Chuy’s(US:CHUY)2022-11-05 16:22Financial Data and Key Metrics Changes - Revenues for Q3 2022 increased by 4.7% to $106.7 million compared to $101.9 million in Q3 2021, primarily due to an additional 21 operating weeks from new restaurants [17] - Comparable restaurant sales increased by 2.6% year-over-year, driven by a 6.2% increase in average check, offset by a 3.6% decrease in average weekly customers [18] - Net income for Q3 2022 was $5 million or $0.27 per diluted share, down from $6 million or $0.30 per diluted share in the same period last year [24] Business Line Data and Key Metrics Changes - Off-premise sales accounted for approximately 26% of total revenue, consistent with Q3 2021 [17] - The company implemented a 3.5% price increase during the quarter, maintaining a strong value proposition [7] - Restaurant-level operating margin improved to 17.5%, representing a 300 basis point improvement over 2019 [7] Market Data and Key Metrics Changes - The company experienced commodity inflation of approximately 21% during Q3, with expectations for a decline to the high teens in Q4 [19][21] - Labor costs as a percentage of revenue increased to 30.4%, primarily due to a 10% hourly labor rate inflation [21] Company Strategy and Development Direction - The company plans to open two new restaurants in Q4 2022, totaling three new openings for fiscal 2022, with a forecast of six to nine new restaurants for fiscal 2023 [14][27] - A new $50 million share repurchase program was announced, reflecting the company's strong financial position and commitment to long-term shareholder value [16][26] Management's Comments on Operating Environment and Future Outlook - Management noted that staffing improvements have positively impacted sales momentum, with continued positive trends into Q4 [6][31] - The company is cautious about inflationary pressures for 2023, with expectations for labor and commodity inflation remaining elevated [33][79] Other Important Information - The company has made progress in hiring and staffing, with a focus on retention and improved team member experience [8][58] - Digital marketing efforts have been ramped up, including partnerships with social media platforms and promotional campaigns [12] Q&A Session Summary Question: Recent sales trends and key drivers - Management noted that sales improved from flat in July to 3.5% in August and 3.9% in September, driven by staffing improvements and social media engagement [30][31] Question: Inflation outlook for 2023 - Management indicated that achieving previous margin targets may be challenging due to ongoing inflation, with estimates of 5-6% labor inflation and 8-9% commodity inflation [33] Question: Development plans for 2023 - Management expressed confidence in opening six to nine new units, focusing on established markets with proven demand [36][38] Question: Effectiveness of digital marketing - Management stated that digital marketing efforts are aimed at increasing brand awareness, with results still being evaluated [45] Question: Catering and off-premise sales trends - Catering sales have increased to 2.6% of total sales, with off-premise sales remaining stable at around 26% [70][76]