Chuy’s Holdings Inc. said it would be closing four more restaurants by the end of the year, according to securities documents filed Monday.
The Austin, Texas-based casual-dining brand said it expects to complete the closures by the end of the fourth quarter. It did not provide the locations of the closures.
As of Sept. 29, the brand had 104 restaurants open. The four planned closures will take Chuy’s restaurant count to 100, the same number it had at the end of fiscal 2018.
Earlier in the year, Chuy’s closed restaurants in Cumberland, Ga., near Atlanta, and in Miami, saying the nearby mall traffic was down. It also said it was scaling back its development plan for the year.
The company said it made the decision on Nov. 16 after looking at under-performing units.
“As a result of our impairment analysis of under-performing stores, the company recognized pre-tax impairment charges of approximately $6 million related to these restaurants during the third quarter of 2019,” the filing said. “The company may record additional pre-tax non-cash impairment charges of approximately $2 million to $4 million upon the future lease terminations over the next one to two years.”
Chuy’s said it expects to incur additional cash charges of $1 million to $2 million over the next year for such items as lease obligations, employee termination benefits and other closure-related obligations.
Steve Hislop, Chuy’s president and CEO, said on a Nov. 7 earnings call with analysts that “to close the store is a big thing, one of the last resorts, and out of respect of our employees, we're not going to mention these store closures or discuss stores' closures until a point in time that that would happen.”
During the third quarter, Chuy’s opened one new restaurant in Carmel, Ind., a suburb of Indianapolis. In the fourth quarter, it opened another new restaurant in Columbus, Ohio. The company has opened six new restaurants in 2019, which matches the number of closures.
For the third quarter ended Sept. 29, Chuy’s reported a net loss of $1.8 million, or 11 cents a share, compared to a loss of $7.5 million, or 44 cents a share, in the same period last year. Revenue increased 7.8% to $109.1 million from $101.2 million in the prior-year quarter.
Same-store sales increased 2.6% in the quarter.
Founded in 1982, Chuy’s has restaurants in 19 states.
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