What happened
Shares of Chuy's (NASDAQ: CHUY) were moving higher today after the full-service Tex-Mex restaurant chain posted better-than-expected results in its fourth-quarter earnings report.
As of 12:46 p.m. ET, the stock was up 8.7%.
So what
Chuy's said comparable sales in the quarter were up 3.4%, or 3.1% compared to Q4 2019, driving overall revenue up 5.5% to $104.1 million. That beat estimates at $102.8 million.
Restaurant-level operating margin was down 430 basis points on a year-over-year basis to 17% due to inflation in food and labor, but that was still up 270 basis points from Q4 2019.
On the bottom line, the company reported adjusted earnings per share of $0.27, which was down from $0.40 in the quarter a year ago, but better than the $0.20 it reported in Q4 2019. That result also topped expectations at $0.21.
CEO Steve Hislop said: "We are excited about the organic growth opportunities ahead for the brand through continued unit expansion. Through accelerated unit growth and disciplined capital allocation, we believe we've put Chuy's on the path to maximize shareholder value in 2023 and beyond."
Now what
Looking ahead to 2023, the company expects to add six to seven new restaurants, bringing the total to 104-105. It also forecast a return to profit, calling for adjusted earnings per share of $1.60-$1.65, above $1.37 in 2022 and better than estimates at $1.37.
The restaurant industry has been enjoying significant tailwinds as consumers continue to spend on services like restaurants and travel, even as recession concerns have weighed on other retail sectors.
That bodes well for Chuy's going into 2023, especially if inflation cools off.
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