Shares of El Pollo Loco Holdings dropped nearly 17 percent Friday after the company lowered its earnings guidance for the rest of fiscal 2019, citing bad weather conditions in California for their "slow start" in the first quarter.
The company adjusted its pro forma earnings forecast in 2019 to be between 70 cents to 75 cents per share, lower than FactSet's estimates of 80 cents per share. It expects revenue to be in the range of $62 million to $65 million versus estimates of $63.8 million, while same-store sales are expected to rise between 2 percent and 4 percent this year.
"I don't think what we could have envisioned at the start of this fiscal year is the — what is now approaching record rainfall in Southern California or in California," Bernard Acoca, president and CEO, said during a conference call. The company has about 80 percent of its restaurants in the state. He also said it was the coldest February in 60 years.
The company predicts that it will be opening of three to four new company-owned restaurants and three to five new franchised restaurants in the 2019 fiscal year.
El Pollo Loco's fourth-quarter earnings topped estimates. In the fourth quarter, the company's net loss widened to $23.4 million, or 60 cents per share, from a loss of $38,000, or breakeven on a per-share basis. However, on a pro forma basis, it earned 16 cents per share, beating estimates by 2 cents per share. Revenue rose to $106.3 million, topping forecasts of $104.4 million.
Same-store sales rose 4.4 percent, its best performance since the first quarter of 2015.