0001606366-26-000017
SEC filingEl Pollo Loco Holdings, Inc. reported total revenue of $490.0 million for fiscal year 2025, representing a 3.6% increase from the prior year. Net income was $26.5 million, up 3.1% year-over-year, with operating income of $42.0 million. Revenue growth was driven by a 2.4% increase in company-operated restaurant revenue to $405.8 million and a 15.0% increase in franchise revenue to $52.4 million. The company maintained 503 locations across nine states, opening one company-operated and eight franchised restaurants during the year. System-wide comparable restaurant sales increased 0.1%, with company-operated comparable sales up 0.3% and franchise-operated sales flat. Operating cash flow was strong at $48.1 million, supporting capital expenditures of $22.6 million. The company ended the year with $20.5 million in cash and cash equivalents and total debt of $51.0 million under its revolver loan.
El Pollo Loco Holdings, Inc. reported solid financial results for fiscal year 2025 with total revenue of $490.0 million, representing a 3.6% increase from $473.0 million in fiscal 2024. Net income grew 3.1% to $26.5 million from $25.7 million in the prior year. Operating income increased 2.1% to $42.0 million. The company's performance was supported by a 53-week fiscal year in 2025 compared to 52 weeks in 2024, which contributed approximately $5.3 million to company-operated restaurant revenue. System-wide comparable restaurant sales increased 0.1%, with company-operated comparable sales up 0.3% and franchise-operated comparable sales flat. The company maintained 503 locations across nine states, opening one company-operated restaurant and eight franchised restaurants during the year.
Revenue growth was driven by three primary sources. Company-operated restaurant revenue increased 2.4% to $405.8 million, representing 82.8% of total revenue. This growth was primarily due to the additional week of operations in the 53-week fiscal year, new restaurant openings, and a 0.3% increase in comparable sales. Franchise revenue grew 15.0% to $52.4 million (10.7% of total revenue), driven by $4.1 million in franchisee IT pass-through revenue related to the new POS system rollout, royalty rate adjustments, and increased franchisee fees. Franchise advertising fee revenue increased 2.1% to $31.8 million (6.5% of total revenue), reflecting higher franchise revenue as advertising fees are calculated as a percentage of franchisees' sales.
Operating margin was 8.6% for fiscal 2025, slightly down from 8.7% in the prior year. Company restaurant expenses as a percentage of company-operated restaurant revenue improved to 82.2% from 82.6% in fiscal 2024. Food and paper costs decreased to 24.7% of company-operated restaurant revenue from 25.4% in the prior year, driven by cost management initiatives and slight commodity deflation. Labor and related expenses improved to 31.4% from 32.1% despite higher wage rates due to California minimum wage increases, offset by improved labor efficiencies. General and administrative expenses increased to 10.3% of total revenue from 9.8%, primarily due to higher legal and professional fees related to shareholder activism and increased stock-based compensation.
The company generated strong operating cash flow of $48.1 million, up from $44.8 million in the prior year. Free cash flow (operating cash flow minus capital expenditures) was $25.5 million. Capital expenditures totaled $22.6 million for property and equipment purchases. The company ended the year with $20.5 million in cash and cash equivalents, up from $16.8 million at the beginning of the period. Total assets were $606.6 million, including $248.7 million in goodwill and $61.9 million in trademarks. Total liabilities were $315.6 million, including $51.0 million in revolver loan debt and $188.4 million in operating lease obligations. Stockholders' equity was $291.1 million.
For fiscal 2026, the company plans to open three to four new company-operated restaurants in California and Texas, and franchisees intend to open 15 to 16 new restaurants. The company plans to complete 25 to 35 company-operated restaurant remodels and 30 to 40 franchise remodels, with average remodel costs of approximately $0.4 million per restaurant. The company's growth strategy focuses on five key pillars: Brand That Wins, Hospitality Mindset, Digital First, Winning Unit Economics, and Drive Unit Growth Again with National Expansion. Key risks include vulnerability to changes in political and economic conditions, trade policies, tariff regulations, and consumer preferences. The company continues to focus on increasing customer frequency, attracting new customers, and improving per-person spend to drive comparable restaurant sales growth.