Irvine-based Mexican fast-food operator El Pollo Loco Inc. said last week it narrowed its fourth-quarter loss.
The company lost $1.2 million in the quarter, down from $15.4 million a year earlier, a figure that includes costs related to El Pollo Loco’s 2005 acquisition by New York’s Trimaran Capital Partners LLC for an estimated $400 million.
Revenue for the quarter rose 7.9% to $64.6 million. Sales at company restaurants and franchises open at least a year rose 2.3%
El Pollo reports results for holders of its debt. The company filed to go public last year but nixed the plan amid tough going for restaurant chains later in 2006.
In a recent conference call, El Pollo Loco Chief Executive Steve Carly said the company opened nine stores on its own last year and franchisees opened 17.
This year, the company expects to open 10 restaurants on its own while franchisees are expected to open 20.
El Pollo Loco projects to spend about $1 million developing restaurants this year, as it has in prior years, Carly said.
The company’s restaurants are set for Southern California and Las Vegas. Franchise openings are slated for various states, including Georgia, Virginia, New York, New Jersey and the New England states.
The company’s efforts to manage costs were a big theme for Carly and Chief Financial Officer Joe Stein.
El Pollo Loco raised prices about 2% to offset California’s minimum wage hike from $6.75 to $7.50 that took effect Jan. 1, Carly said. A push to raise the federal minimum wage to $7.25 wouldn’t have much impact since most of El Pollo Loco’s company restaurants are in California, he said.
The company’s contracts with chicken suppliers are set to expire in early 2008 and 2009, Carly said. The company faces the prospect that they could be renegotiated at higher prices.
In 2006, El Pollo Loco spent about $9 million on advertising, the executives said, on par with 2005.
In January, Carly and the company were featured on Donald Trump’s “The Apprentice.” The company paid to be on the show out of this year’s advertising budget, he said.
El Pollo Loco faces a challenge from Guatemala’s Campero International SA, which is opening some its Pollo Campero eateries in Southern California.
Carly said he’s not worried.
“We think Pollo Campero has a couple of challenges,” he said. “No. 1, their base,I’ll take Mexico over Guatemala every day.”
,Michael Lyster
