Chuy’s Holdings Inc. is testing catering in three markets and planning a systemwide rollout of online ordering by year’s end, executives said Thursday.
The Austin, Texas-based casual-dining Mexican-themed brand sees strong potential in the off-premise sales platforms, said Steve Hislop, Chuy’s CEO and president, in a call with stock analysts after releasing second-quarter earnings.
“We're excited about our off-premise,” Hislop said. “It's actually up for the quarter about 14 percent.”
Hislop said about 65 percent of Chuy’s locations now have third-party delivery, and the company is working on online ordering capabilities.
“We continue to make progress in designing our new online ordering system through our partnership with Olo,” Hislop said. “Our goal is to make it easier for our guests to conveniently order our food, and early feedback from our test had been positive.
“We are actually in test in one store here in Austin, with initial plans to expand further into Austin, Dallas and two additional markets in the Southeast, or approximately 25 stores on Olo by the end of September,” he said.
Hislop said the company expects a full systemwide rollout by early in the fourth quarter.
“This online ordering platform will be a stepping stone for our future loyalty program,” he said, “so we are taking our time to make sure everything is designed properly.”
Chuy’s is also conducting catering tests in three markets, and the sales was about $180,000 in the first quarter and about $275,000 in the second quarter, Hislop said.
“We will be looking at adding two more catering vans this upcoming year,” he said. “One will be in the D.C. market, the other one will be in our Atlanta market.”
Hislop said labor costs continue to be a pressure point for Chuy’s and in the restaurant industry broadly.
“Much of our focus has been on maximizing our labor efficiency in a non-guest-facing way,” he said. Chuy’s has been integrating new management tools into its point-of-sale system.
“We believe this new platform will help enhance our sales projection and further assist us in optimizing our labor productivity,” Hislop said. Rollout of the labor management tools had been targeted for the second quarter, but “technology speed bumps” pushed that into the third quarter, he said.
For the second quarter ended July 1, Chuy’s net income increased 21.1 percent to $6.5 million, or 38 cents a share, from $5.3 million, or 31 cents a share, in the prior-year period. Revenue increased 12.6 percent to $106.3 million from $94.5 million in the same quarter last year.
Same-store sales increased 1 percent.
Chuy’s, founded in 1982, has 97 restaurants in 19 states. In the second quarter, the brand added three new restaurants, one each in Lakewood, Colo., Greenwood Village, Colo., and in Tampa, Fla. So far in the third quarter, Chuy’s opened one restaurant in Kendall, Fla.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless
