El Pollo LoCo Holdings Inc (NASDAQ:LOCO)’s second quarter comparable sales missed consensus forecast as the number of customers visiting its outlets dropped for the first time since the restaurant chain operator went public in 2014.
The company, famous for its fire-grilled chicken, is facing difficulties to entice consumers despite adding new items like shrimp and beef. LOCO shares have declined 22 percent since its remarkable debut last year in July.
El Pollo LoCo blamed higher costs for its value menu offerings for the drop in traffic. Chief Executive officer Steve Sather said that the company raised prices on its value menu and particularly on complete entree line that really affected its value customer.
The company announced that its restaurants saw a decline of 3.9 percent in customer traffic for the latest quarter ended July 1, which marks the first drop since it began reporting numbers as a public firm. Previously, LOCO had announced traffic growth of 0.1 percent, its slowest pace, for the first quarter.
Food expenses also jumped, especially due to the addition of carne asada, a grilled beef steak, and shrimp-based dishes in the menu.
Comparable restaurant sales surged 1.3 percent for the quarter that fell short of 3.5 percent gain estimated by analysts surveyed by Consensus Metrix.
El Pollo Loco slashed its system-wide same-restaurant revenue for the full year to a growth of 3 percent, below a range of 3 percent to 5 percent it previously forecasted.
The company reported net income of $7.2 million for the quarter, as compared to $7.2 million one year ago. Adjusted profit was 19 cents a share that surpassed 18 cent per share estimated by analysts surveyed by Thomson Reuters I/B/E/S. Revenue for the quarter came in at $89.5 million, up 3 percent from the same period last year. Analysts were looking for $93 million in revenue.
