El Pollo Loco pops 50% in trading debut
Investors are hoping the chain can emulate the rapid growth of Chipotle Mexican Grill.
Forget tech. The real hot IPOs are in the restaurant business.
Chicken chain El Pollo Loco (LOCO) debuted on the Nasdaq on Friday and shares went crazy.
While the company set its final initial public offering price at $15, El Pollo Loco shares opened at $19 and surged to $22.73 a share by the afternoon. That's a pop of over 50 percent.
Investors love El Pollo Loco, translated as "The Crazy Chicken," because it's the latest quick service/fast casual chain to emulate Chipotle Mexican Grill's (CMG) rapid growth. The Mexican-style grilled chicken restaurant has just over 400 locations across 5 states, but the vast majority (352) are in California.
It also has locations in Nevada, Texas, Arizona, and Utah -- split between 168 company-owned stores and 233 franchises. El Pollo Loco opened seven new stores in 2013, and plans to up to 16 in 2014.
The chain’s IPO timing couldn’t be better. Zoe's Kitchen (ZOES) popped over 70 percent in its first day of trading in April and have risen even higher in the last three months as investors sought to get in on the ground floor of the next Chipotle.
In 2013, El Pollo Loco posted overall system-wide sales of $657.6 million and claims positive comparable store growth in each of the last 11 quarters.
But those numbers haven't turned the chain profitable yet. El Pollo Loco turned negative $16.9 million in net income last year, bringing total losses over the last three years to $56.8 million. It also has nearly $290 million in debt currently on the books.
More from Forbes
- Why Chipotle's Founder Isn't A Burrito Billionaire (And May Never Be)
- 10 Top Leaders in Fast-Casual Cuisine
- Bubble Up: Sodastream Soars On Private Sale Talks
"Public offering price was $15", priced the night before..To people that applied and were able to buy.
"Opened at $19 and surged to $22.73"....in brackets (LOCO +52.67%)
Yes Brian Solomon from Forbes was correct, "it rose over 50%".
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