El Pollo Loco’s results for Q2 were met with a positive market reaction, reflecting the company’s operational and strategic advancements. Management attributed the quarter’s performance to the success of recent menu innovations, such as Loco Tenders and loaded quesadillas, combined with the effectiveness of targeted digital promotions and loyalty programs. CEO Elizabeth Goodwin Williams highlighted that these initiatives attracted new, younger guests while driving increased check sizes and off-peak sales. The company also saw continued improvement in guest satisfaction metrics, with operational enhancements contributing to healthy restaurant-level margins despite ongoing produce cost inflation.
Is now the time to buy LOCO? Find out in our full research report (it’s free for active Edge members).
El Pollo Loco (LOCO) Q2 CY2026 Highlights:
- Revenue: $129.6 million vs analyst estimates of $130.3 million (3% year-on-year growth, 0.5% miss)
- Adjusted EPS: $0.30 vs analyst estimates of $0.28 (7.8% beat)
- Adjusted EBITDA: $19.11 million vs analyst estimates of $18.52 million (14.7% margin, 3.2% beat)
- Operating Margin: 14.4%, up from 9% in the same quarter last year
- Locations: 511 at quarter end, up from 499 in the same quarter last year
- Same-Store Sales rose 3.9% year on year (-0.3% in the same quarter last year)
- Market Capitalization: $462.6 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From El Pollo Loco’s Q2 Earnings Call
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Todd Brooks (Benchmark) asked about the strength and performance of new markets outside California. CEO Elizabeth Goodwin Williams responded that new openings, particularly in Idaho and Washington, are exceeding system averages and boosting franchisee confidence.
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Brooks (Benchmark) followed up regarding national expansion and franchisee interest. Williams stated that interest is now nationwide, with possible non-contiguous expansion depending on ongoing franchise partner discussions.
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Brooks (Benchmark) inquired about criteria for selecting franchise partners in new markets. Williams explained that the company prioritizes experienced multi-unit operators with a strong cultural fit and enthusiasm for the brand.
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Matthew Curtis (D.A. Davidson) asked about drivers of July’s comp acceleration and the outlook for Q3 comps. Williams attributed the boost to successful product launches, digital engagement, and media presence during the World Cup, while CFO Ira Fils noted Q3 guidance reflects more normalized trends.
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Jeremy Hamblin (Craig Hallum) questioned the impact of produce cost inflation on margins and capital expenditure timing. Fils detailed that produce accounted for most of the COGS pressure but noted improvement, and explained that lower CapEx is primarily due to timing shifts in the remodel program.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the performance of new menu items and their ability to drive incremental sales, (2) the pace and profitability of franchise expansion in new, non-contiguous markets, and (3) continued progress in digital engagement and loyalty program growth. Successful execution in these areas will be key to sustaining momentum amid ongoing cost pressures.
El Pollo Loco currently trades at $15.21, down from $16.37 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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