Chuy’s(US:CHUY)2021-11-06 18:22Financial Data and Key Metrics Changes - Revenues for Q3 2021 increased 24.3% to $101.9 million compared to $82 million in the same quarter last year, primarily due to growth in customer traffic and new restaurant openings [14][21] - Net income for Q3 2021 increased 112.3% to $6 million or $0.30 per diluted share compared to $2.8 million or $0.14 per diluted share in the same period last year [21] - Adjusted net income for Q3 2021 increased 48.8% to $9.1 million or $0.45 per diluted share compared to $6.1 million or $0.31 per diluted share in the same period last year [22] Business Line Data and Key Metrics Changes - Comparable restaurant sales increased 20.5% during Q3 2021 versus last year, but declined 2.4% compared to 2019 due to the Delta variant impact [15][6] - Off-premise sales accounted for approximately 26% of total revenue in Q3 2021, down from 33% in 2020 and up from 12% in 2019 [14] Market Data and Key Metrics Changes - Labor availability remains a significant challenge, with staffing levels at 80% to 85% system-wide during Q3 2021, impacting the ability to fully capitalize on sales recovery [7][6] - October comparable sales increased 0.8% compared to 2019, marking the first time since the pandemic that sales exceeded pre-COVID levels [6] Company Strategy and Development Direction - The company plans to open between six to eight new restaurants in 2022, focusing on smaller prototypes to improve operating efficiency [13] - The three key pillars of the company's strategy during the pandemic are safety, convenience, and value, which continue to resonate well with guests [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underlying business recovery despite ongoing challenges from the pandemic and labor shortages [26] - The company anticipates commodity inflation of 7% to 9% for Q4 2021 and hourly labor inflation of 10% to 11% [16][17] Other Important Information - The company had $105.1 million in cash and cash equivalents, no debt, and $35 million available from a new credit facility as of the end of Q3 2021 [23] - The company repurchased approximately 197,000 shares of common stock for a total of $6.1 million during Q3 2021 [24] Q&A Session Summary Question: What kind of pricing are you thinking of in Q4 and into 2022 to offset inflation? - Management indicated that Q3 pricing was around 3.2% and they are considering a price increase of around 2% to 2.25% in February 2022 [29][30] Question: How much are local restrictions and staffing challenges limiting sales recovery? - Management acknowledged that staffing levels at 80% to 85% have limited their ability to fully serve customers, impacting sales recovery [36][38] Question: What is the outlook on food cost inflation beyond Q4? - Management mentioned they are locked in on certain commodities and are considering locking in a percentage of next year's needs while allowing some to float [41][42] Question: How should we think about margin next year? - Management expects labor costs to return to the low to mid-30% range, with potential offsets from sales leverage and operating costs [45][46] Question: What are the plans for unit development and catering? - Management plans to focus on opening new locations in core markets and ramping up catering services, aiming to return to pre-pandemic levels [51][52]