Chuy’s Enjoying a Strong 2016 in Sales
Chuy’s Holdings, Inc. announced financial results for the first quarter ended March 27.
Highlights for the first quarter ended March 27, 2016 were as follows:
- Revenue increased 16.8 percent to $78.1 million from $66.8 million in the first quarter of 2015.
- Comparable restaurant sales increased 3.2 percent as compared to the same period in 2015, the 23rd consecutive quarter of comparable restaurant sales growth.
- Net income increased 40.1 percent to $4.5 million from $3.2 million and net income per diluted share increased 42.1 percent to $0.27 from $0.19 in the first quarter of 2015.
- Two new restaurants opened during the first quarter of 2016.
Steve Hislop, president and chief executive officer of Chuy’s Holdings, Inc. says, “We delivered a strong start to 2016 by increasing our top line and diluted EPS by 16.8 percent and 42.1 percent, respectively. Our 3.2 percent increase in comparable restaurants sales marked the 23rd consecutive quarter of positive growth. Our first quarter results reflect the strength of our brand as we differentiate ourselves through our made-from-scratch, Tex Mex-inspired menu, commitment to value and upbeat, irreverent atmosphere.”
Hislop concludes, “We continue to introduce our brand to more guests with the execution of our development plan. During the first quarter we opened two new restaurants and have opened three additional restaurants subsequent to quarter end. Our development plans remain on track to open 11 to 13 new restaurants in 2016. We will continue to focus on growing our footprint in larger, denser markets where we are confident that we can achieve high unit volumes and attractive unit level returns, while at the same time “backfilling” our smaller existing markets to continue to build brand awareness.”
First Quarter 2016 Financial Results
Revenue increased $11.2 million, or 16.8 percent, to $78.1 million in the first quarter of 2016 compared to the first quarter of 2015. The increase was driven by $10 million in incremental revenue from an additional 122 operating weeks provided by 12 new restaurants opened during and subsequent to the first quarter of 2015. This increase was partially offset by a decrease in revenue related to our non-comparable restaurants that are not included in the incremental revenue discussed above. Revenue for these non-comparable restaurants is historically lower as the restaurants transition out of the “honeymoon” period that follows a restaurant's initial opening.
Comparable restaurant sales increased 3.2 percent in the first quarter of 2016 as compared to the same period in 2015. The increase in comparable sales was driven by a 2.1 percent increase in average check and a 1.1 percent increase in average weekly customers. The comparable restaurant base consisted of 54 restaurants during the first quarter of 2016.
Total restaurant operating costs as a percentage of revenue decreased to 79.6 percent in the first quarter of 2016 from 80.9 percent in the first quarter of 2015. This decrease was primarily driven by the impact of lower labor costs as a percentage of revenue related to increased efficiencies gained from internal initiatives, lower food costs as a percentage of revenue, particularly grocery, dairy and chicken costs, and lower operating costs related to lower insurance and utilities costs. The decrease was partially offset by higher occupancy costs.
Net income for the first quarter of 2016 increased 40.1 percent to $4.5 million from $3.2 million and net income per diluted share increased 42.1 percent to $0.27 from $0.19 in the first quarter of 2015.
During the first quarter, two new Chuy’s restaurants were opened in Woodbridge, Virginia, and Lafayette, Lousiana. Subsequent to the end of the first quarter, three additional Chuy’s restaurants were opened in Fort Worth, Texas, Cary, North Carolina, and Sterling, Virginia.
The company has revised its fiscal year 2016 guidance and now expects its diluted net income per share to range from $1.03 to $1.07 versus a previous range of $1.01 to $1.05. The diluted net income per share guidance for fiscal year 2016 is based, in part, on the following annual assumptions:
- Comparable restaurant sales growth of approximately 2 percent for the remainder of the year.
- Restaurant pre-opening expenses of approximately $5 million to $5.9 million.
- General and administrative expenses of approximately $17.2 million to $17.8 million.
- An effective tax rate of approximately 29 to 31 percent.
- The opening of 11 to 13 new restaurants.
- Net capital expenditures (net of tenant improvement allowances) of $33.0 million to $38.0 million.
- Annual weighted average diluted shares outstanding of 16.8 million to 16.9 million shares.