Executive Summary

Q3 2023 delivered modest top-line growth and strong profitability: revenue rose 6.4% to $113.5M, comparable sales +2.0%, and restaurant-level operating margin expanded 190 bps to 19.4% .
EPS beat consensus: Adjusted EPS was $0.44 vs $0.36 consensus; revenue $113.46M vs $111.61M consensus; both beats supported by commodity deflation (~5%) and menu price leverage; GAAP diluted EPS was $0.39 .
Guidance raised: FY23 adjusted EPS raised to $1.85–$1.90 (from $1.80–$1.85 in Q2), with unchanged G&A ($30–$31M), one fewer new unit (now four in 2023), and tweaks to capex and pre-opening ranges .
Capital returns and balance sheet remain strengths: $20M buyback in Q3 (538,907 shares), $27M authorization remaining; $69.9M cash, no debt, $35M revolver available—optionality into 2024 pipeline .

What Went Well and What Went Wrong

What Went Well
- Margin execution: Restaurant-level operating margin increased to 19.4% (+190 bps YoY) on ~5% commodity deflation and pricing leverage; one of the “best … in the casual dining industry segment,” per CEO .
- Consistent off-premise: Off-premise mix held at ~28% (vs ~26% LY), supporting sales stability alongside improved cost of sales (-220 bps) .
- Shareholder returns and liquidity: $20M of Q3 buybacks; $69.9M cash, no debt; ample capacity for growth and returns .
What Went Wrong
- Traffic softness: Comparable sales +2.0% was mix/pricing-driven (average check +3.8%) while average weekly customers declined 1.8% YoY .
- Rising operating costs excluding COGS: Operating costs +50 bps YoY from higher delivery service charges, repairs/maintenance, and insurance; G&A rose to 6.9% (from 6.3%) .
- Higher G&A tied to bonuses: Management cited higher performance-based bonuses driving G&A increase in the quarter .

Financial Results

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($M)	$112.5	$119.0	$113.5
GAAP Diluted EPS ($)	$0.45	$0.59	$0.39
Adjusted Diluted EPS ($)	$0.47	$0.61	$0.44
Restaurant-Level Operating Margin (%)	19.7%	21.6%	19.4%
Comparable Restaurant Sales YoY (%)	+8.0%	+3.2%	+2.0%
Average Check YoY (%)	+6.2%	+5.8%	+3.8%
Avg. Weekly Customers YoY (%)	+1.8%	-2.6%	-1.8%
Off-Premise Sales (% of revenue)	~27%	~28%	~28%

Estimates vs. Actuals (Q3 2023):

Metric	Actual	Consensus	Beat/Miss
Revenue ($M)	$113.46	$111.61	Beat by $1.85M
Adjusted Diluted EPS ($)	$0.44	$0.36	Beat by $0.08

Note: S&P Global consensus was unavailable via our tool for CHUY; consensus figures above sourced from MarketBeat. We attempted to retrieve S&P Global data but the mapping was unavailable in the SPGI CIQ company map.

KPIs and Cost Drivers (Q3 YoY):

Cost of sales -220 bps on ~5% commodity deflation and pricing; operating costs +50 bps (delivery fees, R&M, insurance); occupancy -20 bps (sales leverage) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2023	$1.80–$1.85 (Q2 update)	$1.85–$1.90	Raised
G&A Expense ($M)	FY 2023	$30–$31	$30–$31	Maintained
New Restaurants (units)	FY 2023	Five	Four	Lowered
Net Capex ($M)	FY 2023	$30–$35	$35–$37	Raised
Pre-opening Expense ($M)	FY 2023	$2.5–$2.7	$2.0–$2.3	Lowered
Effective Tax Rate (%)	FY 2023	~13–14%	~13–14%	Maintained
Weighted Diluted Shares (M)	FY 2023	18.1–18.2	17.9–18.0	Lowered

Additional context: Q3 reiterated an extra week in Q4 2023 expected to add ~$0.08–$0.10 to EPS .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Off-premise/delivery	Off-premise ~27% (Q1) and ~28% (Q2); delivery added another provider in 2022, raising delivery service charges	Off-premise ~28%; delivery service charges contributed to operating cost +50 bps	Stable off-premise; delivery cost pressure persists
Commodity costs	~5% inflation (Q1)	~4% deflation (Q2)	~5% deflation (Q3), aiding COGS (-220 bps)
Traffic vs. price/mix	Q1 traffic +1.8%, check +6.2%	Q2 traffic -2.6%, check +5.8%	Q3 traffic -1.8%, check +3.8%
G&A/overheads	G&A 6.9% (Q1) and 6.5% (Q2) of sales	G&A 6.9% of sales; increase driven mainly by higher performance-based bonuses (call)	Elevated vs LY
Unit development	Openings: Fayetteville, AR (Q1); Oklahoma City (Q2), Harker Heights (Q3), total restaurants 100; Q2 guided 5 openings in 2023	On track for one additional opening in December (total 4 in 2023); 2024 plan 6–8 openings; discussing ~10% unit growth in 2025 (call)	Pipeline strengthening into 2024–2025
Capital returns	Q2 repurchased ~$3M; cash $82.6M, no debt	Q3 repurchased $20M; cash $69.9M; $27M remaining on authorization; no debt	Increased buybacks; balance sheet strong

Management Commentary

“We… posted a comparable sales increase of 2%. We were also able to achieve one of the best restaurant-level operating margins in the casual dining industry segment at 19.4% through our continued focus on four-wall operational excellence.” — Steve Hislop, President & CEO .
“During the quarter, we opened our third restaurant of the year in Harker Heights, TX, bringing our total to 100 restaurants… we remain excited about the organic growth opportunities ahead for the brand.” — Steve Hislop .
CFO noted G&A increase was driven mainly by performance-based bonuses during the quarter (call) .

Q&A Highlights

Development cadence: Management indicated one additional opening in December 2023 (total four for FY23), targeting 6–8 openings for 2024 and aiming for ~10% unit growth in 2025 as the pipeline strengthens .
Delivery channel dynamics: Discussion that Uber Eats lapped in October (post-quarter), with sequential signs of improvement in non-delivery business as delivery normalizes (analyst math referenced in Q&A) .
Costs and G&A: Management highlighted higher G&A tied to performance-based bonuses and reaffirmed FY assumptions underpinning guidance .
Liquidity and buybacks: Reiterated strong cash/no-debt profile and $27M remaining authorization, reinforcing flexibility for growth and capital returns .

Estimates Context

Q3 beats: Adjusted EPS $0.44 vs $0.36 consensus; revenue $113.46M vs $111.61M consensus, both beats .
S&P Global consensus: We attempted to pull S&P Global data via our estimates tool, but no CIQ mapping was available for CHUY at the time. Accordingly, consensus figures are sourced from MarketBeat. If/when SPGI mapping becomes available, we would anchor comparisons to S&P Global.

Key Takeaways for Investors

Margin resilience remains the core bull point: 19.4% restaurant-level margin (+190 bps YoY) amid soft traffic underscores cost discipline and commodity tailwinds; sustainability into 2024 will hinge on delivery fees, insurance, and R&M normalization .
Mix over traffic: Comps are driven by pricing/mix (+3.8% check) with traffic still negative; any stabilization in dine-in could be a catalyst for upside to sales flow-through .
Guide drift constructive: FY23 adjusted EPS raised to $1.85–$1.90 while reducing 2023 new unit openings to four and tightening capex/pre-opening; execution > expansion near-term .
Capital-structure advantage: $69.9M cash, no debt, and ongoing buybacks ($20M in Q3; $27M remaining) provide downside support and optionality for unit growth acceleration in 2024–2025 .
2024–2025 growth narrative: Management’s 6–8 new units in 2024 and ~10% growth target for 2025 suggest an improving development pipeline; watch for site selection/permits and construction timelines to confirm cadence .
Trading setup: Near-term, beat-and-raise plus buybacks are positive; risk skew centers on traffic softness and operating cost line items (delivery fees, insurance). Upside if dine-in trends improve and commodities remain favorable .
Monitoring list into Q4: Extra 14th week adds $0.08–$0.10 to FY EPS; track holiday/seasonal traffic, delivery channel mix, and any updated 2024 unit guide at year-end .

Additional notes on sources

Core financials, KPIs, and guidance changes are from CHUY’s Q3, Q2, and Q1 2023 8-K press releases .
Q3 call transcript and Q&A themes referenced from public transcript hosts (Seeking Alpha, Yahoo/Insider Monkey, MarketScreener), used where in-platform transcript retrieval was unavailable .

CHUY'S HOLDINGS, INC. (CHUY)·Q3 2023 Earnings Summary