LOCO - El Pollo Loco stock slumps as comparable sales come up short
2023-03-10 15:11:48 ET
El Pollo Loco ( NASDAQ: LOCO ) shares slid over 7% on Friday after the company fell short of consensus expectations on a few key metrics.
The California-based restaurant operator narrowly beat top and bottom line expectations on Thursday evening. However, while system-wide comparable restaurant sales increased 4.7% year over year, that figure came up just over 1% short of analyst estimates.
Additionally, management noted that “unfavorable weather is proving to be a headwind in early 2023” for the chain. Additionally, capital expenditures are expected to run hot into the coming year.
“LOCO signaled a soft start to Q1 (comps running below prior estimates amid some weather disruptions) and guided some expense lines above our prior model assumptions, prompting a reduction to our 2023-2024E EPS estimates,” Baird analyst David Tarantino wrote in a review of the results. “While cautiously optimistic about LOCO's internal sales-driving initiatives, we remain somewhat concerned about the macroeconomic backdrop, and as a result, we still consider the risk/reward on LOCO balanced.”
He retained a Neutral rating on the stock, though he raised his price target $1 to $11. Shares of El Pollo Loco nonetheless plunged about 7% in afternoon trading on Friday.
Read the earnings call transcript .
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El Pollo Loco stock slumps as comparable sales come up short