El Pollo Loco (LOCO) Expands in Texas with New Restaurant

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Leading fire-grilled chicken chain in the U.S., El Pollo Loco Holdings, Inc.LOCO , opened its latest outlet in Dallas, TX, on Dec 27, 2016. The 2,995-square-foot restaurant, located at 9425 Forest Lane, can accommodate 70 guests.

The outlet features the brand's new 'Vision Design' and has an open kitchen layout to display the preparation of its signature dish. It marks the El Pollo Loco's debut in the city of Dallas and is the seventh location in the greater Dallas-Fort Worth (DFW) market.

El Pollo Loco currently has more than 450 company-owned and franchised restaurants in Arizona, California, Nevada, Texas and Utah. Also, it is looking to expand its presence in key markets like Houston and Dallas. The company has opened more than 25 restaurants year to date with another five to open in the coming weeks.

However, El Pollo Loco loses out in terms of international presence. While other restaurateurs like Yum! Brands, Inc. YUM , McDonalds Corporation MCD and Papa John's International, Inc. PZZA pursue aggressive global expansion policies, it seems to be weak on this front.

On the other hand, the company had joined the S&P 600 Small Cap Index after the close of trading on Sep 12. We believe its addition to one of the most widely followed small-cap benchmarks is a key positive for the company.

Going forward, the company expects to boost traffic on the back of increased focus on catering to health-conscious customers by offering customized meals without compromising on flavors. Interestingly, menu innovation and limited time offers have also been contributing to traffic. In fact, the third quarter of 2016 marked the 21st consecutive quarter of positive comps for the company, and this trend is expected to continue, given the various sales and digital initiatives being undertaken.

Nevertheless, a challenging sales environment and lower consumer spending in the U.S. restaurant space remain headwinds for this Zacks Rank #4 (Sell) company's top line.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Shares of the company have gained nearly 1%, year to date. This performance is almost in line with the Zacks categorized Retail-Restaurants industry's performance, which gained 1.4% in the same time frame.

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

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

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