SAN DIEGO and COSTA MESA,
Calif., Aug. 28, 2015 /PRNewswire/
-- Shareholder rights law firm Robbins Arroyo LLP announces
that a securities fraud class action complaint was filed in the
U.S. District Court for the Central District of California, Southern Division. The
complaint alleges that officers and directors of El Pollo Loco
Holdings, Inc. (NASDAQGS: LOCO) violated the Securities Exchange
Act of 1934 between May 15, 2015 and
August 13, 2015, by making materially
false and misleading statements about El Pollo Loco's business
prospects. El Pollo Loco Holdings, Inc., through its
subsidiary, El Pollo Loco, Inc., develops, franchises, licenses,
and operates quick-service restaurants under the El Pollo Loco name
in the United States.
View this information on the law firm's Shareholder Rights
Blog:
www.robbinsarroyo.com/shareholders-rights-blog/el-pollo-loco-holdings-inc
El Pollo Loco Fails to Disclose Declining Sales
Growth
According to the complaint, El Pollo Loco, in an attempt to
mitigate the effects of rising labor costs, removed its
$5 menu from its menu boards in
February 2015, which in turn drove
away its value-conscious customers. During the first and second
quarters of 2015, the company expanded its product offerings to
include higher-priced shrimp and steak, which increased the
company's costs during the first half of 2015. El Pollo Loco
officials concealed the deleterious impact of this strategy on
first quarter 2015 traffic at its stores and issued a series of
misleading statements regarding the company's second quarter 2015
comparable store sales growth. As a result, El Pollo Loco
stock traded at artificially inflated prices, while allowing
company officials to sell tens of millions of dollars of their
personally held shares.
On May 15, 2015, El Pollo Loco
issued a release announcing its first quarter 2015 financial
results, stating that the company experienced strong operating
momentum through solid sales and earnings growth. In a conference
call that followed the release, company officials made further
positive statements about the company's strong store sales trends
and ability to meet its second quarter 2015 guidance. Then, on
August 13, 2015, the company
announced its second quarter 2015 results, stating that sales had
only grown 1.3%, including a 0.5% decrease for company operated
restaurants, conceding the negative impact of the reduction of the
value portion of its menu and introduction of higher priced
offerings. In response, El Pollo Loco's stock declined $3.80 per share, or 20%, to close at $14.56 per share on August
14, 2014, approximately 33% below the price where company
officials had just sold $132 million
of their own El Pollo Loco shares.
El Pollo Loco Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney
Darnell R. Donahue at (800)
350-6003, DDonahue@robbinsarroyo.com, or via the shareholder
information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves
and the companies in which they have invested.
Attorney Advertising. Past results do not guarantee a
similar outcome.
Contact:
Darnell R. Donahue
Robbins Arroyo LLP
600 B Street, Suite 1900
San Diego, CA 92101
DDonahue@robbinsarroyo.com
(619) 525-3990 or Toll Free (800) 350-6003
www.robbinsarroyo.com
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SOURCE Robbins Arroyo LLP