El Pollo Loco: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Nov. 5, 2026, El Pollo Loco (NASDAQ:LOCO) announced that systemwide same-store sales -- sales at restaurants open at least a year -- grew 5% year over year. The restaurant operator is expanding its digital loyalty network while securing multi-unit development deals outside its core West Coast footprint. Three things management said stand out.

1. Geographic Expansion Targets New State Markets

El Pollo Loco is accelerating restaurant openings, using experienced franchise operators to establish footholds in markets such as New York. Management expects second-generation site conversions--rebuilding existing restaurant properties--to reduce construction costs as national expansion gains speed.

In September, we announced our planned entry into New York, a big step in becoming a national brand.
-- Elizabeth Williams, Chief Executive Officer

2. Digital Loyalty Drives Repeat Customer Traffic

Digital orders reached 31% of total sales during the quarter. The company relies on its Loco Rewards loyalty program to increase order frequency and lock in repeat customer visits during tight spending cycles.

Our Loco Rewards members continue to be our most engaged guests visiting twice as often as nonmembers each year.
-- Elizabeth Williams, Chief Executive Officer

3. Operational Discipline Holds Restaurant Margins Steady

Restaurant contribution margin -- the percentage of restaurant sales remaining after direct store operating costs -- landed inside target ranges. Management balances targeted promotional deals against wage costs to protect store-level profitability.

Restaurant level margin was 18.4% this quarter, within our long-term target range of 18% to 20%.
-- Elizabeth Williams, Chief Executive Officer

Looking Ahead

Franchise demand is expanding beyond the West Coast, and management shows clear confidence in regional growth. The company relies on lower-cost site conversions and digital order growth while management monitors pricing discipline.

With New York on the map and more partners lining up, we're taking the brand into new parts of the country with confidence.
-- Elizabeth Williams, Chief Executive Officer

Operational execution will stay essential for driving recurring customer visits.

Our delicious food brings guests into our restaurants, but accuracy, speed and value are the basics that bring guests back and consistent execution in the restaurant turns a first visit into a recurring one.
-- Elizabeth Williams, Chief Executive Officer

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