Q3 2019 Earnings Call
Good day, everyone and welcome to the Chuys Holdings third quarter 2019 earnings Conference call.
Today's call is being recorded.
Participants have been placed listen only mode and the ones will be open for your questions. Following the presentation.
Today's call we have Steve.
President and Chief Executive Officer, and Jon Howie, Vice President and Chief Financial Officer.
He's holdings incorporated.
Turning the conference over to Mr. Howie. Please go ahead Sir.
Thank you operator, and good afternoon by now everyone should have access to our third quarter 2019 earnings release.
Got it can be found on our website www chuys dot com any investor section before we begin I'll review formal remarks, I need to remind everyone that part of our discussion today will include forward looking statement.
These forward looking statements are not guaranteeing for future performance and therefore, you should not 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 too.
TC pipelines for more detailed discussion.
Impact our future operating result in financial condition.
That all the way I'd like to turn the call over to Steve.
Thank you John Good afternoon, everybody. Thank you for joining us on the call today.
We are pleased third quarter performance highlighted by increasing adjusted net income.
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During the third quarter grew approximately 8% and we posted a six consecutive quarter of positive comparable restaurant sales.
Also successfully improved profitability, what an 11.4% increase in restaurant level operating profit and a 50 basis point increase in must stop 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're making up.
Various initiatives, we put in place to drive sustainable topline 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.
In our target targeted marketing campaigns continue to benefit our results as we have experience improved sales in our Houston market. Since we began our efforts there in April 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 <unk>.
TJX highway signage and advertising on digital platforms like you to cool and ways as we continue our campaign in Orlando will walk is similar campaign and our Dallas market. During the fourth quarter again, our goal here is to focus on certain markets each quarter to better address educate our customers on the chuys experience and.
And drive frequency to our restaurants.
On our continued investment in technology is equally important our effort to improve our business during the third quarter through our partnership with wisely. We completed the system wide implementation by new table management system that we believe will help us 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 the too.
10 watts services to capture email addresses which can be tied to our guest ordering during their business as well as ahmad ultimately well be able to use these integrated intelligent indices as the foundation of our future loyalty program and allow us to market market targeted offerings to specific customers far more personalized.
His experience.
With regard to throw 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 yearend, our catering offerings will be available on 11 markets for the third quarter catering contributor approximately 1.5 million in revenue compared to 369.
In the same period last year.
During the third quarter, we also tested the dispatch service and two restaurants as part of our partnership Oh, though.
Early feedback has been very positive its customers now have access to various delivery options direct from our website.
Our 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 past we will continue expand dispatched more stores during the fourth quarter.
Oh, that's what they systemwide <unk> by the end of first quarter 2020 [noise].
Finally, we are currently in the process of negotiating national contract with the delivery provider, which well then integrated into our point of sale system to make a 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 and Carmel Carmel, Indiana, which were followed by opening of our second restaurant in Columbus, Ohio market in the fourth quarter. We've now completed about 2019 development plan for Oh, six new restaurants, and also cats was made possible through our operators and development teams.
Ability to instill the food culture in such a short time.
Looking at 2020, well continue to employ.
Well its 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 a successful expansion and the years to come through I Psycho graphic profile of our customer base created from our.
Top markets, we've been hard at work in developing and testing this tool and was up 40 utilizing it.
And for our 2021 development.
Finally, we also have a strong balance sheet that gives us flexibility use our excess capital to create additional value for our shareholders to that and subsequent to the end of a third quarter. Our board of directors approved and do 30 million share repurchase program that runs through December 31st 2022 that won't.
Place our car program that was set to expire at the end of 2019. We believe this authorization is indicative of the confidence we have in our core business our ability to continue grow to choose 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 quarters numbers.
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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 grew up these increases were partially offset by decrease in cells from non comparable restaurants that are not included an incremental revenue just mentioned in total we had approximately 1300 38 operating weeks during the third quarter of 2019 comparable restaurant sales.
<unk> increased 2.6% during the third quarter included 4.5% increase in average check partially offset by 1.9% decrease in average weekly customers.
Active pricing during the quarter was approximately 3.7%.
Turning to a discussion of selected expense line items cost to sell at the percentage of revenue increased 70 basis points to 26.3% driven by unfavorable beef prudent produce dairy pricing and partially offset by favorable pricing and chicken in grocery all in all commodity inflation for the third party what.
Through the third quarter was approximately 7% with the expected decrease in produce pricing, we expect commodity inflation in the fourth quarter ever, possibly 2% to 3%.
Labour costs as a percentage of revenue decreased approximately 850 basis points that 35.5%, primarily due to menu price leverage increased labor efficiency at new store openings and lower training expense for new managers. This was partially offset by hourly labor rate inflation on are comparable stores of approximately 3.1%.
Operating cost as a percentage revenue held steady at 14.8% compared to last year's quarter.
Marketing expense as a percentage revenue increased 40 basis points to 1.4% driven by our ongoing national level marketing initiatives as Steve discussed earlier.
I don't see costs as a percentage of revenue decreased 10 basis points to 7.5% as we leveraged our fixed occupancy cost on higher sales, partially offset by higher rental expense that certain newly opened restaurants in 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.
As a 1.8 million or 11 cents per diluted share compared to a net loss of 7.5 million or 44 cents 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 35 cents per diluted share, which included a noncash loss of 7.1 million.
Related to impairment of assets have five restaurants, and point 2 million of closure costs associated with two restaurants closed in the first quarter of 2019.
And the third quarter of 2018, we also recorded a noncash loss of 12.3 million or 11 million net of tax equal to 64 cents 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 25 cents per share from 20 cents per share in the same period last year.
We ended the quarter, what 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 your expectation for 2019 adjusted earnings per share due between to be between 98 cents <unk> dollar one from our previous range of 93 cents.
The 97. This compares to 2018 adjusted earnings per share.
88 cents our guidance is based on the following updated assumptions, we now expect comparable restaurant sales growth for the year of 2% to 2.5% versus the previous range of 1.5% the 2.5%.
We continue to expect the restaurant pre opening expenses of approximately 3 million.
We expect Gionee expenses between 23.8 million at 24.1 million from previous range of 23.69 to 24.1 million our effective tax rate is expected to range between 2.2% to 5% versus range of the represent 5%.
And we are modeling annual weighted average diluted shares outstanding of approximately 16.8 million versus the previous range of 16.9 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 protected between 20 629 million with that I'll turn the call back to Steve to wrap up thanks, John the initiatives. We the initiatives. We have in place are are they pretty.
Leasing results and while we still have more work to do we have now laid the foundation for a healthy company in a long run.
Together with a disciplined development strategy. After a period restaurant operations, we have the opportunity to further improve our profitability what 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 chuys employees, what that we're happy to answer any questions. Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before price and the keys to withdraw your question. Please press Star then to.
This time, we'll pause momentarily to assemble a roster.
[noise]. Our first question comes from will Slabaugh what people think please go ahead.
Yeah, Thanks, guys congrats on the quarter.
I don't think went up or yeah first on on labor, We don't often see these days dropping 150 bips year over year. So I was curious how you're thinking about that improvement from standpoint of either labor efficiencies new store efficiencies pricing I'm sure played into that to a degree or anything else you wanted to add.
Well a lot of that I I'd tell you is is a a lot of leverage we haven't had the levers like doesn't it in a while the other thing is we continue to work on hourly efficiencies in mainly opening new restaurants, and like we said last quarter.
Variability of the openings in the last half of this year versus last out last year is significantly less and so we're expecting some efficiencies there Justin openings, but we saw about 50 basis point decrease in hourly labor and then most of it by 80 basis points was in MIT training, which is where.
Most of it wasn't than the rest wasn't just regular management labor ours, where we are trying to reduce the parks.
So we are seeing some progress there and we're working forward to keep keep that progress go on but yeah. I mean, the things that we've put in place or last year or two is starting to.
Come to fruition so.
Great.
And I want to ask you about marketing as well Wonder if you can talk a little bit more about the results off in 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 and then move that in Orlando in Dallas, or if it's too difficult to sort of discerned what was successful versus not as much.
But the key for us as as we do what we do do the targeted marketing that gives it a little extra boost but the key for us it's been a paid social and everybody got paid digital that's where a matching and again that's a long term effort. That's more a long time as it goes it starts a little color, but that it gets a slow build and that's what we've been able to see specifically in the Houston market and overall.
You did it all in one quarter in Orlando and starting to look the exact same but really what's cool about social and digital what's working and can do a lot of and why doesn't work and you can switch and that's what we're really been doing members 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 a that much.
And before so this is the first time early this year has gotten out in front of the guest and.
Introduce some about defining differences are really worked on the frequency of I've done fought and get people and so we're pretty excited about it but again what isn't work and we can immediately pivot and then try and move into something that we feel is working.
Great. Thank you.
Oh.
Our next question comes from David Tarantino with Baird. Please go ahead.
Hi, good afternoon.
My my first questions on like comps for the third quarter Jot. It looked 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 mix on there and a lot of that was our bar menu.
You know we're trying these new premium tequila drinks that have been going very well.
So some new drugs in the bar and then secondly, our bulk related to.
Our catering and to go is up and that's really driving that mix. So without the mix. We're right around that three seven 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 tier four.
Doors rolling in and what took a little bigger price increase on those stores.
So that's kind of what's driving that 4.5.
And as John as they are the mix component in the medicine is that something that you think and carry over into the next couple of quarters.
I think you know the bar is really driven by our quarterly promotions and so it really you know we'll continue to to try to drive those Barcelona.
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 pull back and we usually do them at the same quarter ever year, where you havent begun drink so you'll probably see us have normal promotions and the bar and then probably every day.
Third quarter, you'll see us to repay a larger drink a this stay consistent with our approach.
And then obviously like to a bulk and Maria increasing due to go and as the bulk of continue to rise as we can continue to add.
Two stores two markets every quarter, what the catering vans.
Got it and then on pricing.
3.7, as maybe a high high water Mark.
Versus what we've seen historically, so and that if I'm not.
Maybe correct me, if I'm wrong time, but that that might be running ahead of what the total inflation.
And the businesses. So just im just wondering what the philosophy as I'm Crazy thing, especially as I think about you know what your plans are for next year on that soccer yeah.
This is Steve you know you're right and the last yes, 10 years, we it until 2019, Oh, we've averaged probably one of the three quarters one in Threeq wants to around two I. Just wanted on just on paper it was around right around that to live in three quarters. The three and then mix changes moved it up.
What we did all the time is obviously look at what the market bears and we want to be the value in every market and we continue our during the years there were only doing one in three quarters to to our value spread to somebody who is actually got larger and larger and all our tier. So we felt we had some room compared to our competitors as we move favor for I mean forward.
You'll see us probably in that two two plus depending on where we're at and that the competitive market places, where we want to be the value, but you'll probably see us above the two number two plus in the upcoming yeah.
Got it and then.
Maybe a related one are around this topic traffic has been.
Slightly negative and then another industry conditions are.
And all that great, but I guess, what's what are you think the keys are getting back so flat or positive on that.
I'm sorry go ahead.
No.
Sorry, I I'll, let you respond sorry, yeah, the key for us its execution need what we've talked about what we've done for the last two years and we're going to continue to do it is our tours approach to our restaurants as as you know dive into our four walls, because that's where it I always ends and obviously, we're looking outside the four walls, but a little bit marketing I've learned a time this year I'm can expect us to learning.
About more as we go into our second year of how to market, our stores shop properly and especially new and existing markets, but in the day, we want to put the hospitality back into our restaurants or like a into the restaurant entries posted so I said, we want to looking at hospitality and making sure we're staffed to grow a notch staff to maintain.
A wall or being real efficient, we need to make sure that service levels are going up.
And those are the main things as Ed said, but then are writing centerfold balls, we have to not be crazy stuff that some of our competitors are doing and worry about executing our R&D off and Weve no long term networks for us I think I think.
David If you look at kind of our existing stores that were in our can comparable base at the end of last year I mean, they take out all the noise, they've been averaging down about 1% and traffic, which because our headwind this quarter was close to 100 basis points.
And so if you look at that compared to the industry average casual dining 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 so and also the difference between a 1.5 million and 400000 and bulk is making sure that we're getting the bulk Collins right on that catering.
You're welcome apples to apples.
Got it alright, thank you very much.
Thank you [noise].
Our next question comes from Chris Ocull with Stifel. Please go ahead.
Okay.
Thanks, John the comp guidance seems to indicate you expect comps maybe just slow here in the fourth quarter is there any reason for that outlook.
You know.
We ran.
Comparable to what we've been running a little we're still above too, but not at two and a half and so I just brought it down a little bit just because of that.
But it's been running pretty consistent if you look at the period by period for a period through her for Q3 or it was consistently between two four to seven each period a.
A little bit and as I told Don a you know I'm pretty optimistic still and you know right in that expectation for the third quarter.
We had.
You know my Boston Red Sox around the World series, It didn't help us having Houston and the nationals, where we have stores in the World series for seven game Dell So that hurt US and then we had a little bit Oh real cold weather down in the south that affected us a tiny bit where we had good weather last year for the first month. This quarter. So I am at should be right in there that trends have been right.
Similar yeah.
Okay. That's helpful and then.
It 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.
We understand how that works together.
Well I mean the dispatch.
Obviously, the third party provider the people go to their website to order Chuys, we want them to come to our website order chuys. So the dispatch they come to our website and then they can ask or pick up or delivery when asked for delivery in auction takes place in 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 picking up the dispatch and so its higher margin.
Obviously since we're offsetting that whole delivery cost, but then also driving people to our website versus the third parties. So we can get their information and everything.
And it also.
And it also the one thing I forgot it also obviously more efficient because that drives it right to the kitchen Usan dispatch he goes straight into our kitchen, it's integrated where third parties are still on a on an IPO had out there.
So if you're looking at a partnership with a third party aggregator first are you using that or is that third party provider offering chuys today and then also do you expect to I mean have it fully integrated with your point of sale system, so that it will be easier.
Operationally to execute.
Yes. So currently it is not a once we get the national contract signed it will be integrated will actually be integrated through the rails product through a low.
Since its already set up 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.
What do you suspect you would get some sort of promotional monies associated with that partnership is that 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 when we when we launched the with them. There are some I mean I don't want to go too much into that as we have signed yet Chris but there are some opportunities when we launch that with them, but some marketing dollars behind that.
Okay, great. Thanks, guys I'll.
Thank you.
Our next question comes from Nick said with Wedbush Securities. Please go ahead.
That congrats on another great corridor, the marketing Thanks next step up.
Marketing step up this year is clearly having you know some really good results.
Is there any thought to maybe having another step up as we go into 2020.
Probably you know Chris we have actually we have to big meeting coming up or we're going to review everything that we did.
And this last year.
And I think that's for sure you'll see us probably right around that.
I'm, sorry, you'll probably see a stay right around that spend about about a 1.4%, but you will see us probably get really focused on defining what work and what didnt, whether on all right ROI process. So we might spend it differently, but it's still being within that 1.4% of sales.
Got it a you know 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, you might be a scary year in terms of a commodity inflation or.
You know how does that at least early on as it looking more manageable.
I think right now I mean, I think the biggest scare out there that everybody's talking about the swine flu over 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.
Pretty decent prices that were comfortable with next year, a clear through the end of the year to eat a beep through 11 months of in ground beef through the rest of the year. So we feel pretty good at that I think we can keep manageable in that one to three and that's really dependent upon qualifying that on on mother nature and produce because we do not locked that in enough. That's the one.
Big driver that always drives our cost itself is probably as you might have a little bit.
We might have a little bit on the chicken because of that but we still feel pretty good about out.
Got it I'm 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.
Uh huh.
Again, if you have a question. Please press Star then one.
Our next question comes from Andrew There looks like 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 as or do you have any sense that the incremental pricing is impacting your traffic trends or maybe some of the catering is having an impact there.
At whereas maybe you know as we roll into next year with less of a pricing component that maybe that removes some of that headwind.
Right now I guess I think the biggest disturbances, what John said about a 1% which is better than it was the prior year I think we're just going to keep chipping away at it and I know I don't believe that again, what the key is and I'd be went about market or name price increase is will be the best value. When every market than I am which we have been ends there still are.
So we've not.
Had any information on any and price increases bothered us and the big thing change for US has been the amount of catering never come down year over year.
Okay, and then on some of the customer data that you've been collecting which ultimately will lead itself to to the loyalty program are you able to mine any of that data now and I'm curious if your.
If there have been any kind of early learnings are surprises are interesting tidbits that you digit glean from that so far thank you.
And what we've been mining now, it's only been into stores and I'm going to roll that out too.
A few more about 40 ended the year and we'll probably have a completely rolled out and at the end of the first quarter 2020, that's when we'll be really starting to really use that information and Telltales I will ask so you tell you know what we'd also be on although ordering and and in store dining. So we'll know what theyve had another will have the emails and so forth. So we can that more target.
Good marketing to individual people.
But we got right you got a little ways to get that completely implemented.
Understood. Thank you very much.
Roger.
Our next question comes from Brian Vaccaro with Raymond James. Please go ahead.
Thanks, Good evening up just wanted to circle back on the constant could you provide a little more color on the cadence that you saw through the quarter.
Any comments on regions or Texas versus newer markets and then would you be willing to comment on on your quarter to date comp trends.
Sure Brian like we are saying before basically the cadence during Q3 was very consistent low be into four high be into seven so is very very consistent during the third quarter, we see other than like Steve was saying other than some of the softness around the world series since those two.
To participants were in our markets, especially one of our bigger markets being Houston, we didnt have some softness there, but the underlying trend is still take that way the underlying trend is still there.
Okay and would you comment on quarter to date or.
Yeah, I mean as well as I'll, just say is 2.2% for a period 10 because of some of the softness with ER with World series.
Okay, all right and sorry, if I missed it but what was off premise sales mix in the quarter and how much of that was delivery.
Sure the off premise was about 12.9% and an 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 are markets, where you might add hours or perhaps utilize handheld there or something else to drive hospitality and could you also provide an update on turnover. Thank you.
Sure Great great questions.
Well, we're looking at as we're looking at Dod test testing and getting stuff out there. We're looking at a handheld and pay at the table that we think is going to help our efficiency and keep them servers on the floor, even a little bit more to really work on salesmanship and making sure when taken care of the customers the way they like to be taking care of.
Just hospitality all the way of onto a simple agreed to a simple opening the door, which all everybody can ask always constantly work on.
And our turnover as a probably at a five year low it's at.
89% hourly and that's the lowest and and in a long time. So we're pleased with the our our retention rates in our stores.
Alright, great. Thank you very much.
Sure.
Our next question comes from Bob Derrington with Telsey. Please go ahead.
Yeah. Thanks, Steve you would I think once once said that.
You're not playing to really grow the system until you get traffic back to positive.
On the other hand, you know I know that you're a new real estate tool.
You know looks to be pretty encouraging about finding good site.
How do you reconcile those two as we look into the future.
The key thing Bob as I've mentioned on the real estate tool, we're still in the testing process on that will probably really roll that out and in 2020 wanting to be on our store by store basis. So we're still in the testing mode on that to make sure we're making good decisions and it's given us an i. I guess, that's not a save all its just one.
Another piece of the puzzle of by I've actually real estate. So it's not to save all but a a key element to add that psyche graphic piece into it and go from there but.
The key for us as as we need to be up in customer that's the customer causes a life blood 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 see the stores similar to this year for next year, we believe will work out into right direction to make that happen and we're going to continue on the direction. We also.
Got a lot more initiatives that we've talked about whether it be widely are the things John said earlier that we want to really get integrated into our business and for us to really look at you know in 2021, hopefully moving that number back up.
[noise] you've had some really good encouraging trends and I'm just wondering if if this is kind of like a line in the sand that you have to have our you know listen at Traffics, a little bit negative you know it it's not that big a deal. So you know is it reasonable that development could increase with better site selection in the future.
Even though traffic maybe a scotia still negative.
I'm, a you know me, Bob I'm fairly stubborn, but well look at it all things on the table at that particular, Todd, but I need to see a trend as strong straightened out on customer accounts.
Gotcha and.
Quick follow up on the the impairment charge during this quarter or I believe there are five was at five new stores that have now been impaired.
Restaurants, and you know is it likely Steve that we'll see some closures of those.
You know you know Bob.
To close the stores is a big thing one of the last resorts in and out of respect of all our employees were not that I mentioned, the store closures or discuss store closures until a point in time to that would happen, but we continue to look at that.
So I'll just leave it at a.
You know I guess when 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 right so to speak.
No I mean, we were finding some improvement in like are saying on some of the.
Priority stores with with some of the Taco Tuesday isn't in are you to Wednesdays and a market and our mark and Margarita. So we're fine in some ways to drive sales there and then in margins.
But again I think like Steve said.
You know theres, a store that that needs to be close we will you know, we'll assess it at that time and make sure that we don't we make the right decision and don't prolonged yeah, just make sure we're using the human capital properly.
Gotcha, Okay. Thanks, guys.
Thank you.
This concludes our question and answer session I would like turn the conference back over to Steve Hislop for any closing remarks.
Thank you so much John and I. Appreciate your continued interest in choosing will always be available to answer any and all questions again. Thank you don't have a good evening.
Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.