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Chuy's outlook positive after 1Q growth

Chuy's outlook positive after 1Q growth

Executives expect positive sales and unit-growth trends for 2013

Executives at Chuy’s Holdings Inc. expressed confidence after releasing first-quarter results on Monday that the 42-unit Tex-Mex casual-dining chain could continue positive same-store sales and unit-growth trends for the rest of the year.

Austin, Texas-based Chuy’s, which went public last year, reported next income of $2.5 million, or 15 cents per share, for the first quarter that ended March 31, compared with $2.4 million, or 15 cents per share, in the prior-year period.

Revenue increased $9.2 million, or 24.6 percent, to $46.7 million in the first quarter, compared with $37.5 million in the same quarter last year. The company opened 10 new restaurants during or after the first quarter of 2012.

Chuy’s same-store sales increased about 2.3 percent in the first quarter, driven by a 2.2-percent increase in average check and a 0.1-percent increase in traffic.

Analysts reacted favorably by the earnings per share that were one cent above estimates. David Tarantino of Baird Equity Research said in a note: “We are encouraged by healthy Q1 results … and the positive tone related to recent comp trends and the development outlook.”

Andy Barish, an analyst at Jefferies LLC, said his team was holding its valuations. “We like Chuy’s impressive 20-percent unit growth and consistent execution, but remain on the sidelines given valuation,” he wrote, citing caution because of  “choppy consumer sentiment and ramping food costs.”

“Development is on track, with Chuy’s reporting that new units continue to meet or exceed targets,” Barish also wrote, noting that Chuy’s has forecast opening eight to nine new units this year.

During the first quarter, Chuy’s opened two new units in San Antonio, Texas, and Kissimmee, Fla. In April, it opened an additional unit in Richmond, Va.

Steve Hislop, Chuy’s president and chief executive, told analysts, “We remain pleased with the performance of our new units as they continue to hit our expectations.”

The company offered earnings per share guidance of 67 cents to 69 cents for the year and same-store sales growth of between 1 percent and 1.5 percent.

Chuy's owns and operates restaurants in nine states.

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless

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