Chuy's Holdings, Inc. (NASDAQ:CHUY) Q3 2019 Earnings Conference Call Transcript

Nov 07, 2019 • 05:00 pm ET

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Chuy's Holdings, Inc. (NASDAQ:CHUY) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day everyone and welcome to the Chuy's Holdings Third Quarter 2019 Earnings Conference Call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode and the lines will be open for your questions following the presentation.

On today's call we have Steve Hislop, President and Chief Executive Officer; and Jon Howie, Vice President and Chief Financial Officer of Chuy's Holdings, Incorporated.

At this time, I will turn the conference over to Mr. Howie. Please go ahead, sir.

Executive
Jon Howie

Thank you, Operator, and good afternoon. By now, everyone should have access to our third quarter of 2019 earnings release. If not, it can be found on our website at www.chuys.com in the Investors section.

Before we begin our review of formal remarks, I need to remind everyone that part of our discussions today will include forward-looking statements. These forward-looking statements are not guaranteeing future performance and therefore you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

With that out of the way, I'd like to turn the call over to Steve.

Executive
Steve Hislop

Thank you Jon. Good afternoon, everybody and thank you for joining us on the call today. We are pleased with our third quarter performance, highlighted by an increase in adjusted net income, just shy of 18%. Revenues during the third quarter grew approximately 8% and we posted our sixth consecutive quarter of positive comparable restaurant sales. We also successfully improved our profitability with an 11.4% increase in restaurant level operating profit and a 50 basis point increase in restaurant-level operating margin despite continued labor rate inflation and higher commodity cost during the quarter. We believe these results are a testament to the continued progress we are making on various initiatives we've put in place to drive sustainable topline growth and improve profitability.

Starting with our marketing campaign. We continue to see meaningful progress from our digital marketing efforts, which include paid search, paid social media campaigns and location-based mobile advertising covering all of our markets. In addition, our targeted marketing campaigns continue to benefit our results as we have experienced improved sales in our Houston market since we began our efforts there in April of this year.

In addition to Houston during the third quarter, we expanded our targeted marketing campaign to Orlando by utilizing a similar approach through promotional radio, strategic highway signage and advertising on digital platforms like YouTube, Hulu and Vue. As we continue our campaign in Orlando, we will launch a similar campaign in our Dallas market during the fourth quarter. Again, our goal here is to focus on certain markets each quarter to better educate our customers on the Chuy's experience and drive frequency to our restaurants.

Our continued investment