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CHUY'S HOLDINGS, INC. (CHUY)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 2023 delivered solid top-line growth and margin expansion: revenue up 7.3% to $119.0M, diluted EPS $0.59, adjusted diluted EPS $0.61; restaurant-level operating margin expanded 250 bps to 21.6% on lower cost of sales and easing commodities .
  • Comparable restaurant sales rose 3.2% on a 5.8% higher average check, offset by a 2.6% decline in average weekly customers; off-premise mix held at ~28% of sales, supporting revenue resiliency .
  • FY2023 adjusted EPS guidance raised to $1.80–$1.85 (from $1.71–$1.76 in Q1; $1.60–$1.65 initially in Q4), despite higher G&A; capex and new unit targets trimmed, indicating tighter capital discipline with an extra Q4 week contributing ~$0.08–$0.10/share .
  • Balance sheet remains conservative with $82.6M cash, no debt, and $47.0M remaining under the repurchase program; Q2 buybacks totaled $3.0M (83,521 shares) and unit development progressed (1 opening in Q2; 1 subsequent) .
  • Wall Street consensus (S&P Global) was unavailable at time of analysis; estimate comparison is not presented.

What Went Well and What Went Wrong

What Went Well

  • Strong margin execution: restaurant-level operating margin increased to 21.6% (+250 bps YoY) on ~4% commodity deflation and menu pricing leverage—“industry-leading” margin performance per CEO .
  • Pricing strategy effective: average check +5.8% YoY drove positive comps (+3.2%) despite traffic headwinds, demonstrating value proposition and menu pricing power .
  • Capital allocation and growth: raised FY23 adjusted EPS guidance; active buybacks ($3.0M) with ample liquidity and no debt; opened Oklahoma City in Q2 and Harker Heights post-quarter, in line with expectations .

What Went Wrong

  • Traffic softness: average weekly customers declined 2.6% YoY despite higher average check, indicating elasticity risk and potential macro sensitivity .
  • Operating expense pressure: G&A rose to $7.7M (6.5% of revenue, +60 bps YoY); delivery charges and repair/maintenance nudged operating costs higher (+10 bps) .
  • Development rationalization: FY2023 new unit plan reduced to five (from six to seven), implying tempered pace amid efficiency focus; pre-opening expense up sequentially on timing .

Financial Results

MetricQ4 2022Q1 2023Q2 2023
Revenue ($USD Millions)$104.1 $112.5 $119.0
Diluted EPS ($)$0.14 $0.45 $0.59
Adjusted Diluted EPS ($)$0.27 $0.47 $0.61
Net Income ($USD Millions)$2.48 $8.22 $10.73
Restaurant-Level Operating Margin (%)17.0% 19.7% 21.6%
Total Restaurant Operating Costs (% Revenue)83.0% 80.3% 78.4%
Off-Premise Sales (% of Revenue)~29% ~27% ~28%

KPI and Cost Drivers

KPI / Cost DriverQ4 2022Q1 2023Q2 2023
Comparable Restaurant Sales (%)+3.4% YoY +8.0% YoY +3.2% YoY
Average Check Change (%)+6.1% YoY +6.2% YoY +5.8% YoY
Average Weekly Customers Change (%)-2.7% YoY +1.8% YoY -2.6% YoY
Cost of Sales (% Revenue)27.5% 25.5% 24.7%
Labor (% Revenue)30.5% 30.3% 29.5%
Operating (% Revenue)16.6% 16.1% 15.9%
Occupancy (% Revenue)7.0% 7.0% 6.8%
Effective Tax Rate (%)9.3% 10.1% 14.4%

Other Highlights

ItemQ1 2023Q2 2023
Cash & Cash Equivalents ($USD Millions)$82.6 $82.6
Long-term DebtNone None
Restaurants Open (Period-End)98 99 (1 opening, 1 closure)
Share RepurchasesN/A83,521 shares ($3.0M); $47.0M remaining

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY2023$1.71–$1.76 (Q1 release) $1.80–$1.85 Raised
Adjusted EPSFY2023$1.60–$1.65 (Q4 release) $1.80–$1.85 Raised
G&A Expense ($M)FY2023$29.0–$30.0 $30.0–$31.0 Raised
New Restaurants (#)FY20236–7 5 Lowered
Net Capex ($M)FY2023$35–$39 $30–$35 Lowered
Pre-Opening Expense ($M)FY2023$2.5–$3.0 $2.5–$2.7 Narrowed/Lowered
Effective Tax Rate (%)FY2023~13%–14% ~13%–14% Maintained
Diluted Shares (M)FY202318.1–18.2 18.1–18.2 Maintained
Extra Q4 Week EPS ImpactFY2023~$0.08–$0.10 ~$0.08–$0.10 Maintained

Earnings Call Themes & Trends

Note: The Q2 2023 earnings call transcript could not be retrieved due to a document database inconsistency; themes below reflect press release disclosures.

TopicPrevious Mentions (Q4 2022 and Q1 2023)Current Period (Q2 2023)Trend
Commodity Costs~15% inflation (Q4) ; ~5% inflation (Q1) ~4% deflation Improving
Labor Inflation~9% (Q4) ; ~7% (Q1) ~5% at comparable units; labor cost +40 bps Easing
Off-Premise Mix~29% (Q4) ~27% (Q1) ~28% (Q2)
Pricing/Check GrowthMenu price increases (Q4/Q1) Check +5.8%; pricing leverage lowers CoS Supportive
Unit Growth2 openings in Q4; 98 units YE 1 opening in Q1 (Fayetteville) ; 1 in Q2 (OKC) + 1 post-Q2 (Harker Heights) Steady pipeline
Guidance TrajectoryFY23 adj. EPS $1.60–$1.65 (Q4) → $1.71–$1.76 (Q1) $1.80–$1.85 (Q2) Upward revisions

Management Commentary

  • “Our results marked another strong quarter… industry-leading restaurant-level operating margin… 21.6%… 250 basis-point improvement over last year” — Steve Hislop, President & CEO .
  • “We achieved a 19.7% restaurant-level operating margin… one of the best in the casual dining industry segment” — Q1 context .
  • “Top line momentum… limited-time offerings… maintained restaurant-level operating margin 270bps above pre-pandemic levels despite double-digit commodity inflation” — Q4 context .

Q&A Highlights

The Q2 2023 earnings call transcript was not accessible due to a document retrieval inconsistency. As a result, specific Q&A themes, guidance clarifications, and tone changes cannot be presented for this quarter.

Estimates Context

  • S&P Global consensus estimates for Q2 2023 were unavailable due to a CIQ mapping issue at the time of analysis; therefore, comparisons versus Street EPS and revenue estimates are not presented. Estimates will be incorporated once accessible.

Key Takeaways for Investors

  • Margin strength is the core positive: restaurant-level operating margin expanded to 21.6% on easing commodities and disciplined operations; this supports the raised FY23 EPS outlook .
  • Pricing remains effective: average check growth (+5.8%) offset traffic declines; watch elasticity and macro sensitivity as mix remains ~28% off-premise .
  • Guidance quality improved while capex/new unit plans were tightened—signals focus on returns and cash generation, with an extra Q4 week aiding EPS by ~$0.08–$0.10 .
  • Liquidity and buybacks offer support: $82.6M cash, no debt, $47.0M authorization remaining; continued repurchases and openings provide catalysts .
  • Cost environment is easing: commodity deflation (~4%) and moderating labor inflation (~5%) should support margins near term; monitor delivery costs and G&A creep .
  • Traffic is the swing factor: comps are price-led; sustained traffic recovery would be an upside driver, whereas further declines could cap multiples .
  • Execution focus: operating discipline and targeted unit growth underpin medium-term upside; estimates context to be added when S&P Global data becomes available.

Notes on non-GAAP: Adjusted net income and restaurant-level operating margin exclude G&A, pre-opening, impairment/closed restaurant costs, and depreciation; see reconciliations and rationale in company disclosures .