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El Pollo Loco (LOCO) Opens Another Outlet in California
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The leading fire-grilled chicken chain of the U.S., El Pollo Loco Holdings, Inc. (LOCO - Free Report) , opened its latest outlet in Watsonville, CA, on Dec 28, 2016. The 2,798 square feet restaurant is located at 1401 N. Main St. and can accommodate 120 guests.
The outlet features the brand’s hacienda design and has an open kitchen layout to display the preparation of its signature dish. Owned and operated by franchise partner WKS Restaurant Group, it marks the first outlet for El Pollo Loco in Watsonville and the 64th for the brand’s largest franchisee.
The unit will also offer El Pollo Loco’s enhanced online and mobile ordering capabilities. Guests can order and pay via El Pollo Loco’s mobile app or website and thereby evade waiting in queue.
El Pollo Loco currently has more than 450 company-owned and franchised restaurants in Arizona, California, Nevada, Texas and Utah. Also, it is looking to expand its presence in key markets like Houston and Dallas. The company has opened more than 25 restaurants year to date with another four to open in the coming weeks.
However, El Pollo Loco loses out in terms of international presence. While other restaurateurs like Yum! Brands, Inc. (YUM - Free Report) , McDonalds Corporation (MCD - Free Report) and Papa John’s International, Inc. (PZZA - Free Report) pursue aggressive global expansion policies, it seems to be weak on this front.
On the other hand, the company joined the S&P 600 Small Cap Index after the close of trading on Sep 12. We believe its addition to one of the most widely followed small-cap benchmarks is a key positive for the company.
Going forward, the company expects to boost traffic on the back of increased focus on catering to health-conscious customers by offering customized meals without compromising on flavors. Interestingly, menu innovation and limited time offers have also been contributing to traffic. In fact, the third quarter of 2016 marked the 21st consecutive quarter of positive comps for the company, and this trend is expected to continue due to various sales and digital initiatives being undertaken.
However, a challenging sales environment and lower consumer spending in the U.S. restaurant space remain headwinds for this Zacks Rank #4 (Sell) company’s top line.
Also, shares of the company have underperformed the Zacks categorized Retail–Restaurants industry year to date. While the industry gained 1.4%, El Pollo Loco declined 0.2% in the same time frame.
Nevertheless, we are hopeful based on the rapid expansion initiatives being undertaken by the company.
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El Pollo Loco (LOCO) Opens Another Outlet in California
The leading fire-grilled chicken chain of the U.S., El Pollo Loco Holdings, Inc. (LOCO - Free Report) , opened its latest outlet in Watsonville, CA, on Dec 28, 2016. The 2,798 square feet restaurant is located at 1401 N. Main St. and can accommodate 120 guests.
The outlet features the brand’s hacienda design and has an open kitchen layout to display the preparation of its signature dish. Owned and operated by franchise partner WKS Restaurant Group, it marks the first outlet for El Pollo Loco in Watsonville and the 64th for the brand’s largest franchisee.
The unit will also offer El Pollo Loco’s enhanced online and mobile ordering capabilities. Guests can order and pay via El Pollo Loco’s mobile app or website and thereby evade waiting in queue.
El Pollo Loco currently has more than 450 company-owned and franchised restaurants in Arizona, California, Nevada, Texas and Utah. Also, it is looking to expand its presence in key markets like Houston and Dallas. The company has opened more than 25 restaurants year to date with another four to open in the coming weeks.
However, El Pollo Loco loses out in terms of international presence. While other restaurateurs like Yum! Brands, Inc. (YUM - Free Report) , McDonalds Corporation (MCD - Free Report) and Papa John’s International, Inc. (PZZA - Free Report) pursue aggressive global expansion policies, it seems to be weak on this front.
On the other hand, the company joined the S&P 600 Small Cap Index after the close of trading on Sep 12. We believe its addition to one of the most widely followed small-cap benchmarks is a key positive for the company.
Going forward, the company expects to boost traffic on the back of increased focus on catering to health-conscious customers by offering customized meals without compromising on flavors. Interestingly, menu innovation and limited time offers have also been contributing to traffic. In fact, the third quarter of 2016 marked the 21st consecutive quarter of positive comps for the company, and this trend is expected to continue due to various sales and digital initiatives being undertaken.
However, a challenging sales environment and lower consumer spending in the U.S. restaurant space remain headwinds for this Zacks Rank #4 (Sell) company’s top line.
Also, shares of the company have underperformed the Zacks categorized Retail–Restaurants industry year to date. While the industry gained 1.4%, El Pollo Loco declined 0.2% in the same time frame.
Nevertheless, we are hopeful based on the rapid expansion initiatives being undertaken by the company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>