El Pollo Loco Holdings Inc (NASDAQ:LOCO) Strong Quarterly Returns Play Up Detractors

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Dallas, Texas 09/05/2014 (FINANCIALSTRENDS) – El Pollo LoCo Holdings Inc (NASDAQ:LOCO) the restaurant chain reported  strong financial performance on September 4. The shares of the food-chain operator saw an increase to the tune of 5%, as the revenue and earnings posted for the quarter were higher than expectations.

The revenue of $86.90 million was higher than its same quarter revenue last year, which then was at $81.73.

El Pollo LoCo Holdings Inc(NASDAQ:LOCO) earnings report highlight however, were the change in sales figures. The continued surge in sales over past year to year comparable store sales made the difference. Fortunately, for the company, this quarter the sales were to the tune of 5.4% higher on a year-to-year basis.

Further, the company also noted a 5.9% improvement in the franchise locations. Other developments which has now led to the substantial sales growth has been the 5.0% increase in stores owned by El Pollo LoCo Holdings Inc(NASDAQ:LOCO) itself.

As an explanation of the increase in earnings this quarter, the management shared that, the EPS rise to $0.21 was largely due to the increase in profits.

This in turn was driven by the lowering of the interest expenses which were at 12% of the sales as against the 6.6% in the financial juggling the company has since engaged in. The company reiterated that the repayment was due to the overall long-term debt, which would now be countered by the IP O funds raised in the first half of 2014.

The one-big issue for LOCO remains the prices and the debt it owes. Management’s commitment to pay of these dues will remain the focus until their execution. Additionally, LOCO is expected to be under marginal to increased pressure as it reworks its franchises as well as relooks its own stores refurbishing and more.