Fast food chain El Pollo Loco (NASDAQ: LOCO) missed Wall Street’s revenue expectations in Q2 CY2026 as sales rose 3% year on year to $129.6 million. Its non-GAAP profit of $0.30 per share was 7.8% above analysts’ consensus estimates.
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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: $517.4 million
Company Overview
With a name that translates into ‘The Crazy Chicken’, El Pollo Loco (NASDAQ: LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $500.8 million in revenue over the past 12 months, El Pollo Loco is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.
As you can see below, El Pollo Loco’s 1.8% annualized revenue growth over the last seven years was weak as it barely increased sales at existing, established dining locations.
This quarter, El Pollo Loco’s revenue grew by 3% year on year to $129.6 million, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 1.8% over the next 12 months, similar to its seven-year rate. This projection is underwhelming and implies its newer menu offerings will not accelerate its top-line performance yet.
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Restaurant Performance
Number of Restaurants
El Pollo Loco sported 511 locations in the latest quarter. Over the last two years, it has generally opened new restaurants, averaging 1% annual growth. This was faster than the broader restaurant sector.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
A company’s restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.
El Pollo Loco’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.7% per year. This performance suggests it should consider improving its foot traffic and efficiency before expanding its restaurant base.
In the latest quarter, El Pollo Loco’s same-store sales rose 3.9% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from El Pollo Loco’s Q2 Results
It was encouraging to see El Pollo Loco beat analysts’ EBITDA expectations this quarter. We were also happy its same-store sales was in line with Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock traded up 2% to $16.71 immediately after reporting.
Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
