Earnings call transcript Q4 2022

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Operator

And welcome to the Chuy's Holdings Fourth Quarter 2022 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 your questions following the prepared remarks.

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'll turn the call over to Mr. Howie. sir. ahead go Please

Jon Howie

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

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

I'd President call of the like the turn that CEO, With and way, out to Chuy's Steve to over Hislop.

Steve Hislop

Good Jon. thank growth Such the call us repurchases our our ongoing of afternoon, and you, sustained the top-line by driven efficiencies. complemented by Thank capital continued and shareholders our to through joining by our our earnings operational model. We're proud quarter organic fourth today. results was you on return enabled operating for quarter for strong everyone share of strength

how the has choose behind January. we continue guests comparable growth into drinks growth to driving are and sales momentum the value an and quarter, our guests across of made-from-scratch our brand. incredible with strong to fourth access saw periods the force our regardless believe continued at our food and our During importantly resonate We fresh all

growth menu our We'll innovation. to with drivers. Turning start

period menu Chuy's We limited first through new last noted launched plan guests As while offer Chuy's October. Knockouts guests to for specials of platform offer we a for also time. time. we once favorites per Chuy's old to our quarterly introduced Knockouts six-week exciting in innovation, our reintroducing quarter ever limited to Knockouts our a time to call,

I'm mixed of thrilled entrees six-week first that drove CKO X.X% the sold approximately period. traffic during and report all our to incremental at

the not while did these brand weeks guests consumer term. to time still resonates and our is to the intend determine as confidence giving longer off with long-term. what continue with encouraging us platform to period the do with CKO you the offers results platform latter in are of best in limited CKO the the we many reiterate and and new we Importantly, to the trail That see in experiment thus demand increased said, platform

fan CKO, well Following our new the saw Veggie Beef return as success Tacos. Wild of Hatch as our of a an our introduction favorite January and first of late Burrito Enchiladas

period, we've the we're weeks CKO are thus While into seen about three results the we far. only excited

turn we Next will off-premise. to

their own Our off-premise, of Chuy's opportunity approximately this represented momentum our for off-premise drive home. as the with continued the from quarter. high-quality XX% which the to comfort delivery food total growth helped The of of embraced made-from-scratch enjoy growth channel consumers our sales

of of to We catering the our rollout several system-wide. also sales. further have out X.X% new represented continue program other approximately catering annual to Catering in our the of to opportunities sales expand fill almost and complete markets fourth XXXX existing markets X% quarter and in our

sales approximately will contributing with off-premise represent over low of X% catering We a continue to our time X%. to to mid-XXs believe that

DoorDash. the on influencer on of Finally to TikTok, partnership our Instagram, use advertising media, a promotional video heavy programs organic in of put including continue YouTube digital we terms advertising initiatives, with marketing emphasis and

restaurant. returning unique our communicate new with to our effectively the our help incredible and every overall drinks newly introduced offerings new have connect will value our allowed these we initiatives made-from-scratch Chuy's us defining both and from CKO believe initiatives to an guests. and website with differences food offered better Along experience These to at us at

profitability. to Moving

a focus XXXX. restaurant-level and achieved double-digit Our point operational representing XX% ongoing labor improvement basis in high-single-digit and on despite XXX We efficiencies a these cost results management over commodity margin, operating resulted inflation inflation. strong

Looking XXXX, end consumers solidifying to X.X% January strong of took this believe at approximately our the well is our value level to proposition as profile. pricing. an appropriate margin at our We balance as

reevaluate on as environment. made any for the We macro and year not additional any pricing decisions necessary have actions the given will

Lastly, the update let you call on development Jon, turn before me over I our to plan.

of during the the to markets Texas new our restaurants year. and fourth successfully on in quarter, two total bringing opened Tennessee core our development During we restaurants three

already We desirable had at year. term more lease developed area. one another for XX a at In as we end restaurant also have we in restaurant location its the total, the the closed end trade fiscal of of restaurants

expansion. look excited ahead, organic are through As brand we the opportunities we about ahead the growth unit accelerated for

seven a to March. is and includes restaurants, which Fayetteville, open focused markets developed now February, is to AUVs This consisting pipeline concept Arkansas late high new our slated with of we've XXXX, awareness. restaurant, proven For robust six our where early brand on in

detail. will discuss call With Howie that, turn Jon now over the to to our fourth I results in quarter CFO, our greater

Jon Howie

XX% subsequent In operating revenue. the X,XXX quarter additional total, XX total our was new And to to improvement same fourth primarily had the we Steve. compared to from million increase of X.X% of $XXX.X restaurant to approximately as an restaurants last quarter revenues approximately the $XX.X year. The of quarter million fourth off-premise fourth related well and comparable XXXX during as opened the were in XXXX. weeks for sales Thanks in increased quarter operating weeks sales

last sales pricing to driven increased just in during sales fourth X.X% quarter X.X% in of X.X% a restaurant increase average year, customers. weekly in X%. quarter by was XXXX, the a primarily comparable shy Effective Comparable versus partially by check, the offset Compared average X.X%. increased restaurant decrease

with XXX beef chicken offset cost well in as increased percentage Turning basis taken our produce fresh revenue commodity inflation grocery line as of sales price Overall, items. points approximately XX.X%, increase expectations the cheese the an year. Cost of during and by at by XX% partially to to and of expenses. menu during the and driven quarter a in was as

approximately the first in condition, XXX for market current last compared primarily XXXX with to Labor as improvement we high-single-digits costs, as as due approximately of hourly XX.X%, commodity year. inflation quarter. well the fiscal of currently percentage levels are revenue, for hourly inflation expecting basis on mid-single-digits points Based increased to a to labor restaurants an at staffing as comparable our X%, of

menu during taken by increases offset year. partially was the price This

with hourly first quarter, the year-over-year for addition inflation XXXX increases. currently We for are to expecting a mid-single-digits high-single-digit labor inflation rate continuation in of a of level fiscal staffing

higher insurance revenue costs Operating in utility cost, credit delivery fees. costs, restaurant percentage to a maintenance of well pressure charges as card XXX and as continued XX.X%, supplies to-go and on other including inflationary due repair basis to premiums as points operating increase increased expenses and

Marketing percentage as of basis digital X.X% the expenses, reinstated nationwide. as a revenue, points company increased advertising XX to

Our a decreased result of points XX percentage revenue of occupancy X% on as occupancy basis sales costs. fixed costs to leverage as a

well the cost. driven from in by $X.X the higher salaries as in administrative travel as expenses an in and million $X.X quarter increased company period year, increase public same General million last fourth management and

of at G&A held percentage As a steady X.X%. revenue

in period million million In $X.XX or year. summary, same or compared was the diluted quarter $X share per per income for to diluted $X.XX the net fourth XXXX $X.X last share of

in same non-cash XXXX, the the or closed per partially diluted quarter previously long-lived income compared During or in $X.X diluted of adjusted million restaurants. The period was share in per $X.XX of fourth XXXX year. underperforming primarily quarter the fourth on diluted compared same to costs the loss to last $X.XX share period diluted offset assets per million $X.X paid Taking or a rent by impairment into million and incurred was closed an $X that year. restaurants account per increase for we XX% share a or of reduction to in net related other on $X.XX million restaurants $X.X last share

and liquidity sheet. our balance to Moving

$XX and our of the facility. no had million As million of of from cash availability the end in equivalents, credit we debt quarter, cash and $XX

As we $XX million and repurchase stock million existing during total shares of a our quarter last purchased for approximately the XXXX, XXX,XXX call, mentioned completed our fourth $X.X we on program. our of of common

In million of $XX also effective approved program has XX, repurchase new repurchase Board common to the October with share shares. another a authorization our that, XXXX conjunction with an

commitment of company of to We As the ongoing the program. shareholder long-term had position that XX, December XXXX, $XX remaining new value. demonstrates million believe our our and financial further under strength this

in fiscal containing our XXXX assumptions. part positive annual of per quarter currently per This of share, based on to impact the is outlook, $X.XX XX which estimated the Turning expecting versus includes $X.XX $X.XX share fourth $X.XX XXXX, to weeks an EPS XX to normal weeks adjusted the we in to XXXX. are following

capital shares expenses to approximately of $XX to and million of rate $XX XX% to of million, shares. of million weighted expenditures $XX effective to expenses $X.X net effective six million, approximately outstanding annual restaurant million to of rate approximately $XX pre-opening G&A million $X -- of annual million, XX.X tax new seven restaurants, XX.X annual diluted million

over I'll that, turn call to With the back Steve.

Steve Hislop

Chuy's focus remain ahead plan, on with allocation fundamentals positive disciplined positioned momentum accelerated growth capital shareholder with on on path of our maximize excellence capitalize the Together unit vast combined our beyond. This company believe business us. to a XXXX our opportunities put value we've strong. four-wall believe We and and operational Jon. Thanks we our our have to in and

answer please open for are questions. that, questions. any to happy With Operator, line we the

Operator

Thank you.

be a our Mary ahead. Instructions] will Baird. with of [Operator from We question have conducting We line the question-and-answer now Please session. Hodes first go

Mary Hodes

afternoon question. taking Good the and for thanks

indicators have share the First, willing comp? on remarks seems that willing well. But a suggested on improved to may the have update experienced specific broader comps It QX? wondering specific and be date if to to you'd you quarter-to-date share would tracked be in update you prepared as industry like how a your have

Steve Hislop

Omicron. think with mean I the everybody over we're I else, Well, rolling

rolling I Omicron. yes, double we're up in period, just first mean So, digit because they that the over were

Jon Howie

little And of over ago. period, worse a have a a little over year the although much we we ran Yeah. ran second weather, did we bit in a weather

Steve Hislop

But back they're to line… coming

Jon Howie

Yeah.

Mary Hodes

Yes, be outlook sense. to the it share that willing provided? makes assuming sales also in would you XXXX you then And you're for same-store what

Jon Howie

this at time. Not

Mary Hodes

Okay.

Jon Howie

the in digits, low low mid-single be It'd digits. single to

Mary Hodes

in XXX you digits like comp? I out to mid-single cost I you think second how that previously the year. Thank you. talked Does the thinking restaurant look the are you to delivering that could still based And returning laid in how it level about be possible? then XXX basis points about XXXX that in guess, up that pricing, shapes expected of on at the of half margins, inflation

Jon Howie

also and I high labor up the yes, said remarks, inflation second half kind mean back in the tone to of of looking year, our the half we that of at in and we're of sales the especially digits into down the In single year. cost like in

and kind looking cost in digit. we're mid-single labor of that So, sales at of

what we're flat So could we given a at talking about see little kind to can leverage. increase, in are sales of we down, if some that we're price higher get margins looking

Steve Hislop

Yes.

Mary Hodes

you. Okay. all from Great. That’s Thank us.

Jon Howie

Thank you.

Operator

Thank have go with the question next Please you. Chris a Instructions] ahead. from of O'Cull Stifel. [Operator We line

Unidentified Analyst

the Hi. taking for This Zaki is [ph] on Chris. Thanks for question.

like drove you the quick a on take what to that looks some It your shape you what just openings end XXXX. you lowered year? of Just for guidance the and the throughout give unit top us Could add decision expect question. color

Jon Howie

said and six-plus in just there. the what category thought time to the And prudent Taking to the was with a of two and always I spent the in chain increase that that permitting to get were waiting in range. for think with, very push six to of back. we Well, that range, comfortable them that we end dealt we've XX% over Yes. always range quarters, in last and on some things construction specifically, XX% costs seven at we we've low look it said supply

quarter-to-quarter. the year as at you look pretty balanced the our of of Although, throughout openings this year, a openings some attack you'll see

do actual the be supply But mostly, they'll second done. the that the we just So expect in half permitting, relief chain, the and to evenly it's see some cost year. honestly pretty of the

Unidentified Analyst

Thank you taking to Understood. you're commodities the or I decision-making And on know, appreciate when specific you. potentially us of commodities kind that it is Could of your of guidance what contemplating another there? inflation kind outlook. pricing anything drive your let comes outside might question commodity

Jon Howie

of something this goes throughout price the particular forth second approximately so year unless I mentioned the anticipate now, Right -- now, increase right at rest year. script already X.X% about around kind that we Well, the contemplating at year, taken which as in for and our that of being period beginning the of don't price of time. three crazy the our we we've our

Unidentified Analyst

you, Got much. so it. Thank

Jon Howie

welcome. You’re

Operator

As you. over this time, to Hislop, questions further there for [Operator to the at Over turn participants floor back comments. Instructions] I'd Thank from no are the closing you Steve sir. like CEO to

Steve Hislop

in you. any you, much. Jon evening. Thank interest and thank are And and all a have Chuy's so questions. answer continued and and Thank appreciate available your to good again, I you

Operator

gentlemen, this and Ladies you. Thank today's concludes teleconference.

time. disconnect for participation. at may this Thank your lines you You your

Chuy's (CHUY) 16 Feb 232022 Q4 Earnings call transcript