El Pollo Loco Expands in Texas, Focuses on Menu Innovation

Shutterstock photo

El Pollo Loco, Inc. LOCO has been relying heavily on expansion strategies and menu innovation in order to fortify its brand presence. The company's tactic of driving customers and building loyalty is through launching distinguished menu offerings, and providing revamped ambiance in its restaurants.

To this end, the company recently launched Handmade Chicken Tamales to provide guests with additional satisfaction during the holiday season. As for expansion, El Pollo Loco opened a restaurant at Grand Prairie, TX. The restaurant, which is the second location in Grand Prairie, is to be managed by the company's franchise partner,Chicken Time Holdings.

The restaurant will roughly seat 66 guests and will feature the company's 'Vision Design' initiative. A unique brand positioning and other sales-building strategies have led El Pollo Loco's shares to gain 56.9% in the past year, outperforming the  industry 's rally of 12.9%.

Focus on 'Vision Design'

El Pollo Loco is opening all of its restaurants under the 'Vision Design' initiative. Restaurants under this program offer authentic atmosphere inspired by Mexico that includes El Pollo Loco's menu and brand identity. Those restaurants also have an open kitchen layout to display the preparation of the signature dish.

The company believes that its vision model is going to position it better in the quick-service restaurant space. According to El Polo Loco, it is witnessing encouraging results from the implementation of this model in various company-owned and franchised restaurants. It also aims to reduce costs and drive sales through this initiative.

Our Take

The recent restaurant launch underscores El Pollo Loco's efforts to further foray into various markets. Giving expansion strategies an utmost priority, it also announced that it will open eight company-owned and nine to 10 franchised restaurants in the current year.

The distinguished menu that is served in the restaurant also shows that the company is focusing on enriching guest experience to drive foot traffic and sales.

El Pollo Loco's relentless focus on providing excellent service and reasonable pricing is expected to continue driving revenues. Banking on menu innovation, limited-time offers and a strong brand positioning, the company witnessed year-over-year sales growth of 10.9% in the last reported quarter.

Further, per the Zacks Consensus Estimate, current-year revenues are likely to grow 8.1% from the year ago.

Zacks Rank & Other Stocks to Consider

El Pollo Loco currently carries a Zacks Rank #2(Buy). Other top-ranked restaurant stocks are BJ's Restaurants BJRI , Darden DRI and Dunkin' Brands DNKN , each carrying a Zacks Rank #2. You can see  the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Earnings for BJ's Restaurants, Darden and Dunkin' Brands for the current year are projected to increase by 66.8%, 16.8% and 16.5%, respectively.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Dunkin' Brands Group, Inc. (DNKN): Free Stock Analysis Report

Darden Restaurants, Inc. (DRI): Free Stock Analysis Report

BJ's Restaurants, Inc. (BJRI): Free Stock Analysis Report

El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: DNKN , DRI , BJRI , LOCO

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?