CHUY - Earnings call 3 2023 | Chuy's Holdings, Inc.

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Operator

Good day, everyone, and welcome to the Chuy's Holdings Third Quarter of 2023 Earnings Conference Call. Today's call is being recorded. [Operator Instructions]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. Please go ahead, sir.

Jon Howie

good and operator, you, afternoon. Thank should By quarter to third access earnings now release. everyone XXXX our have If can our in of the need not, at remind our Investors website it to include section.Before be discussions found today we forward-looking that begin everyone formal will I our remarks, part on statements. chuys.com uncertainties not actual subject are on them.These reliance to not statements future to forward-looking from expect. undue risks guarantee of what cause performance, are put also that and differ materially These a therefore, results numerous and you could should we statements all We future condition. filings the operating detailed you risks refer a of financial and of SEC to our discussion our results for recent that impact could more

XXXX, release fourth out earnings plan that of and like we of the to ahead, way, Hislop. Steve Looking President turn to our Chuy's market over after the I'd CEO, call close.With February quarter XX, to XXXX on Thursday,

Steve Hislop

everyone, on you Jon. thank for Good you, us afternoon, joining Thank today. and call our

a to level operations. our last representing our team's dining as XX.X%, demonstrates and gain restaurant efficiently with has comp casual effectively year. during profit and a pleased solid Equally restaurant a in margin performance to This strong X% increase X%, we of value and maintain are performance execute share.We to sales of to exceed across traffic dollars peers also over gap quarter, positive continue all point with ability broader including the highlighted revenue further an peers our basis increase important, drove improved periods. of comparable allowed the a ability We improvement X-wall result our XX.X% profitability level growth XXX industry-leading by over growth our to relative third our

was proud able are to quarter. the accomplish our team during what We of

you that, in on year, top update profitability.With the to growth line As drivers. we put and progress our have various will of continue look towards the let to make place drive on end the we me initiatives we growth sustainable

the focus Knockouts team's Burger, on Bowl, to Tinga restaurants.To allowed Enchiladas, menu incremental Chicken guests keep Hatch Ribs and top combo quarter us are driving build successful item, barbell one Steak has CKO our adding Chuy's we offering. to during introduced slight or In like along innovation the platform traffic we resonating Memorial generate October, next offerings to our most and as avocado our a CKO CKO momentum higher-priced with our approach Chile mind, and items Presley Our of a menu CKO and Braised with Elvis to campaigns Green upon Burrito of late Short first with this our our the twist clearly with offering. stuffed

also quarter, by as approximately We at are sales quarter, to thus was with at which the we last enjoyed off-premise the channel, to compared channel continued our mixing far.We pleased of the total solid an strength during our from early mixing -- feedback delivery the process of total well performance X.X% our last approximately we from with of partnered XX% XX% encouraged further point quarter are increases recently Similar with another basis and XXX all the year.Catering performed in to mixing to year-over-year versus our sales, third of ahead, ezCater basis opportunities last the sales. currently XX.X% on XX also catering rolling of a restaurants. are points capitalize increase out platform the To of year.

marketing long term.Turning in channel catering at to will off-premise mid-XXs our with least to X our of the total remain believe to sales sales approximately continue initiatives. X We contributing of

Uber. scratch believe advertising yields advertising DoorDash to in and our best food Chuy's the to to with the organic We to restaurants.Finally, campaign YouTube to from differences, this and optimize defining we Ultimately, results our an development and media marketing our differentiated effort at CKO digital our communicate offerings and exciting continue to using like effectively Google, and influencer provide content, TikTok, from would including our overall plan. Instagram, every our drinks Facebook, I promotional made from video update value experience incredible approach

our quarter, During Texas, total Harker restaurant of XXX. third count Heights, we third the successfully the in opened restaurant our year to bringing

Due markets one also restaurant inspection restaurant January.As are is construction X on track Braunfels, will additional Texas with look initially restaurants now focus our are for to December, We on forward in our for a fiscal towards and XXXX, are to of X the expected to openings open to a delays, open open December expecting open concept late we new fiscal we new now New awareness. total delay of end continued where The openings to to very likely XXXX. growth and generally the to over with of to in that, Overall, opening third brand turn performance our to will development results our of greater remain the AUVs Howie, recent this and end move in ahead our our New will range. are CFO, Jon about higher pleased excited the Braunfels call detail. of our proven brand.With quarter high for our with discuss I opportunities the organic we X target

Jon Howie

quarter offset in additional quarter during X,XXX XXXX by total, year. year, Revenues the last average the third million related X.X% a to increase restaurant were of of operating from partially million check, The and operating average the new growth during X.X%. ago. by had our increase sales the customers. as in total weekly same XX% in restaurants third of in for opened was to quarter increased restaurant the Steve. we revenue decrease approximately to driven an a XX% versus XXXX.In approximately quarter as third X.X% weeks subsequent pricing Thanks, approximately $XXX.X to primarily XX off-premise quarter the was well quarter as X% compared Comparable third weeks year increased Effective sales sales of a the compared X.X% $XXX.X comparable last primarily to

the third deflation quarter year. to sales of of single-digit increase revenue menu hourly at for amount to expect pricing the as same basis current low the quarter market approximately we inflation points to year.Turning last well expenses. commodity at restaurants, XXX overall percentage of of of last comparable year.Labor held compared the XX.X%, offset to the for revenue subsequent fourth deflation conditions, which third commodity due well as a the of year menu last about Cost percentage by of the of as leverage carry as quarter price as as on on during to expect year. Based driven to by approximately the taken labor a taken a remainder quarter decreased We now as the was of subsequent fiscal XX.X%, price X% primarily X% to costs steady

fiscal compared the year, higher premium, million lower $X.X increased $X.X administrative bonuses. million continue by service of maintenance costs a partially from year.General year in and third We an quarter.Operating XX.X%, higher as period to costs sales, digits driven by as in in increase charges for restaurant basis offset and an last mid-single to inflation of hourly costs expenses and quarter the million the performance-based last mainly fourth and insurance same to in by utility increase in delivery to revenue delivery driven increased percentage expect from the labor higher points XX $X.X repair --

$X.XX per million to share million third $X The $X share or million compared to other a third in compared $X same As same or the on or last $X.XX was primarily period diluted million last for during liquidity previously reduction XX.X% diluted incurred quarter share income the compared diluted million diluted that income sheet. per diluted a increased to to to balance restaurants. increased we per the account, diluted last of or $X.X XXXX share the per $X.X quarter or G&A in $X.XX same third period or adjusted year.In quarter percentage million X.X% million for per in summary, rent of $X.XX XXXX, related same closed or the XXXX or period our the year.During $X.XX closed of to share to and year.Moving revenue, from million the Taking in $X.X net net and into share per $X.X $X.X impairment decrease restaurant period year. paid of $X.XX costs in X.X% to last XX% increased

As credit facility. revolving we equivalents, $XX.X cash had debt and in under quarter, the available end no of cash our million million of outstanding, the and $XX

approximately We And XXX,XXX million. common the shares during also year-to-date, we purchased of of million. our $XX our shares $XX quarter of stock for for total of a total XXX,XXX common stock purchased a

provide of outlook. repurchase which program, of expire under let $XX the on XX, XXXX.Finally, on we quarter, million an our remaining million end update the $XX December had will our me As

$XX share, per versus per weeks fiscal impact an which the of is in expense EPS of to we outstanding million.With $XX XXXX, the million part fourth $X.XX expecting For $X.XX adjusted annual containing over to to XX annual per $X.XX share, This share annual the approximately million back that, diluted million, shares restaurant effective $X I'll of of of XX%, to to to $XX to call Steve. X million restaurants, XX% approximately of capital million, to million to $X.XX again, are weeks XX based of net XXXX. expenses $X.XX expenditures estimated assumptions.G&A on million, and approximately weighted $XX $XX.X XXXX $X.XX to $XX following tax preopening due positive turn quarter in new $X.X now includes rate

Steve Hislop

strong. we believe Overall, fundamentals remain business Jon. Thanks, our

energized and path experience open long-term provide our to to value questions. of unit when Operator, excellence, with a shareholders.With our eager one any allocation lines questions. solid for the Chuy's With on X-wall they restaurants. our remains guests capital operational of are they unique pipeline we and come team have maximize focus visit Our we have expect Chuy's please to for a to disciplined answer put on our growth, happy that, continued

Operator

first Stifel. question Chris from Our Instructions] comes O'Cull of [Operator

Christopher O'Cull

last guess slow. has the growth performance. of in check to I has to quarters started question the relates of been couple rate my traffic negative Traffic and

company to spending the So to Or environment? I'm I you going specific happen think can traffic mean, do And that better curious, needs to is are there deliver reverse a just what it just that gains? require initiatives decline? consumer

Steve Hislop

Chris. question, Great

to looking pretty seen we're where right we with definitely roughly X.X%. have about to incremental XXX As our during good we're And X% -- feel initiatives. we going CKOs our food of bumps now,

and we staying need we there. out it really on And that. messages CKOs is again, the down. just And think our have amount And proper course. But our what think we'll of stay focus think amount of inside walls about our differences. getting continue then operating really out heads proper and main, really course excellence we defining So execute our of rest that to our to the the I keeping the of continue I X that's stay main kind just and is on to

Christopher O'Cull

know than I guess, if cost cost. And then, a a labor -- was Jon, you costs at only percentage look had I as it were flat was the at a week, lower I sales rate operating up, But inflation. labor year-over-year. wage about question of up the per

So improvements has to the there try to labor any system? anything the costs you or changes guys are are keep doing labor company Or to tight? made management

Jon Howie

No. entree store. that are I We have transparency mean, are the hours the great the of that do spent same. of per more doing per spent kind and we're into hours

decreasing We dramatically well. and the in thing has of better continue it. as overall inflation helped to other and of at that kind in look We've we're overtime, is doing overtime, too the manage a -- labor that job which

Christopher O'Cull

a left of overtime? Do you there's think in lot terms reducing

Jon Howie

not but much. bit, little A

that think taken lot we've gotten I of out we've fully a as staffed.

we're mean, grow, some where we're think we're efficiencies pretty I are. happy where we that probably gain are I I we'll we There I sales think happy but think as pretty are. So --

Operator

of Todd Company. from The comes next Brooks question Benchmark

Todd Brooks

this idea average, of kind to have infilling intense the years talk strategy through But Chuy's look lead to with more we're off just last in and of growth wanted of at stores back maybe have we cadence. last relative and openings know unit productivity produced awareness of kind kind an on, of of back you you the normalized of as how into of the those on markets? I First, corporate can I couple couple lagging if look classes, a can

Jon Howie

were great at performing where at least AUVs X or expectations basically considering Todd, states little average. Yes. those better the of expectations are question. than better than better better the that And company than we're our our our or and a expectations, in

with the been fruition. coming it's pleased we've very to strategy So and

Steve Hislop

X next And near continue Yes. strategy to the the the we'll definitely, for years. X future,

Todd Brooks

to for look the I view had, contracting is you. is can you a as has start But out kind question on fix of items And that QX Jon, for that benefit and the there looking like a on? to you looking items? of it's contracting Second know there been in here, kind I still any pricing 'XX, contributor deflation what's how window?

Jon Howie

Yes.

We basket. to at but a XX% we continue the now, contracted there baskets commodity most commodity We're quarter pricing to than now, biggest about I paying extravagant. out and beef. total strive a Right little to think, more of XX% contract are that's inflationary through first little on our driver, past what that the is not

with very pleased we're that. So

beef from So the tell, but commodity year with, it's it's too some more offset going and inflation standpoint, a really cost things. by to normalized early to in next I be overall, the think obviously, other inflation

Todd Brooks

for in then one back And last the guidance. jump queue. I'll Thanks updated and for me,

fourth same-store the sales $X.XX quarter What Chuy's? Just or trying to that a of assumptions either imply kind for traffic sense $X.XX the guidance. in for assumption does to get of

Jon Howie

out I if the in in uncertainty you XXX points what's because was given release Well, our environment fourth some rolling quarter and of the as out bigger the the matchups, in will, Uber we spelled going over XXX basis quarter, there. to implementation there have of on, that we approximately mean, which are fourth we

matchup So quarter. in a fourth going the be to that's going higher forward

think comp up. little the but a remain will to here, sales it be a I will on solid from So from flattish basis,

Operator

comes question James. Vaccaro Raymond from next Our of Brian

Brian Vaccaro

back you you're a go any quarter? through on you to cadence you you Could Could update provide the perspective just what on the little quarter-to-date? sales. provide the And can seeing more saw that

Jon Howie

Sure.

about was I'm it X%. X -- was the -- at quarter sorry, Steve. started out it So

Steve Hislop

right. sales it's August as was and about our X.X%, X.X% was quarter. X.X%, as the September Yes, all around July throughout far was cadence

Jon Howie

overall October in seeing in in And what we're here flattish, October down is comp. slightly

Steve Hislop

our of key on rolling part improvement And in DSPs Jon was delivery we as just mentioned that basis partners. a that, over point XXX mentioned, the

Brian Vaccaro

Jon, expect what compare us talk cost 'XX. could the plans to thinking pipeline you you're impacting real Can curious to also that in Steve, and that's remind you about maybe just average the the XXXX? And be just 'XX, build-out to I'm And might your that how strategy estate into you employing? how

Steve Hislop

go Why estate the don't real you strategy? over

Jon Howie

Yes.

obviously, higher the probably we, than cost to XX% build-out as was So the you is know, about it right pandemic. now, prior

were Now development doing to we're site of to the prior versus delivered work also like getting land site, work the the in pandemic. we curbs

as costs some added that's So well.

are properties increase XX%. back buying $X combat doing probably our the properties, our looking us rates to that to So it development. leaseback the returns ROI and situation future, this cost is looking that in at is we've the million land overall at you're a in of gives cash of given $X.X a cap million land we sales cost and flexibility got to our some buying range.What we're to do the since doing any development in little recapture way, then real cash-on-cash And when estate lot doing that those come overall down, our and the in to a that get

Brian Vaccaro

do of Okay. you currently And can remind pieces many own? That's you land how us great.

Jon Howie

around half XX% purchases. I what X% about -- to think about right 'XX we're of think opening half And currently. are I in it's

Brian Vaccaro

last And for one then me, I if just may.

comment? you did have Sorry, a

Jon Howie

No, go ahead.

Steve Hislop

No.

Brian Vaccaro

on big picture little cost, labor Just of bit. kind a

need the think would of say, or so get And question that I post-pandemic where is into we think this now I in low for guess XXs, are the that in that new low range. you've the to most still level be been period, line? at you XX% of level say, the thinking is, range the the or point investment in a XXXX, late hours make XX% normal? XX%, there the might Or you

Steve Hislop

it. appreciate I Yes,

quarter in, in our is lowest the fourth. Going index

range Yes, would in is XX-plus be. that are XX%, probably there. right So objective XX.X% our what in we probably

Operator

Our Securities. next from of Nick question comes Wedbush Setyan

Nick Setyan

rest As just into we think wrap Uber enumerate going the maybe QX you you about the comp drivers Eats the comp can forward, for 'XX and drivers as of rollout?

Jon Howie

our has and been say Yes. would obviously expectations drivers are each catering. of the Catering quarter-on-quarter. kind exceeded I X main

close in year catering. So last we did X% to

are well main also X as this we fourth fourth the the continue surpass upping drive quarter. the advertising in as I think spend well. factors quarter growth. that our our incremental And Those will in to we're year as CKOs then

Steve Hislop

gift also really obviously, the getting with into Along through a of card holidays. time great the season,

Nick Setyan

expect marketing QX? you in do be to expense the What

Steve Hislop

On into added break I for the but for X.X% year, year, whole the about the down into it about will fourth that X.X% third quarter. -- for $XXX,XXX the

Nick Setyan

of Can sales? next as we marketing as well see a an percentage uptick in year

Steve Hislop

you breaking Nick, bit. that a little sorry, Can again? of up I'm you're kind say

Nick Setyan

Can uptick we in sales -- see percentage a of sales an as as as marketing year a in next well? of percentage

Steve Hislop

right still mean, going that that around I No. we're budget to No. X.X%.

Operator

Tyler comes Our next from question of Stephens. Prause

Tyler Prause

some to would maybe how spending relate patterns thoughts earnings or in level season love that normalized this during pre-COVID. get of on to I income similar reflecting seasonality to a industry cadence return of restaurant as peers as management? down a that your cohort far by called and might So you're your what mixed the out trade to and seeing trends that

Steve Hislop

to first of us, somewhat was we It Right year. this didn't pre-COVID say normal back was now, felt we That's I'd and our it year, the throughout for last time until in days. normalized some -- saw were get starting cadence similar to XXXX. quarter, same the that to the we very quarter we when fourth normalized felt get

Tyler Prause

year about far as And how guidance, should that the going G&A as we fiscal into 'XX? think

Jon Howie

XX% that. bonus. right is of a Probably normally our as the from G&A budget at more next flat growth. look got to perspective now, on year, G&A target And we we it's just kind to do Sure. little What about a of bonus on more adding performance-based try store basically we

year. the maybe at X% about look on can G&A you next to adding for So

probably what going or the extra -- flat it's However, bonus on next is this year. it be bonus to the with target year there, with with

So G&A use kind you you're that the for on can quarterly next basis year. seeing cadence of a

Tyler Prause

I in. And just here, one sneak if last one it could

the sorry, in guidance we think as about fiscal -- that the for as year 'XX? So appreciate G&A far the quarter I fourth how should D&A,

Jon Howie

a as percentage basis. I as it far take As it percentage trended or? would trending mean, a it's from I I D&A, on mean, -- standpoint just

Operator

Baird. Drew question from [Operator of next Our North Instructions] comes

Andrew North

the line level first though tailwind. margins. there QX My providing cost expect improvement favorable, you the nice to of again, in sounds Is costs on sales contextualize one just It as QX? way very any of or restaurant margin a is should remain commodity

is margin think could as and we puts in similar should year-over-year right the to other takes guess, relates I a it to saw we see So as it we level Or fourth of expansion QX? any quarter? consider

Jon Howie

the probably in Yes, Great sales cost. operating for quarter see fourth a offset the little to it's we're like going in to that's that think to because question. question, not the higher going higher labor be cost as you're thanks I favorability going more see -- and to going quarter as well first the of

And way may looking so kind margin. last we're it year's of the flat be at to it,

XX week to extra get on adding basis that far as extra on to that XXX to relative we that weighting about the weeks However, points as theâ€¦

Steve Hislop

XXrd week.

Jon Howie

week get the XXrd points. XX The on we to expenses, XXX the extra weighted sales on fixed basis

at looking basis XX points to better XXX probably than last you're So year.

Andrew North

total context on as here labor signs, provide for you February? labor to the in it's XXXX guess, ahead the start if next view the and could seeing in informing backdrop looking there that on XXXX, inflation think inflation how to commodities or your inflation increase you one, for and how today? about guard price on out commodity cycle then you're with XXXX year we taking based I rails should And some guess, is Maybe for and inflation relatively fourth quarter. what still I modest

Jon Howie

to tell. Sure. early It's too still way

next year mean going that probably what next more so to year earlier -- don't is see I labor said this commodities from in So we I was be year perspective. inflation. a a that I much year, normalized changing mid inflation but single-digits think from

today. more you fourth we'll numbers. what seeing of when release give again, early, on that's too quarter we But So that it's we're kind input really and our

Steve Hislop

do back increases gave in just usually at probably you X% us with will before you that year get historical Jon it one range, and of February to price will a see increase information COVID when the is our to we beginning price that. X.X% be we of that But and type do

to So I like range. X.X% X% in said, that

Operator

CL Our King. Andrew question next comes from Wolf of

Andrew Paul Wolf

know of to kind side, on effectively the want generalized restaurants a on confidence such of you kind ask that development double can given I have frustrating you longer a just making of just very open? a your the I new question plan contractors up, different nitty sort but and around equipments building boxes actually in of show the getting gritty sure of stacking and terms on permitting term, the environment.

Steve Hislop

we're on this really been has this pipeline X% of I We've that frustrating a strong it comfortable we about. next think really, I to down the that on and we're little back Frustrating year, bit. moving pretty our that really mentioned, high that then road is real few the though, further range Yes. talk feel year, with years. for to the worked hard X% looks Braunfels said, I New end Like comfortable

we that's what did. So

So down road a of again, these. we're think I in lot the

feel So we the feel X%. pretty good about X% to we --

Jon Howie

feel And growth still good 'XX. into solid XX% getting that XX%, back about getting to back in we

Andrew Paul Wolf

I and as other Uber guess on that Eats. follow-up And in Okay. October is partially lapped my the September? fully a thing in

Jon Howie

It's basically XX. week

after QX. end slightly and just quarter So

Andrew Paul Wolf

Okay.

businesses slightlyâ€¦ my XX% flat sequentially a about of So the dining if of bit that's if delivered a -- the like rate that's that is in the actually the actually business in-store math versus X, like is at exit flat improving right, gone does or an doing not business is -- something little mean

Jon Howie

We're little on of seeing a bit improvement that.

quarter. for also We fourth the

Andrew Paul Wolf

The industry.

Steve Hislop

Yes. Yes.

Andrew Paul Wolf

Okay. to sure can understand I I'm trying just that. make

Okay.

else? something saying you were -- were You

Steve Hislop

fine. that's No,

Operator

end like closing have I we would over call question-and-answer today's session. to and Steve Hislop remarks. now back the turn Ladies Mr. for reached of gentlemen, the to

Steve Hislop

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

Operator

and concludes you that now your attending, may lines. for Ladies today's Thank event. disconnect you you. and Thank gentlemen,

Chuy's (CHUY) 2 Nov 232023 Q3 Earnings call transcript