CHUY - Earnings call transcript Q3 2020

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Operator

Good day, everyone, and welcome to the Chuy's Holdings Third Quarter 2020 Earnings Conference Call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode, and the lines will be open for questions following the presentation. On today’s call, we have Steve Hislop, President and Chief Executive Officer; and Jon Howie, Vice President and Chief Financial Officer of Chuy's Holdings, Incorporated. At this time, I will turn the call over to Mr. Howie. sir. ahead go Please

Jon Howie

www.chuys.com and our By release. third be website it operator, section. have If everyone access can at our at to quarter found the good you, Investors now afternoon. should not in Thank XXXX earnings

them. cause of from recent our that therefore undue future and financial refer discussions remind SEC not I'd We the to our the risks remarks, I that will guaranteeing discussion actual statements our a operating statements you are include put forward-looking all These future Before results call way, to over everyone review for risks need on results our detailed more could subject differ part and that should also what we Steve. we all not to reliance like uncertainties formal impact and With begin forward-looking filings performance, of to today condition. to to of are materially of statements. These turn you the numerous expect. could that

Steve Hislop

is both see work members. Their hard results. and loyal for serving from the And truly difference believe our Jon. Good afternoon, third like for team in guests our begin I'd on our today. and their company during relentless my you, earnings expressing for each safe one thank as has appreciation every of quarter and our dedication off a by our call this staying challenging us you hope quarter joining I to third you healthy. made environment we paying and everyone everyone guests. is can Thank Chuy's

and second negative improvement negative from During XX% in the XX.X% recovery quarter. delivered restaurant comparable sales we of quarter, our continued a the business

September. and for were XX their restrictions. the easing in various with indoor to we negative culminating the through our capacity were a quarter the make restaurants end open sequential of states with $XX.X third able restaurant million comparable quarter, progress At of of each month sales various were dining As restrictions,

XX% -- quarter than a In continue maintain we the total addition, double of to levels. more XX% business about last year sales of during strong off-premise or

on-premise offerings Even our avenues strong our all-current make in dining business. of opportunities as to see all up regard also efficiencies. demand our reopened continue progress we all through for to significant our to continued we've guests more with operating for We've

lower the third and approximately profit increased operating by grew restaurant margin we level level on restaurant XX% For year-over-year quarter, our XXX basis by sales. points

sales. have tremendous sales cost restaurant done labor a with job of lower despite and Our year-over-year teams management

more in-dining returned and ahead our slow further rooms' bring gains would to we efficiency volume restrictions loosened to Looking we as direct sales costs. of as additional are a normalized some back level, our

of However, benefit operations. a no work our there teams will during doubt hard to is our months long-term six have that last the the

We effort have been marketing portion with have in messaging which key of and the our with resumed resonating of during well Mexican-inspired this of a offerings. ensure safety. three convenience guests uncertain key all restaurants can continue craveable enjoy safety, freshly our value, our to messages we to guests time. Starting our each Naturally in do these to prepared what translate very with

restaurants. Our past while investment role important and members our played dining this in keeping our in guest technology year has in from certainly team an safe our

convenience, with their our through business pre-COVID the dining said off-premise procedures improving pickup further Even as double currently curbside sales. device, while business third than opened at more strong all transactions quickly our our promote are allow I've takeout, quarter with during We services. to To remains rooms will we any our complete delivery enhanced testing and DoorDash continuously our and our waiters. performed a are pay-at-the-table point guests minimizing which contact off-premise

family convenient beverage of number promoted menu has guests. feature proven to as offerings streaming entrées, by have reduced we adding our popular a kits, very to be and with our meal as which value Lastly, well

As into marketing popular we efforts menu awareness. of will to quarter, drive main items add digital our start back the some to the offerings fourth with of we support go into our

turn discuss our quickly over the call Jon, to let I Before me development.

one you next As of to new development in openings in restaurant February targeting Barring new restaurant to we balance know are changes currently and store and we the XXXX. opened external environment, the for suspended subsequently major six in four discuss each during resume to With results development expect now Indianapolis CFO, greater XXXX, I'll of starting our the quarter Pines half third in in over Howie one detail. with restaurant open that, first and the to Jon a Pembroke turn expected year. our in to call the year

Jon Howie

nine year XXXX. Steve. restaurants, for closures million sales permanently $XXX.X weeks XXX operating the third to we to X,XXX weeks decline decreased the driven of last quarter Comparable approximately quarter to $XX including million by September ended third as well XXXX. as in compared during temporary that closed of the the fiscal a traffic total, restaurant In Revenues XX.X% during due quarter. of XX quarter primarily third Thanks, loss from on were XX, of had operating same operating COVID-XX year, loss decreased weeks the during stores XXXX

As by remained Please the at sales today's quarter release period. third to Steve cadence for mentioned improvement approximately quarter off-premise revenue. XX% sales refer solid of our during third our earnings total

the store as to approximately company deflation with as percentage to the as during rate to primarily management basis personnel during with model the to of cost in the Currently partially in expansion me, in salsa prices growth the and XX.X%, quarter. as to offset the of offset costs as coupled hourly has points XX% percentage national-level fourth basis to X.X% primarily increase dairy. the points XX of fourth due response points elevated and the and fees of XX pandemic, be an as in credit relying the a to of off-premise cost compared decreased beef hourly we to-go for -- in chips a increased cost marketing percentage operating primarily from initiatives open. sales and Labor approximately to year's marketing increase the and points cost-effective, quarter, points by Car revenue XX.X% XX% basis of by remained cost Operating decreased driven Nacho XX because to in our labor of effort. Turning XX.X%, to dine-in increases basis XX reduced of points XX% business, basis increases of cheese. revenue menu the a complimentary dairy the partially quarter lower in approximately quarter reduction transitioned buffet-style insurance fourth while off-premise third percentage to due cost sales range by through to limited XX.X%, and to XXX as excuse costs. as have digital of our dine-in of the delivery labor quarter. more of in expenses. a would points last eliminating our capacity basis expense store from -- employees XXX increased the charges QX cost a result opportunities prices and basis to of a These revenue decreased and sales percentage result supplies produce XX expect a revenue a on Cost COVID-XX and in X.X%, local we Currently card switching expect quarter of of Marketing more

a quarter fourth of $X measures, as fixed as to points of and of planning decreased resume revenues. response marketing digital sales same during from expenses. result We third around our X.X% spend to cost-saving period to as are million as expenses the of reduced Occupancy X% in increase quarter, COVID-XX. we increased the occupancy in last X.X% our to primarily, primarily expense the and by year, of to basis percentage marketing travel, million recruiting a General in driven revenue, other to efforts expenses deleverage result a administrative various $X.X XXX

approximately $X for crisis million fourth of $X.XX the period from earlier was We diluted expect quarter a G&A the net including to diluted of accrual them of to employees and In $X.X last were or compared make share XXXX quarter, million in implemented in year. that our share, during same the net this for loss to $X.XX during or year. $X.X the performance, to income per our per COVID-XX summary, salary special the bonus their reward whole million decreases total

$X.X diluted restaurant share During account, quarter XXXX XX.X% million third in or the as well deferred with $X.X closed the $X.XX or a third quarter adjusted last that million year. costs increased XXXX, as tax $X.X $X.X of per the compared million diluted to million in same $X.XX per impairment to CARES period Taking in share, into we in incurred a for conjunction net income the Act. adjustment revaluation of

liquidity our it turn quickly let to and sheet. Steve, on back I balance touch me Before

no of and debt steps on revolving $XX.X the of navigate taken, -- believe on We this million quarter of for credit that the COVID our Steve. environment. firmly to to turn in equivalents, footing from and million pandemic back had $XX solid this the -- call we based available cash that, we've standing aggressively With are a As the facility. we onset since or and continue availability financial cash I'll

Steve Hislop

Jon. Thanks

our of our remains, and footing, dedication strength positive of of surrounding our and financial and is members, every uncertainty trajectory, strong team ample While sales one business with recovering, each relentless COVID-XX the liquidity concept.

every we're business conditions weather once answer who to are and working to to a pandemic a operations, to on With work team tirelessly subsides. happy market any all earn We to questions. improved this and alongside our dollar, you. proud of are that, members, equipped ready the group Thank And our tremendous ever-changing day. be to I'm people single capitalize

Operator

first We with begin Stifel. Instructions] O'Cull will go our from question-and-answer Please [Operator ahead. session. will question Chris the come now And

Chris O'Cull

afternoon, good you? guys. Of course, are [ph] How

Jon Howie

there's the phone. I guy thought a new on

Chris O'Cull

we as as about I romps think you XX%-ish sales and or how recover? recent sales the think two mean, increase will in sales should the quarters recover? the cost decrease correlation, do Jon, past

Jon Howie

back, have again, we coming Chris. some limited the costs Well of

last as so do And open of will the continually come talked as of of that bring XXX labor to fixed we've as margin think at And We're back. those basis the we this current like those rooms, maintain accomplished But environment. about that, least quarter. we some labor, in front-of-the-house far we starting we points some back. costs can also dining

I think points -- that. that, can at if So about we attain XXX you the pre-COVID basis and look XXX on add or

Chris O'Cull

some the pretty And gave on detailed last line item restaurant call. you guidance

plans for the So in the you trying if, just, current something changed I'm quarter light whether the or quarter, conservative were to be in just curious environment? the third during of

Jon Howie

don't just a only. stores couple Well, -- that going not conservative if knowing just the forward, to-go to to somewhat the do gone going I have environment what is have know entail being is word we really or because back

with of a kind So presidential lockups uncertainty -- seeing that the and depending what the out there's volatility of like lot just stuff and upon of Chris. the we're and there,

we've in somewhat been that. conservative So

Steve Hislop

Yeah.

Our little crystal at, ball murky. times a bit get

Chris O'Cull

back No. a I guys. in Thanks Yeah. queue. I'll get understand.

Steve Hislop

Thank you.

Operator

come next from Our Mary Hodes will Please with question go Baird. ahead.

Mary Hodes

Thanks capacity be why or maybe into wanted at you stalled the I that would The recent running you afternoon. rise to I improvement attention surrounding you walk any think appears or think whether taking level, an And down even in cases impact? perspective might reversed just COVID media bit pace the you're could of Good in is through, here have wondering that October. mid-teens having whether my the be, including helpful. Just comps. for little was ask if to question. on a constraints

Steve Hislop

of all the to above. Yes

that been XX% again really -- that for thing mentioned So the six-foot us, do even distancing. six-foot the definitely, capacity been ball XX% in distancing. definitely to We really and capacity well. it's as calls, the is The we're I of news subsides believe key so mean uptick Until thing we're pretty at we've because that doesn't where lately. doing more again crystal an has yeah last is in matter, XX% that, with two

So that's what we've been on. working

talking have not with next the definitely dining, two message. So that added improvements that even about larger the periods the didn't quarter. of last beginning the possibly also quarter we the into in we that, home to although, and closer that capacity holiday we believe on, and believe a can the we few make until we marketing with the capacity -- fourth fourth we're currently one value home, parties, can existing through have, the way the believe we're month all getting we periods resonate little of little we're and fourth bit that at over And believe the we months, our convenience start -- there. We with we've of bit We customers will in also. again catering safety, into our

year, do August the rest as and the we move from numbers So capacity through forward September. of believe, we have our some in we

Jon Howie

thing And in school -- had too I well delays that... some another openings guess we we've is, had as

Steve Hislop

back. Pushed

Jon Howie

we were about and …That pushed they're really AUVs. the a But is, little And bit. in those at back weekly look at AUVs look they you look if it $XX,XXX one $XX,XXX October. thing about in September weekly at

So pretty it's staying good.

Steve Hislop

We're pretty excited…

Mary Hodes

you. Thank Okay.

Steve Hislop

at pretty with …We're straight to with be, you. excited we where are and honest up

Jon Howie

Yeah.

Mary Hodes

simplified Yeah. of separately, then you bit fewer talk managers seeing you've of That's can labor And changed just and with little what per guest satisfaction, menu here the moved a feedback terms you're customer helpful. in number to the or about, model since a restaurant?

Steve Hislop

And type one any are this. of been some I that lot taken seen mean concerns a very and the for it's Obviously, issues that speed the our they open have and number the areas consistent. menu then in. that we're and in We've pre-COVID the them employees. that with appreciate guests we're happy we've that very, Yes. consistency safety and we of through in

again been stable. So, it's pretty

far of before around pre-COVID. Again different closing hours very operating a because service reduction again X. we're close as level weekends Sunday at are bit, and the were As little with remaining as the very a levels we're open We and manager long through menu we consistent at simplified so good. a not Thursday X. On as

Mary Hodes

for you. Thank That’s me. it

Steve Hislop

Thank much. you so

Operator

ahead. Setyan question Securities. Nick will Wedbush from next Please Our come with go

Nick Setyan

up amazing questions on to stores? earlier on went how's the only you. back to you impacted quick Thank just the on A quarter-to-date number? Did question. follow a And And you of an just to-go say couple couple congrats of that margins.

Jon Howie

went Chicago, to-go No. only. It to hasn't in it But impacted it that much Nick. back

cases. we As a now. Paso in know, COVID open El spike And only in then you have had that one market right

only. but weren't so And gone significantly have to to-go those anyway back they've Those units gone high-volume back.

those for ready back up. we're So open to

Steve Hislop

two-week frame those. on And time Yes. then we're about talking a

Jon Howie

Yes.

Nick Setyan

Understood.

just any chance able to to us these tell were margins us Just we what level like understand comparison so XXXX for context give the what you'd year-over-year is? stores be unit the XX

Jon Howie

I I I not Nick. that have that don't me. me with provide have can them. do with But

Nick Setyan

just four on what growth the a Yes, the And kind worries. No year overall worries. units no or of economic even unit new expecting. was Have decline seeing targets? aggressive six then supply? you rate unit pretty is refined – comparative you Are and at competitive unit to your the of least in next landscape, kind your to I volume new relative target

Steve Hislop

quarter as we drive smaller say our the where we've is last we units what our seeing specifically I right you're now, – we're new our do here execute – we sit comfortable then been able with labor, management moving to with hourly comfortable Yes. labor, menu forward If that With where are us feel everything go, today. even and in like can forward, it now. we and right and the heading stays let's moving – mean Nick, we're margin

anything anything if to a of we that than excited that's be about. at. we'll – take look specifically, last what what today goes we're a is the backwards as remain or Again mean that forward I six the looking over But we'll at. – And couple better periods we quarters couple the on of decision move same. four So see hard

Nick Setyan

very you Thank much. Understood.

Steve Hislop

You welcome. are very

Operator

with Barish will Jefferies. come Please The from Andy next ahead. question go

Andy Barish

guys. hear Can you from Hey, me?

Steve Hislop

Andy. Thanks,

Andy Barish

something The we wage haven't labor really of. is much hourly deflation heard

team bit managing wage you staffing. with stuff like more finding us obviously a of In on that. color the COVID through it's just But the and more can a now fact, deflation give little bit little been it spikes tougher actually? members sick kind And

Jon Howie

think is The the the that it's Andy But we little house. on as jobs. other back of hire seeing ticked back of has the people we're front think of the think mainly to I house up What waiting found – the front a actually Sure. bit. I we some I were house

lower money so our rates didn't they back they're them rates were busy so back people we hiring them some making as we're at we as as to-go much that higher were. hired wages. that well And to the back that hire at has some have So been at to-go and of them

to-go so is and really the front-of-the-house And biggest it wages. of driver

Andy Barish

Very help drive you exclusively helpful. to some the you of the DoorDash? does implemented kind And did transition down fees show And XQ that during the of in delivery to – as seemed increase up in that XQ?

Jon Howie

with Xst we of the DoorDash implemented No. did [indiscernible]. I mean the fully and right the at quarter in finalized first I got we before – mean that year that

implemented yes delivery. the also And so our been seen in with – the in we've we increases time. But that's increase whole

So and our prices prices regular a delivery on period with menu two. those we in have different menu increased

helped so offsetting tremendously out us fees. fees And – that's those on those

Andy Barish

the for color. Thanks Okay.

Operator

Our next come question will Stephens. Rutherford with go ahead. Please Jim from

Jim Rutherford

question. taking the call I to on wanted Chris' for of the back line thanks to beginning Hey, circle the at question margins. of

Just I pre-COVID? down margin you was sounds break that compared if XXX step-up basis points what sustainable like curious to of could

Jon Howie

most labor. Yes. I'd will I James it you of tell be mean probably in

probably XXX said Car sales getting come of the the And like back. But talking when get we will labor gradual. think – still menu in be You're think anticipate we other don't back. alone. Nacho But basis cost XX we back will our we I I our that full points

points. a So probably savings that's of to XX basis XXX

basis those that are totaling the really So points. up to that variables are XXX XXX

Jim Rutherford

being investment table-side loyalty behind just Okay. road? is. that payment maybe logic even you this making expanded payment And into do Got potentially what that and payments, then it. table-side or the the down in curious is on the ordering envision Just

Jon Howie

currently test we're all testing to servers some orders now standpoint. at have the different we handhelds. the from things table-side looking those just take where payments on we're contactless that in can We handhelds. handhelds continue still But Right restaurants a

QR but your thing in different – at pay pay to items really table table. test And at the we phone. is So a this a at continue the it's new through the code

works pretty slow. it So

Jim Rutherford

I that that If please. sneak I accelerated could the I'm just sequentially drove think see. I what just little bit. I a in noticed one average check there. more growth curious

Steve Hislop

so drove that appetizer we is that couple the moving What reduced up. Yes. we a the menu obviously are of were our things items, took lower-priced off when of some people

marketplace, product things business you're out up. industry. the So it's moved our the definitely go side on happened as the and a see of really in it mix if going of and lot same what's out to into menus that's And again, the you

Jim Rutherford

Okay. Thank you.

Steve Hislop

Welcome.

Operator

next come Markets. go ahead. will question Capital with Strelzik Our from Andrew BMO Please

Unidentified Analyst

It's Hey, taking guys. Thanks the for for today. actually Dan on Andrew question.

is -- like moving I if sound me. now. just the at for know curious markets. markets you new to next next are the into right First, they'll Those existing year or markets existing these mentioned you're do six four potentially in be any those looking openings year, focus But if really

Steve Hislop

have It strong will in existing already. be AUVs we where all markets

Unidentified Analyst

makes markets. competitive it. you Steve, how Got you That had observed about your quarter then, sense. know closures And some talked in guys of I last some

wondering or few Chuy's kind new in probably what some of any accelerated we've is imagine relocation varies either are real that estate others quality, from I'm way. right development opportunities lower market. could I but of kind now seen estate close continue about I whether real or how if the months just store the even perspective. us those you stores some know if by that of heard And through incremental you've maybe potential talk maybe for seeing a some So on past and you're just details give

curious what guys So are just seeing. you

Steve Hislop

Yes.

all the last of I I mentioned time think it is what happening. rumor

again, see during a that's whole the the and have going seen And a existing local I the in be news taking past we that's ones holidays, haven't as But, rumors, why is whether quarter, any might any to more. out our we get what where some we'll and I Again, points We've see through so in that I we're you're and the of really few to happens, you're ton holiday, big first smaller locals. it's competitive be really heard bunch. of hearing we really forward. And cost or opportunities landscape as just look into first quarter. think sites of a what's the it going it's over at a But what move it that market holiday hearing the yet. seen happening it restaurant the for whole or until looking little a anticipate bunch after am though Again to not opportunities, bit a gone the don't And there. out. We haven't trend far. guys

Unidentified Analyst

are one is again, to through in I'm had some opt Okay. previously more if there you quick of know could. pause if I marketing there XQ. just next only the kind out. continuing That's a one more an those here second of year? are is paused coming capacity in shutdowns, go shutdowns helpful. marketing potential or time if wave then to sort And just efforts Obviously forced But that wondering the we it's off-premise I back marketing you of of comfortable wave a second

Steve Hislop

it Yes. cost as Thank to nimble it been whatever to We're or We're goes be all, able over we've six and what we'll nimble you, And okay? very expenses months. continue whether been show there. question. from able any last do to on very nimble, be the and we've great

able being increase depending at. the play probably that two; We're and mentioned resonates then our second our up whether both spend and turn of is safety are I'm to two stay one; turn we'll now the for and in this ear obviously, hourlies digital. employees But like. fit. and this ease environment execution talking months I number now, move really as we on we're convenience Right I'm we're we'll next What I about or X%, three, XXXX. which ability But anticipating we and I I period to by where through value this being that social also see number time. to And the is down and think quarter main as and drivers, that things right over and that all-digital number is are of wick to on concerns the our customers in and have it's as issues we So over like be all we off we which it comfortable paid think doing, three things that that of the we'll an is forward. of into carry expect as first Jon up the quarter about

Unidentified Analyst

Great, thanks question. taking you guys. Appreciate the

Steve Hislop

My pleasure.

Operator

The next question Brooks go will King. Todd from C.L. with come Please ahead.

Todd Brooks

for Thanks guys. questions. taking Hey, the

couple left here. Just a

First, I cost about the if can now, but on on food for of know -- you're talked the menu? about as you talk about on back these we've here things got you the you Can the bring coming and streamlined talk items type impact holiday. back you menu some back adding that

Steve Hislop

Yes. whether wanted Yes. cost add nachos see the we we're we cost a talking so our per that a few see a and se. add a quesadillas and mix on, huge big just effect change, We to panchos. of handful. you'll on food be the it food appetizers see And don't don't us the But

You'll see some on. of those pop back

we'll enchilada, and we -- winter do all that then that couple scratch make be back. our of to a add-on it tortilla chicken daily. that things see You'll sense stuff we'll soup back salad bringing our an that be building type bringing bring we'll back And that makes time, through of in from the

lot everybody Tres makes the cake be we which want Leches will we have back also that then, main for bring a we holidays, those of to sense think the into coming ones. during the the And for us. So back holidays,

handful in of XXXX some sort three So items. And add-ons stay little around menu three and some again, next menu bit we months newer the change have around probably look where then. of of and there see this pandemic our right at that's you'll a where period a in evaluate two, and might couple of we're a we'll at for a

As through of we're well the are pandemic distancing and the little getting as social things less long progressing sizes. a

Todd Brooks

an think And tailwind being of or as do it's are kind Steve, same in add additions there's the these menu, desserts, things that items, to appetizers they average you with categories? are you some of back or these replacing whether the plus that

Steve Hislop

a and on eaten bringing our And I our think there appetizers, if straight restaurants bit little down could restaurants. you people be you. back be bit full to in it's eat again, the go a average. lower Because it's if it up in meals could with you've how little them honest eat check our appetizers,

again So specifically it to bit. don't goes time expect holiday value And no wanted and a average But that be convenience really that check along it go with I tad message period. the up. could the I in

Todd Brooks

able -- is of then alcohol? and Okay. that do this you this And alcohol to it… to percent stores many bottle that that how just be off-premise if how many here about And genie talk to stay that we maybe my that go the final stores think sales you'll able Great. question, is What do led do now the you're is has been the out to of with to-go of orders, in? the

Steve Hislop

it is, Thank I apologize. yes. you. think I

tax revenue I think perspective, local it's anybody -- and especially hard it a to to I once away it be move to say. the here some mean government. is in from that had from going

think to I'd XX% XX% to I it our is of stay. right sales. we say, that So here in our Again sales probably now the restaurants. X.X% have is of the about And that... alcohol

Jon Howie

sales. to-go Of

Steve Hislop

Of sales. to-go

the XX% get consistent and bigger three up as I think that over XX% to about again, end might two a to we last time do pretty been So seeing by staying row. feel And it's you there. also. see that And goes in I good that periods

So we'll we it and continue like with it.

Todd Brooks

mix have kits. Yes. some that success further could Do drive And you higher? a in adult quick follow-up. beverage know you've with that development had kits I

Steve Hislop

nothing of to Right now we about we're out. looking or talk roll have bunch ready a but things at whole

Todd Brooks

Okay, great. Thanks.

Steve Hislop

you. Thank

Operator

question James. with [Operator Vaccaro Brian Please will Instructions] come Our next go ahead. from Raymond

Brian Vaccaro

margins circle your any you moved And back some quarter-to-date? were margins appreciate quarter fourth some kind quarter? through third we where store there. wanted give the give guidance the margins I as and But on could us perspective could you to Thanks. of -- Jon if on us perspective on

Jon Howie

As fourth far as quarter-to-date quarter? the in

Brian Vaccaro

Yes.

Jon Howie

Yes.

XX probably just closed they're the financial those but we're and by finalizing that they're in They're lower period But we points, a still so statements. So similar. basis range. little out XXX

quarter. I think in right They that we that last said margins the to up of here in in July, with ones the were quarter on had remain XX% XX% and around August to I come September. that call the XX% that kind range XX%

So our is they're that quarter XX%. quarter. it at looking consistent lower right the things fourth is around I mean indexing the we're obviously in that --

it -- is have we'll So lowest our indexing quarter.

stay is it as have But if rooms added still bit teens. we going So a deleverage some does expect we're there -- have we're there have we'll continue well we to could it dining there. able in to to those open high some to some consistent be little increase back, costs it our if and if as

Brian Vaccaro

That's back December And historical speaking if to seasonality your look or when us relates Can maybe the XXXX. QX quarter are on of October, of it to just Okay. much AWS or great. at you October? maybe November, lower you you seasonality just hone will in fourth in as remind your comparatively how

Jon Howie

a were XXXX. $XXXXX at mean So at And $XXXXX QX average looking if we're about last like in I'm range we the at $XXXXX of I year high $XXXXX AUVs QX at in to -- QX looking in XXXX, week.

there. that to drop you give ought So the of kind

Steve Hislop

Having said that...

Brian Vaccaro

season. a Right. the kind you into I is October are just quarter. -- cadence really there December pretty even, or I as of the December was falloff guess through like holiday -- the continued that's move does question

ask that I Sorry effectively. if didn't

Jon Howie

of of I holidays There the except be that to Yes the continued going us. for a this between what know weeks our it's year Year's tends but is That's be very year year. I'm to kind week during New for that and week of sorry. last the probably the generally. Christmas week of don't one falloff big biggest a

Brian Vaccaro

Okay.

And didn't Steve, I over sorry mean talk What that? was you. to

Steve Hislop

No that was I Jon, but him to was good. better. I interrupt about know

Jon Howie

Yes.

XX that of our earlier, year were which thing they and stores mention by the between this we other The call we might too -- the existing if stores. Nick base were comp was the and difference at the I in -- at the existing was asked what think I end looking

points Our XXX margins about stores. increased have on those basis

had but kind So year-over-year savings question I'm have well. a existing the stores not for of our as margin was, significant what sure

Brian Vaccaro

Okay. all, standpoint. early curious, if you Great. what are saw expectations? could have commodity contracts cetera on XXXX, how in on commodity your look a you inflation beef quickly has commodity abated your based you at inflation from out inflation, QX on et an or play Real I'm the think XQ

Jon Howie

kits actually in we've we on beef decent consistent. XXXX. we're But starting fajita as people bit -- that's fajita the it thing our be getting up skewed store. -- much the these we'll that. what little that. really a our and fajitas is towards is Because driving actually biggest think we've been to what's and price that lock on with mix. have ground not at price increase has And a Well But is beef did at mix are We somewhat

the So of that's a increase is sales that really in higher-priced at higher driving what's item a mix. cost

Brian Vaccaro

I a Florida been only to wage in I help a that for the Could the increase say was cost I you with could sort wanted of me. And Great. minimum it's you level? expected years? so last next XX% only of help is that frame one week. Florida this how stores. a high know tipped frame us five wage meaningfully guess at over earlier your to us increase or much but voted few represents pressure the that I hours, But pretty know state about ask of the Right.

Jon Howie

implemented. those already, still will going right. hours But overall until entire you're of have obviously tell all will piece which that good rate, some We few so can over in it's be of impact you I pretty rate won't raise say I that right? be rates mean not So how above analyzing don't it's -- we're to rates we're rate still I'd they obviously But got well. you there mean the on that what our wages will wages. that. because start being no -- know those we see that but Well, the shouldn't too been haven't a anyway significance of I just a I

Brian Vaccaro

can Steve, topic you wage are say allowed I I that's levels. speaking markets most in that back you state server house above state? have know in minimum on generally the just that above And that about while wage tipped Okay. you see much of are I guess, wages thinking wages that well

in you're on or $X.XXs. wage dynamic holds Florida server say $X.XX, side, the that if in curious the say Just Texas does in

entry the on topic. curious broadly wage server Just

Steve Hislop

you're now Right Yes. by market-by-market. wage going with whatever that's the tipped

So we're already that we're at or the above it in in. each markets and every currently one of

Jon Howie

pay the more some thing we that one are to fit Probably Yes. that are that obviously. will at indirectly there look

Brian Vaccaro

Yes.

Jon Howie

still aren't regular that hostess more of that than paid wage some not wage. the that at of the be and would the that your tipped some and have are front house And we those

in all the the that's going as So of front well. house

Brian Vaccaro

Yes.

great. right. Okay, guys. All Thanks,

Jon Howie

Thank you, Brian.

Operator

from O'Cull come Stifel. question next ahead. Please Our go will with Chris

Chris O'Cull

but questions been Hey, answered, think in several sales I closed follow-ups. for nine thanks. that of you the a been rebuild One to couple Steve do to had past going was, of be my Most the it's have stores months? have difficult

Steve Hislop

that's possibly take Chris, at the those visiting also going to them. to those make everything last understand time, that opportunity in going on to based in I think, the markets competition changes not tough in really be to we'll make them. we'll have this look told or a sure but those them. hard looked We're build, markets Again the you we I to a and as only not fourth as at I'm open decision we grow happened marketplace quarter,

stuff. at we look all that So will

Chris O'Cull

fourth third was the expect should mix end And then Do for know cooler weather? which patio the on guys the XX% then we up year-over-year. to with abate in I the up have XX%, And running I quarter? think the the last were Okay. of an quarter that tailwind sales quarter at from patio you update

Jon Howie

Yes.

at last quarter third year. quarter XX.X% we that's for and the compared at X.X% the to So were about

So we've seen a significant increase in that.

you look quarter to jumped period If the that fourth and the period period actually at XX into up XX.X%. XX, first

out some we're Southern days be seeing the definitely in So patios, still in markets. the decent to

like the continue we we come that winter the done put heaters may lot get into so extend heavy to But there Obviously, we've We've out things of that to that when to we've things that but season. that. patio a extended extend And patios build and then back bit. patio. a little

but happy back come So know do are winter the we that in we months could where bit. pretty that a we're little

Steve Hislop

January the and of February. December, Specifically, beginning in

Jon Howie

Yes.

Chris O'Cull

Okay. guys. Great. Thanks,

Jon Howie

it? that Is

Steve Hislop

Operator?

Operator

session. sir. would go question-and-answer turn concludes over Steve This like back I to the ahead, closing our remarks. conference to Hislop Please for any

Steve Hislop

Again questions. any appreciate and Again, much. thank Stay evening. healthy so thank and and answer good you your continued interest a available have in be guys and always Chuy's will all you. I we to Jon

Operator

has you today's conference concluded. now presentation. Thank The for attending

You may now disconnect.

Chuy's (CHUY) 8 Nov 202020 Q3 Earnings call transcript