Chuy’s Expects to Open Up to 14 Restaurants in 2017 | Food Newsfeed
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Chuy’s Expects to Open Up to 14 Restaurants in 2017

May 05, 2017 Industry News
Industry News

Chuy’s Holdings, Inc. announced financial results for the first quarter ended March 26, 2017.

Highlights for the first quarter ended March 26 were as follows:

Revenue increased 11.3 percent to $86.9 million from $78.1 million in the first quarter of 2016.

Comparable restaurant sales decreased 0.7 percent as compared to the same period in 2016.

Net income was $4.6 million, or $0.27 per diluted share, compared to $4.5 million, or $0.27 per diluted share, in the first quarter of 2016.

Restaurant-level operating profitincreased to $16.6 million from $15.9 million in the first quarter of 2016.

Two new restaurants opened during the first quarter of 2017.

Restaurant-level operating profit is a non-GAAP measure. For a reconciliation of restaurant-level operating profit 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, “Our main focus remains taking care of our customers, one customer at a time, delivering high-quality, made-from-scratch food and drink at a tremendous value in a unique and upbeat atmosphere. Our unique positioning, the broad appeal of our concept, and our flexible real estate strategy all contribute to our ability to deliver segment-leading unit growth. Over the last two years, we’ve expanded our store base by over 35 percent, and our 2017 development is off to an active start with three new restaurants open year to date.”

First Quarter 2017 Financial Results

Revenue increased $8.9 million, or 11.3 percent, to $86.9 million in the first quarter of 2017 compared to the first quarter of 2016. The increase was driven by $11.7 million in incremental revenue from an additional 157 operating weeks provided by 14 new restaurants which opened during and subsequent to the first quarter of 2016. 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 and the loss of 13 operating weeks due to the closing of the Charlotte, North Caorlina, location during the third quarter of 2016. Revenue for the 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 decreased 0.7 percent in the first quarter of 2017 as compared to the same period in 2016. The decrease in comparable sales was driven by a 2.2 percent decrease in average weekly customers offset by a 1.5 percent increase in average check. Comparable restaurant sales and average weekly customers were negatively affected by approximately 60 basis points due to unfavorable weather and the timing of Valentine’s Day during the week. This negative impact was offset by approximately 30 basis points due to Easter falling in the first quarter of 2016 compared to the second quarter of 2017. The comparable restaurant base consisted of 62 restaurants at the end of the first quarter of 2017.

Total restaurant operating costs as a percentage of revenue increased to 80.9% in the first quarter of 2017 from 79.6 percent in the first quarter of 2016. This increase was primarily driven by higher labor costs due to new store labor inefficiencies and hourly labor rate inflation and higher operating costs due to increases in general utility costs. These increases were offset by lower cost of sales driven by favorable commodity pricing.

Net income was $4.6 million, or $0.27 per diluted share, compared to $4.5 million, or $0.27 per diluted share, in the first quarter of 2016.

Development Update

During the first quarter, two new Chuy’s restaurants were opened in Cedar Park, Texas and Cumberland, Georgia. Subsequent to the end of the first quarter, one additional Chuy’s restaurant was opened in West Chester, Ohio.

2017 Outlook

The company currently expects 2017 diluted net income per share of $1.11 to $1.15. The diluted net income per share guidance for fiscal year 2017 includes an estimated $0.05 per share positive impact due to the fourth quarter of 2017 containing 14 weeks versus 13 weeks in fiscal 2016 and is further based, in part, on the following annual assumptions:

Comparable restaurant sales growth of 0.5 percent to 1.5 percent versus a previous range of 1.0% to 2.0% (on a 52-week comparable basis).

Restaurant pre-opening expenses of $5.8 million to $6.3 million versus a previous range of $6.0 million to $6.5 million.

General and administrative expense of $20.6 million to $21.1 million;

An effective tax rate of 29 percent to 31 percent.

The opening of 12 to 14 new restaurants.

Annual weighted average diluted shares outstanding of 17.0 million to 17.1 million shares.

Net capital expenditures (net of tenant improvement allowances) of $39 million to $44 million.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.