Chuy’s(US:CHUY)2019-08-10 03:30Financial Data and Key Metrics Changes - Revenues for Q2 2019 increased to $113.1 million from $106.3 million in the same quarter last year, driven by $7.9 million in incremental revenue from additional operating weeks and comparable restaurant sales growth [18] - Comparable restaurant sales increased by 1.9%, with a 3.9% increase in average check, partially offset by a 2% decrease in average weekly customers [19] - Net income for Q2 2019 was $6.2 million or $0.30 per diluted share, compared to $6.5 million or $0.38 per diluted share in the same period last year [24] Business Line Data and Key Metrics Changes - Catering contributed approximately $1.5 million in revenue for Q2 2019, up from approximately $400,000 in the same period last year [13] - Labor cost as a percentage of revenue decreased to 34.3%, primarily due to increased labor efficiency at new store openings [21] - Marketing expense as a percentage of revenue increased to 1.4%, driven by new national marketing initiatives [23] Market Data and Key Metrics Changes - The company experienced unfavorable weather conditions that negatively impacted comparable sales by approximately 80 basis points [19] - The company expects commodity inflation of approximately 3% to 4% for the year, largely due to unfavorable beef and produce pricing [20] Company Strategy and Development Direction - The company is focusing on targeted marketing campaigns, technology investments, off-premise sales strategies, and labor efficiencies to drive sustainable growth [7][8] - A real estate analytics tool is being developed to identify new markets for expansion, with plans to utilize it for 2020 development [16] Management's Comments on Operating Environment and Future Outlook - Management raised full-year earnings per share expectations to between $0.93 and $0.97, based on updated assumptions including comparable restaurant sales growth of 1.5% to 2.5% [26] - Management expressed confidence in the initiatives in place to improve store-level profitability and emphasized the importance of same-store customer count increases [28] Other Important Information - The company ended the quarter with $11.8 million in cash and no debt [25] - The company plans to open one more restaurant to complete its 2019 development plan [15] Q&A Session Summary Question: Factors driving improvement in labor line and sustainability - Management expects continued efficiency in new stores and some leverage on labor costs in the second half of 2019 [32] Question: Trends in same-store sales growth after wet weather - Management noted a recovery in sales trends following the weather impact, with positive trends continuing into the current quarter [34][35] Question: Potential for more unit openings next year - Management indicated a likely range of 5 to 7 new openings for 2020, focusing on improving same-store customer counts [39] Question: Upward revision to earnings guidance - The revision was influenced by better labor cost outlook but offset by upward pressure on cost of sales [40] Question: Impact of pricing strategy on customer traffic - Management reported flat customer counts after accounting for weather impacts, indicating a positive trend [46] Question: Off-premise business trends and Olo partnership - Adoption rates for online ordering through Olo increased significantly, with expectations for further growth upon full implementation of Dispatch [47] Question: Operating environment amidst industry challenges - Management noted that the operating environment remains tough, but balancing off-premise and in-store sales execution is key [49] Question: New value initiatives performance - Certain stores implemented promotional nights to increase traffic, which has shown positive results [64]