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Financing

Earnings roundup: El Pollo Loco, Ruth’s, Chuy’s, US Foods

Q2 results show the industry's unexpectedly strong sales rebound is coming across the board.
Earnings Roundup
Photo courtesy of El Pollo Loco

Kill the blues songs and put on something more up-tempo:  The industry is rebounding strongly from last year's devastation, as this sampling of second-quarter financial results attests. 

The industry still has a long way to go, particularly in bringing traffic back to where it was. Plus, the full impact of the delta variant of coronavirus has yet to be determined. But the numbers depict an industry getting on its feet again.

El Pollo Loco: Best sales day ever
Thanks to National Burrito Day and Cinco de Mayo promotions, the fast casual recorded its best sales days in the company’s history, reporting same-store sales growth for the second quarter of 14.8% on a two-year basis.

That momentum appears to be continuing into the third quarter, with same-store sales up 14.6% through the end of July on a two-year basis.

Dine-in traffic at the chain is increasing, but only stands at 8% to 9% of all transactions, well below pre-pandemic levels, CEO Bernard Acoca told analysts late last week.

“Over the past month, these initiatives have significantly increased our number of new hires and improved retention, and we’ve been able to avoid any significant disruptions to our business,” Acoca said. “We expect these and additional efforts will exert some pressure on our labor costs during the second half of the year.”

For the quarter ended June 30, El Pollo had 198 company-operated locations and 282 franchised units.

El Pollo Loco’s total revenue was $122 million, compared to $99.6 million during the same period a year ago.

Ruth’s Chris: Regionality tempers a sales surge
The high-end steak chain outstripped its sales levels of two years ago during the second quarter, but the 5% increase in same-store intake doesn’t tell the full story, management revealed to investors. Restaurants in California, Florida and Texas generated a 35% surge, while units in the tourism-dependent markets of Hawaii, New York and Boston were still lagging behind pre-pandemic levels by about 30%, according to Cheryl Henry, CEO of parent company Ruth’s Hospitality. Traffic in June surpassed the levels of two years ago, and sales were further helped by clear signs of indulgence on the part of customers, including a tendency to order more apps, the executives said.

Chuy’s: Hiring is Job 1
The regional casual-dining chain pulled within 1.4% of comparable 2019 levels during the second quarter, and management expressed confidence that business would continue to grow as dining room capacities reclimb to 100% systemwide.  To meet that rising demand, the company is moving forward with its plan to provide bonuses in the third and fourth quarters as a retention incentive for GMs. Chuy’s expects hourly labor costs to hover from 5% to 7% above year-ago levels, and for commodity inflation to run between 3% and 5%. Officials estimated that about 85% of its unit-level jobs have been filled.

US Foods: Independents roar back
Independent restaurants increased the number of cases they ordered from distributor US Foods by 79.1% in the second quarter, compared with a 53.5% increase in volume across all restaurant types.  Further signs of a rebound for smaller operations was provided in the distributor’s breakout of organic sales: Independents increased the volume of their orders by 74.4% in the second quarter, compared with a 50.3% increase across all accounts. The upsurge swelled US Foods’ revenues to $7.66 billion, a 68% increase, and net income totaled $55 million, compared with a year-ago loss of $92 million.

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