El Pollo Loco’s ambitious three-year turnaround plan, initiated by CEO Liz Williams in March 2024, is proving to be a resounding success, with the company significantly exceeding its projected milestones heading into the third year of the initiative. The fast-casual chain’s second-quarter earnings report, released Thursday after market close, revealed a robust performance that has not only surpassed Wall Street’s expectations but also showcased a clear upward trajectory in key financial and operational metrics. This remarkable progress underscores a strategic reorientation focused on enhancing brand awareness, optimizing unit-level economics, and driving sustained revenue growth through targeted menu innovation and operational discipline.
Q2 Financial Performance Exceeds Expectations
The company reported a significant 3.9% increase in same-store sales, a critical indicator of a restaurant chain’s health and customer appeal. This positive same-store sales growth was complemented by broad increases across total revenue, income from operations, net income, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). These gains reflect a comprehensive improvement in the company’s financial standing and operational efficiency.
A particularly noteworthy metric highlighting the effectiveness of El Pollo Loco’s strategic adjustments is the restaurant contribution margin, which reached 19.5% in the second quarter. This figure represents an increase from 19.2% in the first quarter and a substantial jump from 18.6% during the same period in 2024. This upward trend places El Pollo Loco firmly within its long-term target range of 18% to 20% established during the initial turnaround plan, demonstrating a strong command over cost management and profitability at the unit level.
"We are pleased with this result, especially in light of the significant cost pressure in produce during the quarter," stated Liz Williams, CEO of El Pollo Loco, during the earnings call. "Even with this headwind, our underlying cost discipline continues, which speaks to the margin focus we’ve built over the past several years. We will also balance the goals of driving year-over-year margin expansion with the need for value offers and investment in innovation, technology, and unit growth. We believe we can do all of these and be in the healthy margin range." This statement emphasizes a balanced approach, prioritizing both profitability and strategic investments for future growth.
Menu Innovation Fuels Customer Engagement and Sales
A key driver of El Pollo Loco’s recent success has been its accelerated menu pipeline, which has consistently introduced new and appealing items to its customer base. The second quarter saw the introduction of the highly successful Loco Tenders, a limited-time offering that has proven instrumental in broadening the chain’s customer demographic and driving trial, particularly among younger consumers. These tenders have not only contributed positively to average check sizes but have also resonated well for both snacking occasions and late-night purchases.
"Tenders drove a lot of incrementality," Williams elaborated. "We saw a higher incidence and attach rate through delivery, coupled by late night. It was evident that this fit a need in snacking in the afternoon. We were really pleased with how it helped with check across the board, all times of the day." The company is currently evaluating the potential of making Loco Tenders a permanent menu item, testing holding equipment to assess feasibility for consistent quality and availability.
In June, El Pollo Loco further bolstered its menu with the introduction of Loaded Quesadillas. Designed for portability and value, these quesadillas are priced attractively, available for under $10 individually or as part of a $10.99 combo meal that includes chips, salsa, and a drink. This strategic offering addresses the consumer demand for convenient, affordable, and satisfying meal options.
The company also launched a new coffee platform, featuring its signature horchata, iced coffee, and cold foam beverages. This initiative is designed to capture the afternoon pick-me-up occasion, a daypart that El Pollo Loco identifies as meaningful and currently underserved within its brand portfolio. "We designed our new beverages to capture an afternoon pick-me-up occasion, which we believe is a meaningful and underserved daypart for our brand," Williams explained. "Alongside items like our tenders and quesadillas, we see this as part of a broader snacking occasion that brings guests into our restaurant outside of traditional mealtimes and also helps in building check."
Looking ahead, El Pollo Loco has a promising pipeline of new products. Upcoming introductions include two Double Chicken Burrito Bowls, a seasonal Pumpkin Spice Churro, and a Caramel Apple Horchata coffee. The brand is also continuing its exploration of new salads, wraps, and sandwiches, signaling a commitment to ongoing menu evolution and adaptation to consumer preferences.
Enhancing Brand Awareness and Digital Presence
Beyond product innovation, El Pollo Loco is actively investing in building its brand awareness. The "Let’s Get Loco" campaign, launched the previous year, continues to resonate with both new and existing customers, reinforcing the brand’s identity and appeal. This integrated marketing approach is a crucial component of Williams’ turnaround strategy, aiming to elevate the brand’s profile in a competitive market.
The company’s digital transformation efforts are also yielding significant results. Digital sales have surged by an impressive 13% year-over-year, now constituting nearly 30% of systemwide sales. This digital growth is closely linked to the expansion of the Loco Rewards membership program. Members of Loco Rewards visit approximately three times more frequently than non-loyalty members, underscoring the program’s effectiveness in fostering customer loyalty and driving repeat business. El Pollo Loco has responded by focusing on more targeted offers and enhanced communication with its loyalty members, leading to substantial growth in both frequency and check size among this valuable customer segment.
"This has driven not only frequency growth but also check growth among our loyalty members, outpacing non-loyalty guests by more than double," Williams highlighted, emphasizing the strategic importance of digital engagement and loyalty programs.
National Expansion Gains Momentum
A significant development in the second quarter is El Pollo Loco’s accelerated expansion strategy, with aspirations to establish itself as a national brand. The company anticipates opening between 18 and 20 new restaurants in the current year, a pace that nearly doubles its 2025 rollout. This ambitious growth plan is supported by the successful debut in Idaho in June, marking the chain’s entry into its 10th state.
The performance of new locations has been particularly encouraging. "Our newer markets are opening really well. We’re very pleased with the strength of the sales," Williams reported. "Most are opening above system average, particularly when it’s the first restaurant in the first state or first market. They’re opening to just blockbuster lines and, quite frankly, exceeding our expectations, which is giving us a belief that the fire-grilled chicken is resonating and our brand is resonating. There is nationwide interest." This enthusiastic response from new markets validates the brand’s appeal beyond its traditional strongholds and fuels confidence in its national growth potential.
A Strategic Turnaround in Progress
El Pollo Loco’s journey under Liz Williams has been characterized by a clear, strategic vision and a disciplined execution. The turnaround plan, initiated just over two years ago, has demonstrably moved the company from a period of challenge to one of robust growth and renewed optimism. The focus on improving unit economics through operational efficiency and menu innovation, coupled with strategic investments in brand building and digital engagement, has created a powerful synergy.
The company’s ability to navigate cost pressures, particularly in produce, while simultaneously expanding its footprint and enhancing its customer value proposition speaks volumes about its resilience and adaptability. The positive financial results and the enthusiastic reception of new menu items and store openings suggest that El Pollo Loco is not just on track, but potentially ahead of its ambitious turnaround schedule. This sustained momentum positions the company favorably for continued success as it continues its expansion and solidifies its presence across the nation. The strategic direction set by Williams appears to be resonating deeply with consumers, laying a strong foundation for El Pollo Loco’s future as a prominent player in the fast-casual dining landscape.
Alicia Kelso, Executive Editor, Nation’s Restaurant News, August 7, 2026
