innovation and limited time offers have been contributing to traffic growth and should have continued doing so in the third quarter.
The company has also been added to the S&P 600 Small Cap Index after the close of trading on Sep 12, 2016. We believe El Pollo Loco's addition to one of the most widely followed small-cap benchmarks will prove to be a key positive for the company.
However, increasing labor costs as well as pre-opening costs of outlets and expenses related to sales initiatives might dent the quarter’s profits. Moreover, a challenging sales environment in the overall restaurant space is likely to keep the top-line under pressure.
Our proven model does not conclusively show that El Pollo Loco is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: El Pollo Loco has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 19 cents.
Zacks Rank: El Pollo Loco has a Zacks Rank #3. This when combined with a 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +15.38% and a Zacks Rank #3.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3.
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What's in Store for El Pollo Loco (LOCO) in Q3 Earnings?
El Pollo Loco Holdings, Inc. (LOCO - Free Report) is scheduled to report third-quarter 2016 numbers on Nov 3, after the market closes.
Last quarter, El Pollo Loco posted a 5.56% positive earnings surprise. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 8.85%.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
El Pollo Loco posted positive comps for 20 consecutive quarters on the back of various value, operational and service initiatives. We expect the trend to continue in the to-be-reported quarter’s as well.
Notably, this fire-roasted chicken specialist’s fresh handcrafted Mexican inspired cuisine has been driving its popularity and ensuring a steady rise in traffic. Moreover, menu innovation and limited time offers have been contributing to traffic growth and should have continued doing so in the third quarter.
The company has also been added to the S&P 600 Small Cap Index after the close of trading on Sep 12, 2016. We believe El Pollo Loco's addition to one of the most widely followed small-cap benchmarks will prove to be a key positive for the company.
However, increasing labor costs as well as pre-opening costs of outlets and expenses related to sales initiatives might dent the quarter’s profits. Moreover, a challenging sales environment in the overall restaurant space is likely to keep the top-line under pressure.
EL POLLO LOCO Price and EPS Surprise
EL POLLO LOCO Price and EPS Surprise | EL POLLO LOCO Quote
Earnings Whispers
Our proven model does not conclusively show that El Pollo Loco is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks ESP: El Pollo Loco has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 19 cents.
Zacks Rank: El Pollo Loco has a Zacks Rank #3. This when combined with a 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Vail Resorts, Inc. (MTN - Free Report) has an Earnings ESP of +4.46% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +15.38% and a Zacks Rank #3.
Marriott International, Inc. (MAR - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>