El Pollo Loco (NASDAQ: LOCO) reported Q4 EPS of $0.16, $0.02 better than the analyst estimate of $0.14. Revenue for the quarter came in at $101.1 million versus the consensus estimate of $104.4 million.

• Total revenue, excluding franchise advertising fee revenue, increased 6.2% to $101.1 million compared to $95.2 million in the same period of 2017. Including $5.2 million of franchise advertising fee revenue related to franchise advertising fund contributions, required as part of new accounting guidance implementation, total revenue increased 11.6% to $106.3 million.
• System-wide comparable restaurant sales increased 4.4%, including a 3.7% increase for company-operated restaurants, and a 5.1% increase for franchised restaurants.
• Net loss was $23.4 million or $0.60 per diluted share, compared to net loss of $38,000 in the prior year. Fourth quarter of 2018 included a $36.3 million pre-tax expense related to the legal settlements of multiple class action lawsuits.
• Pro forma net income(1) was $6.1 million, or $0.16 per diluted share, compared to pro forma net income of $4.4 million, or $0.11 per diluted share.
• Adjusted EBITDA(1) was $14.5 million, compared to $13.4 million in the same period of 2017.

Bernard Acoca, President and Chief Executive Officer of El Pollo Loco Holdings, Inc., stated, “We ended 2018 with strong operating momentum, with fourth quarter results that included a 4.4% system-wide increase in comparable restaurant sales, which was our best performance since the first quarter of 2015, and included transaction growth of 2.3%. On a two year basis, system-wide comparable restaurant sales increased by 5.8%, which was the best performance since the first quarter of 2016. Our restaurant teams also delivered strong restaurant operating profit margin of 18.7%, and pro forma EPS of $0.16, up 45% over last year. We believe these results are evidence that the initiatives we launched during 2018 as part of our Transformation Agenda are gaining traction and driving results.”

Acoca added, “Also, we recently reached agreements to settle several long-standing legal issues, which help enable us to fully focus on furthering our long-term strategies, which are to invest in and develop our teams, streamline our operations, build upon our numerous brand strengths, and grow the business. While we have made tangible progress during the past year, we believe many opportunities remain to drive the El Pollo Loco brand forward.”

GUIDANCE:

El Pollo Loco sees FY2019 EPS of $0.70-$0.75, versus the consensus of $0.80.

• System-wide comparable restaurant sales growth of approximately 2.0% to 4.0%;
• The opening of 3-4 new company-owned restaurants and 3-5 new franchised restaurants;
• Restaurant contribution margin of 18.2% to 18.9%;
• G&A expenses of between 8.4% and 8.6% of total revenue excluding legal fees related to securities related litigation;
• Pro forma income tax rate of 26.5%; and
• Adjusted EBITDA of between $62.0 and $65.0 million.

For earnings history and earnings-related data on El Pollo Loco (LOCO) click here.