CHUY (2019 - Q3)

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 opened for your questions following the presentation. [Operator Instructions] 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’ll turn the conference over to Mr. Howie. Please go ahead, sir. Jon Howi

Thank you, operator, and good afternoon. By now, everyone should have access to our third quarter 2019 earnings release. It can also 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 for 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 conditions. With that out of the way, I'd like to turn the call over to Steve.

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 6th 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 costs during the quarter. We believe these results are a testament to the continued progress we are making on various initiatives we put in place to drive sustainable top-line growth and improved 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 in technology is equally important in our effort to improve our business. During the third quarter through our partnership with Wisely, we completed the system-wide implementation of our new table management system that we believe will help us to improve our front-of-the-house efficiency. Since then we've added more functionality to this platform to allow us to gather important customer intelligence. This includes opt-in WiFi services to capture email addresses, which can be tied to our guests ordering during their visits as well as online. Ultimately, we will be able to use these integrated intelligences as a foundation of our future loyalty program and allow us to market targeted offerings to specific customers for a more personalized experience. With regards to off-premise strategy, we rolled out our catering platform to two additional markets during the third quarter with a plan for two more markets during the fourth quarter. By year-end, our catering offerings will be available in 11 markets. For the third quarter, catering contributed approximately $1.5 million in revenue compared to $369,000 in the same period last year. During the third quarter, we also tested the Dispatch service in two restaurants as part of our partnership with Olo. Early feedback has been very positive as customers now have access to various delivery options direct from our website. From an operational standpoint, this system will allow us to synchronize our online ordering and delivering process for improved efficiency and order accuracy and an increase in margin on these sales. Based on this test, we will continue to expand Dispatch to more stores during the fourth quarter and we expect to follow this with a system-wide rollout by the end of first quarter of 2020. Finally, we are currently in the process of negotiating national contract with a delivery provider, which will then integrate into our point of sale system and make the third-party delivery much more efficient. With that, let me quickly update you on the development plan. During the quarter, we successfully opened one restaurant in Carmel, Carmel, Indiana, which was followed by opening of our second restaurant in Columbus, Ohio market in the fourth quarter. We have now completed our 2019 development plan for six new restaurants and this was made possible through our operators and development team's ability to instill the Chuy's culture in a short time. Looking at 2020, we will continue to employ similar development strategy by balancing new store growth with an ongoing focus on building brand awareness and traffic. We will further bolster our future development plans by utilizing our new real estate and analytics tool, which will allow us to identify new markets for successful expansion in the years to come through a psychographic profile of our customer base created from our top markets. We've been hard at work in developing and testing this tool and we look forward to utilizing it in for our 2021 development. Finally, we also have a strong balance sheet that gives us the flexibility to use our excess capital to create additional value for our shareholders. To that end, subsequent to the end of the third quarter, our board of directors approved a new $30 million share repurchase program that runs through December 31, 2022 that will replace our current program that was set to expire at the end of 2019. We believe this authorization is indicative of a confidence we have in our core business, our ability to continue grow the Chuy's brand and our commitment to enhance long-term returns for our shareholders. With that, I'd like to turn the call over to our CFO, Jon Howie, for a more detailed review of the second quarter’s results.

Thanks, Steve. Revenues for the third quarter ended September 29, 2019 increased to $109.1 million compared to $101.2 million in the same quarter last year. The increase was primarily driven by $7.7 million in incremental revenue from an additional 93 new store operating weeks as well as comparable restaurant sales growth. These increases were partially offset by a decrease in sales from non-comparable restaurants that are not included in incremental revenue just mentioned. In total, we had approximately 1,338 operating weeks during the third quarter of 2019. Comparable restaurant sales increased 2.6% during the third quarter and included 4.5% increase in average check, partially offset by 1.9% decrease in average weekly customers. Affective pricing during the quarter was approximately 3.7%. Turning to a discussion of selected expense line items, cost of sales as a percentage of revenue increased 70 basis points to 26.3%, driven by unfavorable beef produce, dairy pricing and partially offset by favorable pricing in chicken and grocery. All in all commodity inflation through the third quarter was approximately 7%. With the expected decrease in produce pricing, we expect commodity inflation in the fourth quarter of approximately 2% to 3%. Labor cost as a percentage of revenue decreased approximately 150 basis points to 35.5%, primarily due to mini price leverage, increased labor efficiency at new store openings and lower training expense for new managers. This is partially offset by hourly labor rate inflation on our comparable stores of approximately 3.1%. Operating cost as a percentage of revenue held steady at 14.8% compared to last year's quarter. Marketing expense as a percentage of revenue increased 40 basis points to 1.4% driven by our ongoing national level marketing initiatives as Steve discussed earlier. Occupancy costs as a percentage of revenue decreased 10 basis points to 7.5% as we leveraged our fixed occupancy costs on higher sell, partially offsets by higher rental expense at certain newly opened restaurants and larger markets as well as higher real estate taxes. General and administrative expenses increased to $6 million in the third quarter compared to $4.8 million in the same period last year, primarily driven by an increase in performance based bonuses and management salaries as well as higher professional, legal and technology related expenses. In summary, net loss for the third quarter of 2019 was $1.8 million, or $0.11 per diluted share, compared to a net loss of $7.5 million, or $0.44 per diluted share, in the same period last year. The company recorded a loss of $7.3 million, or $5.9 million net of tax equal to $0.35 per diluted share, which included a non-cash loss of $7.1 million related to impairment of assets at five restaurants and $0.2 million of closure costs associated with two restaurants closed in the first quarter of 2019. During the third quarter of 2018, we also record a non-cash loss of $12.3 million, or $11 million net of tax equal to $0.64 per diluted share related to impaired assets at six restaurants. Adjusted net income for the third quarter of 2019 increased 17.9% to $4.1 million from $3.5 million and net income per diluted share increased 25% to $0.25 per share from $0.20 per share in the same period last year. We ended the quarter with $10.5 million of cash on the balance sheet and we currently have no debt. With that, we will now review our outlook for 2019. We have raised our expectation for 2019 adjusted earnings per share to be between $0.98 and $1.01 from our previous range of $0.93 and $0.97. This compares to 2018 adjusted earnings per share of $0.88. Our guidance is based on the following updated assumptions. We had now expected comparable restaurant sales growth for the year of 2% to 2.5% versus a previous range of 1.5% to 2.5%. We continue to expect a restaurant pre-opening expenses of approximately $3 million. We expect G&A expenses between $23.8 million and $24.1 million from a previous range of $23.6 million to $24.1 million. Our effective tax rate is expected to range between 2.0 – or 2% to 5% versus a range of 0% to 5% and we are modeling annual weighted average diluted shares outstanding of approximately 16.8 million versus a previous range of 16.9 million to 17 million shares. We have opened six new restaurants this year, which completed our development plan for the year. And lastly, our capital expenditures net of tenant improvement allowances continue to be projected between $26 million and 29 million. With that, I'll turn the call back to Steve to wrap up.

Thanks, Jon. The initiatives we have in place are clearly producing results and while we still have more work to do, we have now laid the foundation for a healthy company in the long run. Together with a disciplined development strategy as a period of restaurant operations, we have the opportunity to further improve our profitability, which should ultimately drive long-term shareholder value. Lastly, none of our success would have been possible without the hard work and dedication of all our Chuy's employees. With that we are happy to answer any questions. Thank you.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Will Slabaugh with Stephens Inc. Please go ahead.

Yes, thanks guys. Congrats on the quarter.

Thanks Will.

Yes, first on labor. We don't often see these days dropping 150 bps year-over-year. So I was curious how you're thinking about that improvement from the standpoint of with your labor efficiencies, new store efficiencies, pricing I'm sure played into that to agree or anything else you wanted to add?

Well, a lot of that I tell you is – a lot of leverage, we haven't had the leverage like this in a while. The other thing is we continue to work on hourly efficiencies and mainly in opening new restaurants. And like we said last quarter, the comparability of the openings in the last half of this year versus last half last year is significantly less. And so, we're expecting some efficiency there just in openings. But we saw about 50 basis points decrease in hourly labor. And then most of about 80 basis points was in MIT training, which is where the most of it was and then the rest was in just regular management of labor where we were trying to reduce the bars. So we are seeing some progress there. And we're working forward to keep that progress going. But yes, I mean, the thing that we put in place over the last year or two is starting to come to fruition.

Great. And I want to ask you about marketing as well. Wondering if you could talk a little bit more about the results you saw from the marketing campaign in the Houston market. It sounds like you're pretty pleased with that. If you're able to tell what works best there and then move that into Orlando and Dallas? Or if it's too difficult to sort of discern what was successful versus not as much?

The key for us as we do – we do to the target margin that gives a little extra boost, but the key for us has been the paid social and with the paid digital as we’ve mentioned. And again, that's a long-term as – that's like long-term as it goes and it starts a little slower, but then it gets a slow build and that's what we've been able to see specifically in the Houston market. And we're already did it over one quarter in Orlando and starting to look the exact same. But really what's cool about social and digital, what's working, you can do a lot of it and what isn't working, you can switch. And that's what we've really been doing and we’re touching all the markets. And again, we've never, until December of last year – if you remember, we've never really done any push on social that much in before. So this is the first time we've really this year has gotten out in front of the guest and introduce some of our defining differences or really worked on the frequency of the thought and get people in. So we're pretty excited about it, but again what isn't working, we can immediately pivot and move into something that we feel is working.

Great. Thank you.

Very welcome.

Our next question comes from David Tarantino with Baird. Please go ahead.

Hi, good afternoon. My first question is on the comps for the third quarter. Jon, it looks like most of the step up from last quarter was related to average check growth stepping up. So I was wondering if you could maybe explain why the average check stepped up versus last quarter.

Sure. I mean most of it David was we had about 80 basis points in the mix on there and a lot of that was our bar menu. We're trying these new premium tequila drinks that have been going very well, so some new drinks in the bar. And then secondly, our bulk related to our catering and end to go is up and that's really driving that mix. So without the mix we’re right around that 3.7 in price, which is a little higher than we anticipated, but I think that's related to when we did the comp projection for our pricing, we've had a lot more tier three and tier four stores roll in and we took a little bigger price increase on those stores. So that's kind of what's driving that 4.5.

And Jon as the mix component, you mentioned, is that something that you think can carry over into the next couple of quarters?

I think the bar is really driven by our quarterly promotions. And so it really – we'll continue to try to drive those bar sales when we can. These drinks are a little pricey, so we want to make sure that we don't get them out of hand, but they're going very well. So we'll continue doing them until we get some pullback.

Yes. And we usually do them in the same quarter every year where we have bigger drinks. So you'll probably see us have normal promotions in the bar. And then probably every third quarter, you'll see us with a larger drink that stayed consistent with our approach and then obviously like the bulk. And we’re increasing to the go. And as the bulk will continue to rise as we continue to add two stores – two markets every quarter with the catering vans.

Got it. And then on pricing, I think 3.7 is maybe a high watermark versus what we've seen historically. So – and that if I'm not – maybe correct me if I'm wrong, Jon, but that might be running ahead of what the total inflation in the businesses. So we’re just wondering what the philosophy is on pricing, especially as you think about what your plans are for next year on that factor?

Hi, this is Steve. You're right. In the last 10 years, we – until 2019 we've averaged probably 1.75 to around 2. This one just on paper, it was around – right around that 2.75 to 3 and then mix changes moved it up. What we do all the time is obviously look at what the market bears and we want to be the value in every market and we continue ours. During the years that we were only doing 1.75 to 2, our value spread through those years actually got larger and larger in all our tiers. So we felt we had some room compared to our competitors. As we moved forward, you'll see us probably in that 2, 2 plus depending on where we're at in that competitive marketplaces where we want to be the value, but you'll probably see us above the 2 number – 2 plus in the upcoming year.

Got it. And then Steve, maybe a related one around this topic. Traffic has been slightly negative and then I know the industry conditions aren't all that great. But I guess what are you thinking the keys are to getting back to flat or positive on that…

Dave, I – I'm sorry, go ahead.

No, sorry. I'll let you respond. Sorry.

Yes. The key for us is execution, what we've talked and what we've done for the last two years and we're going to continue to do is our tourists approach to our restaurants as we dive into our four walls, because that's where it always is and obviously we're looking outside the four walls with a little bit marketing and we've learned a ton this year and I'm kind of expecting us to learn even more as we go into our second year of how to market our stores properly and especially in new and existing markets. But at the end of the day, we want to put the hospitality back into our restaurants, like a – the restaurant industry is supposed to. So we want to look at hospitality and making sure we're staffed to grow, not staffed to maintain. While we've been real efficient, we need to make sure that the service levels are going up. And those are the main things. It's within our right, within the four walls. We have to not do the crazy stuffs that some of our competitors are doing and worry about executing our deal and we will know long-term that works for us.

And I think, David, if you look at kind of our existing stores that we're in our comparable base at the end of last year, I mean they take out all the noise, they've been averaging down about 1% in traffic, which because our headwind this quarter was close to 100 basis points. And if you look at that compared to the industry average casual dining of three to four down in traffic, I'm not saying that we're happy, but we're definitely beating the average and we're moving that forward from last year as well.

And also the difference between 1.5 million and 400,000 in bulk is making sure that we're getting the bulk counts right on that catering to make sure we're looking apples-to-apples.

Got it. All right, thank you very much.

Thank you.

Our next question comes from Chris O'Cull with Stifel. Please go ahead.

Thanks. Jon, the comp guidance seems to indicate you expect comps maybe to slow here in the fourth quarter. Is there any reason for that outlook?

We ran comparable to what we've been running; a little, we're still above 2%, but not at 2.5% and so I just brought it down a little bit and just because of that, but it's been running pretty consistent. If you look at the period-by-period for period – for Q3, it was consistently between 2.4% and 2.7% each period.

A little bit and as I have told Jon, I'm pretty optimistic still, right in that expectation for the third quarter. We had my Boston Red Sox are in the World Series. It didn't help us having Houston in the Nationals where we have stores in the World Series for seven game down. So that hurt us. And then we had a little bit of real cold weather down in the south that affected us a tiny bit where we had good weather last year for the first month of this quarter. So that should be right in there, the trends have been very similar

Yes.

Okay, that's helpful. And then can you explain what are the benefits, I guess of implementing the Dispatch product if you're also planning to sign a partnership with a third-party delivery provider? Help me understand how that works together?

Well, I mean the dispatch obviously the third party provider that people go to their website to order Chuy's. We want them to come to our website to order Chuy's. So the dispatch – they come to our website and then they can ask for pickup or delivery. When asked for a delivery, an auction takes place and they say okay to the delivery and then we actually will charge the customer most of that charge and so that will offset the total delivery charge for the third party delivery services that is taken up the dispatch. And so it's higher margin, obviously since we're offsetting that whole delivery costs, but then also driving people to our website versus a third party so we can get their information and everything. And it also – and it also, the one thing I forgot, it also is obviously more efficient because that drives it right to the kitchen, using dispatch it goes straight into our kitchen, it’s integrated where third parties are still on an iPad out there.

So if you're looking at a partnership with a third party aggregator, first, are you using that third – or is that third party provider offering Chuy's today? And then also do you expect to, I mean have it fully integrated with your point of sale system so that it'll be easier operationally to execute?

Yes. So currently it is not the once we get the national contract sign it will be integrated. It'll actually be integrated through the rails product through Olo, since it's already setup that way. The provider that we're talking to is already the provider for 20 of our stores. But they'll take over the rest of them as well.

Is there a – I would suspect you would get some sort of promotional money associated with that partnership. Is that true? And is that an opportunity then for to see another sales initiative or sales channel next year to really take off with some growth?

You are correct. When we launched this with them there are some – I mean, I don't want to go too much into that because we haven't signed it yet, Chris. But there are some opportunities when we launched that with them to put some marketing dollars behind that.

Okay, great. Thanks guys.

Thank you.

Our next question comes from Nick Setyan with Wedbush Securities. Please go ahead.

Thanks. Congrats on another great quarter. The marketing...

Thanks, Nick.

The marketing is going to step-up – the marketing step-up this year is clearly having some really good results. Is there any thought to maybe having other step-up as we go into 2020?

Well, yes we have actually; we have the big meeting coming up where we're going to review everything that we did this last year. And I think first you'll see us probably right around that, Nick, I'm sorry you'll probably see a stay right around that spend of about 1.4%, but you will see us probably get really focused on defining what work and what didn't within NOI to ROI process. So we might spend it differently, but it's still being within that 1.4% of sales.

Got it. Obviously, there's been a lot of conversations around commodities and inflation next year. It's great to hear the Q4 inflation is going to be a little bit less, but any early signs that 2020 might be a scary year, in terms of commodity inflation or does that at least early on is it looking more manageable?

I think right now, I mean I think the biggest scare out there that everybody is talking about is swine flu in China and how it's going to indirectly drive maybe some of the other protein prices, but we feel pretty comfortable with that, I mean protein or pork is not a big item on our menu anyway, no matter how high it goes, and we've got our beef locked in pretty – at decent prices that we're comfortable with next year, clear through the end of the year or to heat up these through 11 months and ground beef through the rest of the year. So we feel pretty good at that. I think we can keep it manageable in that 1% to 3% and that's really dependent upon qualifying that on Mother Nature and produce because we do not lock that in. And that – that's the one big driver that always drives our cost of sales with produce.

We might have a little bit – we might have a little bit on the chicken because of that, but we still feel pretty good about it.

Got it. And just kind of last question. Are we still expecting a pretty front-end loaded 2020 opening cadence?

We are. We are.

Got it. Thank you.

[Operator Instructions] Our next question comes from Andrew Strelzik with BMO Capital Markets. Please go ahead.

Hey, good afternoon. I wanted to revisit the traffic comments from before. I understand some of the weather and other headwinds that you called out, but I guess I'm a little surprised that you haven't seen more of an improvement in the traffic trends given some of the marketing, recognizing it's not in all the markets. But I guess, I'm curious do you have any sense that the incremental pricing is impacting your traffic trends and maybe some of the catering is having an impact there? And whereas maybe as we roll into next year with less of pricing component that maybe that removes some of that headwind?

Right now, again, I think the biggest difference is what Jon said about 1%, which is better than it was the prior year. I think we're just going to keep chipping away at it and I don't believe, again, what the key is and every one of our market enabling price increase, this will be the best value in every market that I am, which we have been and still are. So we have not had any information on any of price increase that's bothered us and the big thing – change for us has been the amount of catering that we've done year-over-year.

Okay. And then on some of the customer data that you've been collecting, which ultimately will lead itself to, the loyalty program, are you able to mind any of that data now? And I'm curious of your – if there've been any kind of early learning’s or surprises or interesting kind of tidbits that you've gleaned from that so far? Thank you.

Again, what we've been mining now; it's only been in two stores and we're going to roll it out to a few more before the end of the year and we'll probably have it completely rolled out at the end of the first quarter of 2020. That's when we'll be really starting to really use that information and [indiscernible] also be on Olo ordering and in-store dining. So we'll know what they've had and then we'll have the emails and so forth, so we can do more targeted marketing to individual people. But we got a little ways to get that completely implemented.

Understood. Thank you very much.

My pleasure.

Our next question comes from Brian Vaccaro with Raymond James. Please go ahead.

Thanks. Good evening. Just wanted to circle back on the cost and could you provide a little more color on the cadence that you saw through the quarter? Any comments on regions or Texas versus newer market and then would you be willing to comment on your quarter-to-date conference?

Sure, Brian. Like we were saying before basically the cadence during Q3 was very consistent, low being 2.4, high being 2.7. So it is very, very consistent during the third quarter. We see other than like Steve was saying, and other than some of the softness around the World Series since those two participants working in our markets and especially one of our bigger markets being Houston. We did have some softness there, but the underlying trend is still, take that away, the underlying trend is still there.

Okay. And would you comment on quarter-to-date or?

Yes. I mean, I believe yes. I’ll just say it's 2.2% for period 10 because of some of the softness with the World Series.

Okay. All right. And sorry if I missed it. But what was the off-premise sales mix in the quarter and how much of that was deliberate?

Sure. The off-premise was about 12.9% and it increased about 13.7%. Delivery averages about 2.5% of that.

Okay, great. And then Steve, I wanted to circle back on your comments around service and curious where you see opportunities there. Are there certain units or markets where you might add hours or perhaps utilize handhelds or something else to drive hospitality and could you also provide an update on turnover? Thank you.

Sure. Great. Great, question. What we're looking at is we're looking at testing and get stuff out there. We were looking at a handheld and pay at the table that we think is going to help our efficiency and keep the servers on the floor even a little bit more to really work on salesmanship and making sure we're taking care of the customers, the way they'd like to be taken care off. And it's just hospitality all the way around to a simple greeting, a simple opening of the door, which everybody can always constantly work on. And our turnover is probably at a five-year low. It's at 89% hourly and that's the lowest in a long time. So we're pleased with our retention rates in our stores.

All right, great. Thank you very much.

Welcome.

Our next question comes from Bob Derrington with Telsey. Please go ahead.

Yeah, thanks. Steve, you, I think once said that you're not planning to really grow the system until you get traffic back to positive. On the other hand, I know that your new real estate tool looks to be pretty encouraging about finding good site. How do you reconcile those two as we look into the future?

Well, the key thing Bob is, as I mentioned on the real estate tool, we're still in the testing process on that and we'll probably really roll that out in 2021 to be on a store-by-store basis. So we're still in the testing mode on that and make sure we're making good decisions, than it's given us. And again, that's not a save all; it's just one – another piece of the puzzle by actually real estate. So it's not to save all, but it's a key element to add that psychographic piece into it and go from there. The key for us is we need to be up in customer, customer count is the lifeblood long-term of what we do and I want us to be positive for a period of time before we really ramp up and that's why you'll see the stores similar to this year for next year. We believe we are working in the right direction to make that happen and we're going to continue on the direction and we also have a lot more initiatives that we talked about, whether it'd be Wisely or the things Jon said earlier, that we want to really get integrated into our business and for us to really look at, in 2021 hopefully, move in that number back up.

You've had some really good encouraging trends and I'm just wondering if this is kind of like a line in the sand that you have to have or listen to traffic's a little bit negative, it's not that big a deal. So is it reasonable that development could increase with better site selection in the future even though traffic may be a skosh still negative.

You know me, Bob I'm fairly stubborn, but we'll look at it other things on the table at that particular time, but I need to see a trend, a strong stranded on customer count.

Got you. And a quick follow-up on the impairment charge during this quarter or I believe there were five, was it five new stores that have now been impaired?

Five restaurants.

And is it likely, Steve that we'll see some closures of those?

Bob, 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, but we continue to look at that and so I'll just have to leave it at that.

I guess what I'm wondering is, are there – is there a plan that you can find some improvement within the operating trends, within those businesses? Are they pretty well kind of stuck in a rut, so to speak?

No, I mean we're finding some improvement like I was saying on some of the priority stores with some of the Taco Tuesdays and our Fajita Wednesdays...

And our margaritas.

And margaritas. So we're finding some ways to drive sales there and margins. But again I think like Steve has said, there is a store that need to be closed, we will assess it that at that time and make sure that we don't – we make the right decision and don't prolong that.

Yeah, and just make sure we're using the human capital properly.

Got you, okay. Thanks, guys.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Steve Hislop for any closing remarks.

Thank you so much. Jon and I appreciate your continued interest in Chuy's and we’ll always be available to answer any and all questions. Again, thank you and have a good evening.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.