Chuy's Holdings Stock

Chuy's Holdings, Inc. operates as a full-service restaurant concept offering a distinct menu of authentic, freshly-prepared Mexican, and Tex-Mex inspired food.

The company’s restaurants have common decor, but each location is unique in format, offering an unchained look and feel, as expressed by its motto.

The company is committed to providing value to its customers through offering generous portions of made-from-scratch, flavorful Mexican and Tex-Mex inspired dishes. The company’s core menu was established using recipes from family and friends of its founders, and has remained relatively unchanged over the years. The company offers the same menu for both lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and salads complemented by a variety of appetizers and desserts. Each of the company’s restaurants also offers a variety of homemade sauces, including its signature Hatch Green Chile, Boom-Boom and Creamy Jalapeño sauces, all of which it makes from scratch daily in each restaurant. These sauces are a key element of the company’s offering and provide its customers with an added ability to customize their orders.

At the beginning of fiscal year 2022, the company added several popular items back to its full menu, including fan favorites like the Baja Shrimp Tacos and the Comida Deluxe combination platter. The company also launched its first Chuy’s Knock Out (CKO) limited-time food offering during the fourth quarter of 2022. The CKO showcased three new menu items, including the Macho Burrito and Pork Boom-Boom Enchiladas, made with the company’s savory roasted pork. CKO food offerings will continue to run for six weeks once every quarter. The company also offers a full-service bar in all of its restaurants providing its customers a wide variety of beverage offerings, featuring a selection of specialty cocktails, including its signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice and the King's Punch, a made-to-order, hand-shaken rum cocktail served in its signature shaker.

The company strives to create a unique and memorable customer experience at each of its locations. The company designs its restaurants to have flexible seating arrangements that allow it to cater to families and parties of all sizes. The company’s site selection process focuses on conversions of existing restaurants, as well as new ground-up prototypes in select locations. The company’s restaurants are open for lunch and dinner seven days a week. The company serves approximately 4,700 customers per location per week or 244,000 customers per location per year, on average, by providing high-quality, freshly prepared food.

Strategy

The key elements of the company’s strategy include pursue new restaurant development in existing major markets with proven high average unit volume; backfill smaller existing markets to build brand awareness; deliver consistent same store sales by providing high-quality food and service at a considerable value; and leverage its infrastructure.

Real Estate

The company owns properties with a free-standing restaurant in Indiana, Oklahoma, Arkansas and Texas. End-cap restaurants are highly visible locations at one of the ends of a retail development whereas in-line restaurants are locations that are between multiple retail locations within a development.

Excluding patio space, the company’s restaurants range in size from approximately 4,700 to 10,300 square feet, averaging approximately 7,500 square feet with seating capacity for approximately 200 to 400 customers. Nearly all of the company’s restaurants feature outdoor patios averaging approximately 1,000 square feet. The initial terms of the company’s leases expire between 2023 and 2043.

Sourcing and Supply

The company relies on one national distributor, Performance Food Group (PFG), and various other suppliers to provide the company’s beef, cheese, beans, soybean oil, beverages and its groceries.

Intellectual Property

The company owns registrations from the United States Patent and Trademark Office for the following trademarks: Chuy’s; Chuy’s Mil Pescados Bar (stylized lettering); Chuy’s Green Chile Festival; Fish with sunglasses (its emblematic fish design); and Chuy’s Children Giving to Children Parade. The company has also registered its chuys.com domain name.

Competition

The company’s main competitors are full service concepts in the multi-location, casual dining segment in which the company competes directly for real estate locations and customers, including Texas Roadhouse, Inc.; Cheddar’s Scratch Kitchen; and BJ's Restaurants, Inc. It also competes with other providers of Tex-Mex and Mexican fare and adjacent segments, including casual and fast casual segments.

Seasonality

The company’s business is subject to seasonal fluctuations with restaurant sales higher during the spring and summer months. Adverse weather conditions during the company’s favorable months or periods might affect customer traffic.

Government Regulation

The company is subject to various federal, state and local laws affecting its business, including laws relating to immigration, employment, minimum wages, breaks, overtime, tip credits, worker conditions and health care, nutritional labeling, nutritional content, menu labeling and food safety and information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud; the Americans with Disabilities Act, which among other things, requires its restaurants to meet federally mandated requirements for the disabled; and environmental regulations concerning the handling, storage and disposal of hazardous materials, such as cleaning solvents, and the operation of restaurants in environmentally sensitive locations may impact aspects of its operations.

History

Chuy’s Holdings, Inc. was founded in 1982. The company was incorporated in Delaware in 2006.