El Pollo Loco says Q2 is off to a strong start thanks to Shredded Beef Birria

El Pollo Loco Holdings Inc. reported first-quarter sales that exceeded expectations and says the second quarter has started strong thanks to a time-limited Shredded Beef Birria menu item.

The gastronomic trend of El Pollo Loco is the ground beef served in tacos, quesadillas and burritos with consommé sauce, french fries and salsa.

“The Shredded Beef Birria product mix reached 12.5%, which helped drive new sales records for companies, franchises and systems three weeks in a row during March and April,” said Laurance Roberts, executive director and interim financial director of El Pollo Loco LOCO.
on Wednesday’s late earnings call.

“Beef Birria ‘s sales combination remained above 10% for six consecutive weeks and, as a result of our success, we are testing the use of the ground beef product for future LTOs. [limited-time offers] to further diversify our offerings while staying true to our position at LA Mex. “

Meanwhile, the company will offer toasts, which Roberts said was the “strongest time-limited bid promotion last year” for the company.

The Beef Birria offer coincided with the launch of new marketing strategies that relied heavily on social media, with a hashtag and a Tik Tok campaign that garnered millions of views.

“We expect sales in the same stores to slow down from April levels, but remain strong, driven by improved social media-focused marketing, a strong schedule of limited-time deals (Toast in June and another meat product in November), improved operations in the company’s stores (operations identified as the main reason why in-store sales are lagging behind franchisees), including a drive-thru initiative that begins
May 6 and continued digital penetration, “Truist Securities said in a statement.

Truist values ​​El Pollo Loco shares at a target price of $ 15, below $ 16.

Pollo Loco posted first-quarter net income of $ 2.1 million, or 6 cents a share, down from $ 4.0 million, or 11 cents a share, last year. The adjusted 7-cent EPA was in line with the FactSet consensus. Revenue of $ 110.0 million increased by $ 107.7 million and was above the FactSet consensus of $ 106.7 million.

Shares of El Pollo Loco have fallen 24% to date.

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Chipotle Mexican Grill Inc. CMG has also been successful with limited-time protein offerings, such as roast meat and roast chicken, which the company said was “the most popular new protein to date.” The next one will try the garlic guajillo fillet.

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