Chuy’s Holdings, Inc. (NASDAQ:CHUY) (the "Company") today announced
financial results for the first quarter ended March 31, 2024.
Highlights for the
first quarter ended March
31, 2024 were as follows:
- Revenue was
$110.5 million compared to $112.5 million in the first quarter of
2023. Revenue was negatively impacted by approximately
$1.8 million as a result of a one-week calendar shift due to a
53rd week in fiscal 2023.
- On a fiscal
basis, comparable restaurant sales decreased 5.2% as compared to
the first quarter of 2023. On a calendar basis, comparable
restaurant sales decreased 4.3% as compared to the first quarter of
2023. The Company estimates that calendar basis comparable
restaurant sales were negatively impacted in total by approximately
115 basis points from unfavorable weather conditions and the timing
of Easter.
- Net income
decreased $1.3 million, to $6.9 million, or $0.40 per diluted
share, as compared to $8.2 million, or $0.45 per diluted share, in
the first quarter of 2023.
- Adjusted net
income(1) decreased $1.3 million, to $7.3 million, or $0.42 per
diluted share, as compared to $8.5 million, or $0.47 per diluted
share, in the first quarter of 2023.
- Restaurant-level
operating margin(1) decreased $1.4 million, to $20.8 million as
compared to $22.2 million in the first quarter of 2023.
Restaurant-level operating margin(1) as a percentage of revenue was
18.8%, as compared to 19.7% in the first quarter of 2023.
- Cash and cash
equivalents were $56.4 million and the Company had no debt
outstanding with $25.0 million available under its revolving credit
facility.
(1) |
|
Adjusted net income and restaurant-level operating margin are
non-GAAP measures. For reconciliations of adjusted net income and
restaurant-level operating margin to the most directly comparable
GAAP measure, see the accompanying financial tables. For a
discussion of why we consider them useful, see “Non-GAAP Measures”
below. |
|
|
|
Steve Hislop, President and Chief Executive
Officer of Chuy’s Holdings, Inc., stated, “In the first quarter, we
experienced the same weather and macro challenges facing the
broader restaurant industry leading to top-line growth that was
below our expectations. That said, we were encouraged by the
sequential monthly improvements in our underlying trends as we
moved through the quarter, when adjusted for the Easter calendar
shift. In addition, we continued to see growth in our off-premise
business as consumers embrace the opportunity to enjoy Chuy’s
high-quality, made-from-scratch food from the comfort of their own
home. Finally, despite top-line headwinds, our team’s continued
focus on four-wall operational excellence allowed us to deliver an
18.8% restaurant-level operating margin which remains among the
best in our industry.”
Hislop added, “Unit growth remains a core piece
of our long-term growth strategy. During the quarter, we
successfully opened one restaurant in New Braunfels, TX, followed
by an additional restaurant opening in Austin, TX, subsequent to
the end of the first quarter. We are pleased with the performance
of our new restaurants thus far and remain on track to achieve our
restaurant opening goals for the year.”
First Quarter
2024 Financial Results
Revenue was $110.5 million in the first quarter
of 2024 compared to $112.5 million in the first quarter of 2023.
The decrease was primarily related to a decrease in our comparable
restaurant sales partially offset by incremental revenue from an
additional 54 operating weeks provided by new restaurants opened
during and subsequent to the first quarter of 2023. For the first
quarter of 2024, off-premise sales were approximately 29% of total
revenue compared to approximately 27% during the same period in
fiscal 2023.
In addition, there was a one-week calendar shift
in the comparison of the fiscal first quarter of 2024 to the fiscal
first quarter of 2023 due to a 53rd week in fiscal 2023. As a
result of this shift, the week between Christmas and New Year’s,
traditionally a high-volume week for the Company’s restaurants, was
included in the first quarter of 2023 but was replaced with an
average volume week in the first quarter of 2024. This shift
reduced revenue by approximately $1.8 million during the first
quarter of 2024.
Adjusting for the timing of the 53rd week in
2023, comparable restaurant sales, on a calendar basis, decreased
4.3% for the thirteen weeks ended March 31, 2024 as compared to the
thirteen weeks ended April 2, 2023. The decrease in comparable
restaurant sales was primarily driven by a 6.9% decrease in average
weekly customers, partially offset by a 2.6% increase in average
check. The Company estimates that calendar basis comparable
restaurant sales was negatively impacted by $0.8 million due to
severe winter weather across most of the Central United States in
the first quarter of 2024 and $0.4 million as a result of Easter
falling in the first quarter of 2024 as compared to the second
quarter of 2023.
As a result of the 53rd week in fiscal 2023 and
the one-week calendar shift, previously noted, comparable
restaurant sales, on a fiscal basis, in the first fiscal quarter
ended March 31, 2024 decreased 5.2% as compared to the first fiscal
quarter ended March 26, 2023.
Total restaurant operating costs as a percentage
of revenue increased by approximately 90 basis points to 81.2% in
the first quarter of 2024 from 80.3% in the first quarter of 2023
primarily driven by the following:
- Cost of sales
decreased 30 basis points primarily driven by overall commodity
deflation of 1.3% during the quarter as compared to the same period
a year ago.
- Labor costs
increased 110 basis points largely as a result of hourly labor rate
inflation of 3.6% at comparable restaurants as well as an
incremental improvement in our hourly staffing levels as compared
to last year.
- Operating costs
increased 30 basis points primarily driven by higher delivery
service and off-premise catering charges as a result of increased
off-premise sales and an increase in restaurant repair and
maintenance costs, partially offset by a decrease in utilities and
to-go supplies. Our off-premise business increased to 29% from 27%
of our total sales in the first quarter of 2024.
- Occupancy costs
decreased 10 basis points primarily as a result of lower percentage
rent.
Restaurant pre-opening expenses increased to
$0.7 million for the first quarter of 2024 compared to $0.5 million
for the same period in 2023 due to the timing of new store
openings.
General and administrative expenses decreased to
$7.1 million for the first quarter of 2024 compared to $7.8 million
for the same period in 2023. The decrease was primarily driven by
lower performance-based bonuses, partially offset by higher
management salaries. As a percentage of revenues, general and
administrative expenses decreased to 6.5% in the first quarter of
2024 from 6.9% in the first quarter of 2023.
Impairment, closed restaurant and other costs
were $0.4 million ($0.3 million, net of tax or $0.02 per diluted
share) during the first quarter of 2024 and $0.4 million ($0.3
million, net of tax or $0.02 per diluted share) during the same
period last year. Closed restaurant costs include rent expense,
utilities, insurance and other costs required to maintain the
remaining closed locations.
The effective income tax rate was 10.5% compared
to 10.1% in the same period last year. The increase in the
effective tax rate was mainly attributed to a decrease in the
proportion of discrete tax benefits recorded related to stock based
compensation to annual pre-tax income.
As a result of the foregoing, net income was
$6.9 million, or $0.40 per diluted share, in the first quarter of
2024 compared to $8.2 million, or $0.45 per diluted share, in the
first quarter of 2023.
Adjusted net income was $7.3 million, or $0.42
per diluted share, in the first quarter of 2024 compared to $8.5
million, or $0.47 per diluted share, in the first quarter of 2023.
Please see the reconciliation of net income to adjusted net income
in the accompanying financial tables.
Development Update
During the first quarter of 2024, one new
restaurant was opened in New Braunfels, TX, which brings our total
number of restaurants to 102 as of March 31, 2024. Subsequent to
the first quarter of 2024, the Company opened one new restaurant in
Austin, TX, and closed one restaurant in Lakewood, CO.
Share Repurchase Program
During the first quarter of 2024, the Company
repurchased 214,659 shares of its common stock for a total of
approximately $7.3 million. As of March 31, 2024, the Company had
$13.8 million remaining under its share repurchase program.
Repurchases of the Company’s outstanding common stock will be made
in accordance with applicable securities laws and may be made at
management’s discretion from time to time in the open market,
through privately negotiated transactions or otherwise, including
pursuant to Rule 10b5-1 trading plans.
2024 Outlook
The Company currently expects 2024 adjusted net
income(1) per diluted share of $1.82 to $1.87. This compares to
adjusted net income(1) per diluted share of $1.97 or $1.87 per
diluted share, after excluding approximately $0.10 per diluted
share from the extra week in 2023. The adjusted net income guidance
for fiscal 2024 is based, in part, on the following annual
assumptions:
- General and
administrative expense of $29.0 to $30.0 million (on a 52-week
comparable basis);
- Six to eight new
restaurants;
- Net capital
expenditures (net of tenant improvement allowances) of
approximately $41 to $46 million;
- Restaurant
pre-opening expenses of approximately $2.7 to $3.2 million;
- An effective
annual tax rate (excluding unusual items) of approximately of 13%
to 14%;
- Annual weighted
diluted shares outstanding of approximately 17.4 million.
The Company does not provide a reconciliation of
2024 adjusted net income per diluted share or the most directly
comparable forward-looking GAAP measure of net income per diluted
share because the timing and nature of excluded items are
unreasonably difficult to fully and accurately estimate. As a
result, we are unable to assess the probable significance of the
unavailable information.
(1) |
|
Adjusted net income is a non-GAAP measure and compares to the 2023
net income per diluted share of $1.76. For a reconciliation of
adjusted net income for fiscal 2023 to the most directly comparable
GAAP measure, see the accompanying financial tables. For a
discussion of why we consider adjusted net income useful, see
“Non-GAAP Measures” below. |
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|
We report our financial statements on a fiscal
calendar basis. Due to the 53rd week in fiscal year 2023, our
financial statement comparison will be one week different year over
year. However, we believe that reporting our comparable restaurant
sales on a comparable calendar basis will help facilitate
period-over-period comparisons.
The table below sets forth our fiscal and
comparable calendar dates.
|
|
Fiscal Calendar Basis |
|
Comparable Calendar Basis |
|
|
|
|
|
First
Quarter |
|
January 1, 2024 - March 31, 2024 |
|
January 1, 2024 - March 31, 2024 |
|
|
vs. |
|
vs. |
|
|
December 26, 2022 - March 26, 2023 |
|
January 2, 2023 - April 2, 2023 |
|
|
|
|
|
Second
Quarter |
|
April 1, 2024 - June 30, 2024 |
|
April 1, 2024 - June 30, 2024 |
|
|
vs. |
|
vs. |
|
|
March 27, 2023 - June 25, 2023 |
|
April 3, 2023 - July 2, 2023 |
|
|
|
|
|
Third
Quarter |
|
July 1, 2024 - September 29, 2024 |
|
July 1, 2024 - September 29, 2024 |
|
|
vs. |
|
vs. |
|
|
June 26, 2023 - September 24, 2023 |
|
July 3, 2023 - October 1, 2023 |
|
|
|
|
|
Fourth
Quarter |
|
September 30, 2024 - December 29, 2024 |
|
September 30, 2024 - December 29, 2024 |
|
|
vs. |
|
vs. |
|
|
September 25, 2023 - December 31, 2023 |
|
October 2, 2023 - December 31, 2023 |
|
|
|
|
|
Year |
|
January 1, 2024 - December 29, 2024 |
|
January 1, 2024 - December 29, 2024 |
|
|
vs. |
|
vs. |
|
|
December 26, 2022 - December 31, 2023 |
|
January 2, 2023 - December 31, 2023 |
|
|
|
|
|
The following definitions apply to these
terms as used in this release:
Comparable restaurant sales
reflect changes in sales for the comparable group of restaurants
over a specified period of time as compared to that time in the
prior year. We consider a restaurant to be comparable in the first
full quarter following the 18th month of operations. Changes in
comparable restaurant sales reflect changes in customer count
trends as well as changes in average check. Our comparable
restaurant base consisted of 95 restaurants at March 31, 2024.
Restaurant-level operating
margin represents income from operations plus the sum of
general and administrative expenses, restaurant pre-opening costs,
impairment closed restaurants and other costs, and
depreciation.
Average check is calculated by
dividing revenue by total entrées sold for a given time period.
Average check reflects menu price increases as well as changes in
menu mix.
Average weekly customers is
measured by the number of entrées sold per week. Our management
team uses this metric to measure changes in customer traffic.
Total restaurant operating
costs includes cost of sales, labor, operating,
occupancy and marketing costs.
Conference Call
The Company will host a conference call to
discuss financial results for the first quarter of 2024 today at
5:00 p.m. Eastern Time. Steve Hislop, President and Chief Executive
Officer, and Jon Howie, Vice President and Chief Financial Officer,
will host the call.
The conference call can be accessed live over
the phone by dialing 201-689-8560. A replay will be available after
the call and can be accessed by dialing 412-317-6671; the passcode
is 13744783. The replay will be available until Thursday, May 23,
2024.
The conference call will also be webcast live
from the Company’s corporate website at www.chuys.com under the
Investors section. An archive of the webcast will be available on
the Company's corporate website shortly after the call has
concluded.
About Chuy’s
Founded in Austin, Texas in 1982, Chuy's owns
and operates full-service restaurants across 16 states serving a
distinct menu of authentic, made from scratch Tex-Mex inspired
dishes. Chuy's highly flavorful and freshly prepared fare is served
in a fun, eclectic and irreverent atmosphere, while each location
offers a unique, “unchained” look and feel, as expressed by the
concept's motto “If you've seen one Chuy's, you've seen one
Chuy's!” For further information about Chuy's, including the
nearest location, visit the Chuy's website at www.chuys.com.
Forward-Looking Statements
Certain statements in this release that are not
historical facts, including, without limitation, those relating to
the Company’s 2024 outlook, including 2024 adjusted net income per
diluted share, general and administrative expense, new restaurant
openings, net capital expenditures, restaurant pre-opening
expenses, effective annual tax rate and annual weighted diluted
shares outstanding guidance, estimates of amounts and items that
affected comparable restaurant sales, organic growth opportunities
ahead and other statements that can often be identified by words
such as “expect,” “believe,” “intend,” “estimate,” “plans” and
similar expressions, and variations or negatives of these words are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. Such statements are based upon the current beliefs
and expectations of management of the Company. Actual results may
vary materially from those contained in forward-looking statements
based on a number of factors including, without limitation, the
actual number of restaurant openings, the sales at the Company’s
restaurants, changes in restaurant development or operating costs,
such as food and labor, the Company’s ability to leverage its
existing management and infrastructure, changes in restaurant
pre-opening expense, general and administrative expenses, capital
expenditures, our effective tax rate, impairment, closed restaurant
and other costs, changes in the number of diluted shares
outstanding, strength of consumer spending, conditions beyond the
Company’s control such as timing of holidays, weather, natural
disasters, acts of war or terrorism, the timing and amount of
repurchases of our common stock, if any, changes to the Company’s
expected liquidity position, the possibility that the repurchase
program may be suspended or discontinued and other factors
disclosed from time to time in the Company’s filings with the U.S.
Securities and Exchange Commission. Investors should take such
risks into account when making investment decisions. Stockholders
and other readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
on which they are made. The Company undertakes no obligation to
update any forward-looking statements, except as required by
law.
Non-GAAP Measures
We prepare our financial statements in
accordance with GAAP. Within our press release, we make reference
to non-GAAP restaurant-level operating margin and adjusted net
income. Restaurant-level operating margin represents income from
operations plus the sum of general and administrative expenses,
restaurant pre-opening costs, impairment, closed restaurant and
other costs, and depreciation. Restaurant-level operating margin is
presented because: (i) we believe it is a useful measure for
investors to assess the operating performance of our restaurants
without the effect of non-cash depreciation expense; and (ii) we
use restaurant-level operating margin internally as a benchmark to
evaluate our restaurant operating performance and to compare our
performance to that of our competitors. Additionally, we present
restaurant-level operating margin because it excludes the impact of
general and administrative expenses, which are not incurred at the
restaurant level, restaurant pre-opening costs, and impairment,
closed restaurant and other costs. Although we incur pre-opening
costs on an ongoing basis as we continue to open new restaurants,
the pre-opening costs, and impairment, closed restaurant and other
costs are not components of a restaurant's ongoing operating
expenses. The use of restaurant-level operating margin thereby
enables us and our investors to compare operating performance
between periods and to compare our operating performance to the
performance of our competitors. The measure is also widely used
within the restaurant industry to evaluate restaurant-level
productivity, efficiency and performance. The use of
restaurant-level operating margin as a performance measure permits
a comparative assessment of our operating performance relative to
our performance based on our GAAP results, while isolating the
effects of some items that vary from period to period without any
correlation to core operating performance or that vary widely among
similar companies.
Adjusted net income represents net income before
impairment, closed restaurant and other costs, and the income tax
effect of this adjustment. We believe the use of adjusted net
income provides additional information to enable us and our
investors to facilitate year-over-year performance comparisons and
a comparison to the performance of our peers.
Restaurant-level operating margin and adjusted
net income exclude various expenses as discussed above that may
materially impact our consolidated results of operations. As a
result, these measures are not indicative of the Company’s
consolidated results of operations. We present these measures
exclusively as supplements to, and not substitutes for, net income
or income from operations computed in accordance with GAAP. As
supplemental disclosures, restaurant-level operating margin and
adjusted net income should not be considered as alternatives to net
income or income from operations as an indicator of our performance
or as alternatives to any other measure determined in accordance
with GAAP.
|
Chuy’s Holdings, Inc.Condensed
Consolidated Income Statements(Unaudited, in
thousands, except share and per share data) |
|
|
Thirteen Weeks Ended |
|
March 31, 2024 |
March 26, 2023 |
Revenue |
$ |
110,464 |
|
100.0 |
% |
|
$ |
112,498 |
|
100.0 |
% |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Cost of sales |
|
27,821 |
|
25.2 |
|
|
|
28,718 |
|
25.5 |
|
Labor |
|
34,655 |
|
31.4 |
|
|
|
34,102 |
|
30.3 |
|
Operating |
|
18,082 |
|
16.4 |
|
|
|
18,078 |
|
16.1 |
|
Occupancy |
|
7,667 |
|
6.9 |
|
|
|
7,882 |
|
7.0 |
|
General and administrative |
|
7,134 |
|
6.5 |
|
|
|
7,806 |
|
6.9 |
|
Marketing |
|
1,449 |
|
1.3 |
|
|
|
1,550 |
|
1.4 |
|
Restaurant pre-opening |
|
654 |
|
0.6 |
|
|
|
481 |
|
0.4 |
|
Impairment, closed restaurant and other costs |
|
438 |
|
0.4 |
|
|
|
371 |
|
0.3 |
|
Depreciation |
|
5,440 |
|
4.9 |
|
|
|
5,140 |
|
4.7 |
|
Total costs and expenses |
|
103,340 |
|
93.6 |
|
|
|
104,128 |
|
92.6 |
|
Income from operations |
|
7,124 |
|
6.4 |
|
|
|
8,370 |
|
7.4 |
|
Interest income, net |
|
(606 |
) |
(0.6 |
) |
|
|
(777 |
) |
(0.7 |
) |
Income before income
taxes |
|
7,730 |
|
7.0 |
|
|
|
9,147 |
|
8.1 |
|
Income tax expense |
|
814 |
|
0.7 |
|
|
|
925 |
|
0.8 |
|
Net income |
$ |
6,916 |
|
6.3 |
% |
|
$ |
8,222 |
|
7.3 |
% |
|
|
|
|
|
Net income per common share: Basic |
$ |
0.40 |
|
|
|
$ |
0.46 |
|
|
Net income per common share: Diluted |
$ |
0.40 |
|
|
|
$ |
0.45 |
|
|
|
|
|
|
|
Weighted-average shares outstanding: Basic |
|
17,305,582 |
|
|
|
|
18,020,434 |
|
|
Weighted-average shares outstanding: Diluted |
|
17,406,905 |
|
|
|
|
18,176,121 |
|
|
|
|
|
|
|
Chuy’s Holdings, Inc.Reconciliation of
GAAP Net Income and Net Income Per Share to Adjusted
Results(Unaudited, in thousands, except share and
per share data) |
|
|
Thirteen Weeks Ended |
|
March 31, 2024 |
|
March 26, 2023 |
Net income as reported |
$ |
6,916 |
|
|
$ |
8,222 |
|
Impairment, closed restaurant and other costs |
|
438 |
|
|
|
371 |
|
Income tax effect on adjustment (1) |
|
(101 |
) |
|
|
(86 |
) |
Adjusted net income |
$ |
7,253 |
|
|
$ |
8,507 |
|
|
|
|
|
Adjusted net income per common share: basic |
$ |
0.42 |
|
|
$ |
0.47 |
|
Adjusted net income per common share: diluted |
$ |
0.42 |
|
|
$ |
0.47 |
|
|
|
|
|
Weighted-average shares outstanding: basic |
|
17,305,582 |
|
|
|
18,020,434 |
|
Weighted-average shares outstanding: diluted |
|
17,406,905 |
|
|
|
18,176,121 |
|
|
Year Ended |
|
December 31, 2023 |
Net income as reported |
$ |
31,510 |
|
Impairment, closed restaurant and other costs |
|
4,988 |
|
Income tax effect on adjustment (1) |
|
(1,150 |
) |
Adjusted net income |
$ |
35,348 |
|
|
|
Adjusted net income per common share: basic |
$ |
1.98 |
|
Adjusted net income per common share: diluted |
$ |
1.97 |
|
|
|
Weighted-average shares outstanding: basic |
|
17,823,187 |
|
Weighted-average shares outstanding: diluted |
|
17,934,520 |
|
(1) |
|
Reflects the tax expense associated with the adjustment for
impairment, closed restaurant and other costs during the thirteen
weeks ended March 31, 2024 and March 26, 2023 and during
the year ended December 31, 2023. The Company uses its
statutory rate to calculate the tax effect on adjustments. |
|
|
|
|
Chuy’s Holdings, Inc.Reconciliation of
GAAP Income from Operations to Restaurant-Level Operating
Margin(Unaudited, in thousands) |
|
|
Thirteen Weeks Ended |
|
March 31, 2024 |
% of Revenue |
|
March 26, 2023 |
% of Revenue |
Income from operations as reported |
$ |
7,124 |
6.4 |
% |
|
$ |
8,370 |
7.4 |
% |
General and administrative |
|
7,134 |
6.5 |
|
|
|
7,806 |
6.9 |
|
Restaurant pre-opening expenses |
|
654 |
0.6 |
|
|
|
481 |
0.4 |
|
Impairment, closed restaurant and other costs |
|
438 |
0.4 |
|
|
|
371 |
0.3 |
|
Depreciation |
|
5,440 |
4.9 |
|
|
|
5,140 |
4.7 |
|
Restaurant-level operating
margin |
$ |
20,790 |
18.8 |
% |
|
$ |
22,168 |
19.7 |
% |
|
Chuy’s Holdings, Inc.Selected Balance
Sheets Data(Unaudited, in thousands) |
|
|
March 31, 2024 |
|
December 31, 2023 |
Cash and cash equivalents |
$ |
56,367 |
|
$ |
67,774 |
Total assets |
|
473,114 |
|
|
476,634 |
Long-term debt |
|
— |
|
|
— |
Total stockholders’
equity |
|
249,181 |
|
|
249,847 |
|
|
|
|
|
|
Investor RelationsJeff
Priester332-242-4370investors@chuys.com
Chuy s (NASDAQ:CHUY)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Chuy s (NASDAQ:CHUY)
Gráfica de Acción Histórica
De May 2023 a May 2024