Q4 2020 Chuy's Holdings Inc Earnings Call
[music].
Good day, everyone and welcome to Chili's Holdings fourth quarter 'twenty 'twenty 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 of won't be up and for your questions. Following the presentation on today's call, we have Steve Hislop, President and Chief Executive Officer.
And Jon Howie, Vice President and Chief Financial Officer of Chewy Holdings incorporated at this time I'll turn the conference over to Mr. Howie. Please go ahead Sir.
Thank you operator, and good afternoon by now everyone should have access to our fourth quarter 2020 earnings release, if not it can be found on our website at www <unk> 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 a guarantee of 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.
We refer all of you to our recent SEC filings for a more detailed discussion of of the risks that could impact our future operating results and financial conditions.
With that out of the way I would like to turn the call over to Steve.
Thank you John Good afternoon, everyone and thank you for joining us on our fourth quarter earnings call at today, I hope, everyone is staying safe and healthy.
I am pleased with the results of our fourth quarter, which like most of 2020 required us to adjust our business on the fly as a result of a changing external environment, the resiliency and flexibility of our team resulted in sequentially improved comparable sales in the fourth quarter compared to the third quarter and adjusted earnings per share.
Of 19 cents. This despite the closure of a number of our dining rooms in November and December due to the heightened COVID-19 restrictions during what is typically a very productive time of year for our restaurants. Despite some weather interruptions and we continue to be pleased with the overall direction of our first quarter sales trends at.
As in dining restrictions have been relaxed in many areas. While we are cautiously optimistic for a steady return to a more normal operating environment. Our teams will continue to stay focused and nimble and an external environment that remains unpredictable.
Turning to the fourth quarter profitability on continued focus on cost management and operating efficiencies resulted in an approximate 10% improvement in restaurant level profitability compared to the same quarter last year as our margins improved 600 basis points. Despite an approximately 23% reduction in sales due to the.
Paying debt, we are confident that even as we ramp up dining room operations and returned to a new to a more normalized level of operations. Our efforts throughout the year, we will have a lasting positive impact on our profitability again, none of this would've been possible without the dedication and hard work our team members and serving our guests all at the same.
Hi on keeping them safe and healthy.
Since the onset of the pandemic there have been three key pillars that have resonated with our guests safety convenience and value.
Continued uncertainty even as we enter 2020 on 'twenty one we believe these close remains crucial.
Two of not only got us through the current environment, but also help our company to emerge stronger when this pandemic subsides.
Quickly update you on on these pellets.
Safety continues to be at the forefront of of all of our activity and as we've spoken about in the past we are investing in technology to help us not only improve the end restaurant peace of mind for our employees and guests, but also create efficiencies that can help our business long term along with a pay at the table device that we noted last quarter, we continue to look at.
Of the payment methods, including QR code payment and pay by Tech solutions that we're testing in several of our stores. While early feedback has been positive. We will continue to look for ways to minimize contact points with our servers, while we still provide the best in class hospitality of the Chili's is known for.
Convenience.
It is also an important factor during this uncertain time and of off premise business has given our guests' additional opportunities to enjoy off of our off premise business remained strong during the fourth quarter, maintaining a mix of approximately 33% of revenues at a rate of more than double of our pre COVID-19 levels. While all of this mix will likely receive.
At our dining room capacity has returned to historical levels. We believe we can continue to hold off premise mix and the mid twenties rate due to the handful of on convenience on how well our food travels all at all we believe our guests appreciate the unique appeal of our high quality made from scratch food and drink and we continue on drove strong demand.
In all of our offerings through all current avenues of our business Lastly, we continue to grow our value, but not only streamlining on menu, but also offering convenient family meal on beverage kits, while we have no plan on making major changes to our menu of at this time, we expect to add back several popular items and restarting our digital Mara.
Can you get rich to further drive awareness on our current unique offerings.
Turning to development for fiscal 2021, we are targeting between four and six new restaurants, one of which opened in February in Pembroke Pines, Florida.
The operational changes we have made of US as a result of Covid has served as a learning tool for our development team as we look at on a long term development plans. We would expect at increased use of our smaller prototype to provide the same unique dining experience for our on premise guest but also better allows us to execute increased off from.
Expenses for the safety and convenience of I guess, what's that I will now turn the call over to our CFO, Jon Howie to discuss our fourth quarter results in greater detail.
Thanks, Steve revenues for the fourth quarter ended December 27th 2020 decreased to $78 7 million compared to $102 million at the same quarter last year, primarily driven by traffic declined due to COVID-19, including the loss of 145 operating weeks due to the various closures of restaurants.
The fourth quarter of 2019, and the first quarter of 2020 in total we had approximately 1100 96 operating weeks during the fourth quarter comparable restaurant sales decreased 18, 3% during the fourth quarter and included a 24, 3% decrease in average weekly customers partially offset.
By a 6% increase in average check our off premise sales remained solid during the fourth quarter at approximately 33% of total revenue compared to 14% in the same period last year. Please refer to today's earnings release for our fourth quarter sales cadence by period turning to expenses.
Cost of sales as a percentage of revenue decreased 170 basis points to 24, 4%, primarily as a result of switching to a limited menu and eliminating our complementary.
At Star Buffet style chips, and salsa Nacho car, partially offset by 70 basis points increase in the cost.
Of beef and 20 basis points increase in the cost of chicken overall commodity inflation for the fourth quarter was approximately two 5% based on current trends. We are currently expecting of modest commodity inflation rate of one to two 5% for fiscal 2021 labor.
Labor cost as a percentage of revenue decreased approximately 600 basis points to 29, 7% primarily due to reduction in hourly employees in store management personnel as the company has transitioned to an off premise heavy operating model.
With reduced dine in capacities, coupled with the hourly labor rate deflation of approximately three 6% during the quarter operating cost as a percentage of revenue increased 50 basis points to 15, 7% compared to last year's quarter, primarily due to increases in delivery service charges and.
To go supplies as a result of the growth in off premise business, partially offset by lower credit card fees insurance costs and liquor taxes marketing expense as a percentage of revenue remained relatively flat at one 1% as we resume our digital marketing efforts, we expect our marketing spend will increase to approximately one to pursue.
Net of revenues for the first quarter.
Occupancy cost as a percentage of revenue increased 100 basis points to eight 7% primarily as a result of the sales deleverage of fixed occupancy expenses.
General and administrative expenses increased to $6 million in the fourth quarter from $5 $7 million at the same period last year, primarily driven by discretionary bonuses as a result of the improvement of the restaurant level operating margin above industry standards. During the COVID-19, pandemic, partially offset by reduced travel professional and legal fees and other <unk>.
As a result of cost saving measures in response to COVID-19.
In summary, net income for the fourth quarter of 2020 was $1 8 million or nine cents per diluted share compared to a net loss of $1 4 million or <unk> <unk> per diluted share in the same period last year in comparison during the fourth quarter of 2020, we incurred a $2 8 million in impairment.
And closed restaurant costs as well as $8 1 million in deferred tax adjustment in conjunction with the carriers at during the fourth quarter of 2019, we recorded impairment and closure costs of $6 3 million, taking all of that into account adjusted net income for the fourth quarter of 2020 was $3 9 million or <unk>.
19 cents per diluted share compared to $3 3 million or <unk> 20 per diluted share in the same period last year.
Moving to our liquidity and balance sheet as of the end of the quarter, we have $86 8 million in cash and cash equivalents, no debt and $25 million of availability from our revolving credit facility with ample liquidity and strong financial footing as well as positive sales trajectory and resilient team members. We believe we have the means to.
<unk> be incurred at the current environment before I turn it back over to Steve I'd like to quickly discuss our limited outlook for 2021, while I'm not at a position to provide you with our usual financial guidance I would like to give you. Some directional metrics that would be helpful. As Steve mentioned earlier, we will be opening four to six new restaurants in 2021, we.
Expect net capital expenditures net of tenant improvement allowances of 15 to 25 million and lastly, we expect restaurant preopening expenses of $2 million to $3 million in 2021 with that I'll now turn the call back over to Steve.
Thanks, John.
Well there are still of lot of uncertainty surrounding the pandemic. We believe the work we've done to date has positioned us to be a stronger and more efficient company. We are cautiously optimistic about the strength of our business and remain nimble to the ever changing market conditions and as we begin 2021, we will also remain prudent with our cash.
It'll expenditures and ensure that everything we do going forward will be done with the health and safety of our team members and guests at the front of our mind.
With 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 you are using a speakerphone. Please pick up your handset before pressing the keys if at any time of your question. That's been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Great.
Our first question will come from David Tarantino with Baird. Please go ahead.
Hi, good afternoon.
Just a question on sort of the quarter did they trend just so that we understand the dynamics, but thank you for giving us the number for the first period, but.
Recognizing the second period of Might've had a lot of disruption from weather I'm. Just wondering if you could give us an update on what you've seen through the through the whole period so far.
Yeah. We you know like we said we started off at rack.
At the well and very period, one and in the first two weeks compared to before this historic Cold front end of snow that came through Texas and a little bit in the southeast.
We were affected approximately.
About $1 million <unk>, probably from that end sales too.
And then those two weeks and then we bounced back that far away from the very strong week of sales because of a lot of people still didn't have power of the pool of people down here. So we did bonds backed out of the ones and the trend lines are all doing fine right now.
And so I guess.
Steve or John I mean could you maybe just clarify on what that mean in terms of what your comps of than quarter to date or.
Yeah. If you wanted to talk about maybe what the exit rate after the weather cause worldwide.
Just to give us a sense for how the business is running.
Hum.
So quarter to date.
If we're looking at debt would be.
Right around 19% down.
And like we said a lot of that's a lot of that is.
From those two weeks.
We had some as you can see a better a better trend line in January and then it went backwards in February because of that but it's come back strong since then.
Great.
Thank you for clarifying on that and then Steve.
My question really is kind.
Kind of on the longer term outlook related to unit growth and I wanted to see if you could maybe elaborate on the smaller prototype you've mentioned that.
That being on playing a more prominent role.
And then also yeah, perhaps you know kind of you know Parker.
Talk about the strategy on site selection on.
And how you're planning to approach kind of getting back to the pace of unit growth that you talked about in the past double digits is that going to be more about kind of growing within your current footprint or is it kind of end selling or are you thinking about the market.
Related to that.
Yeah.
Kind of update us on on the site selection of tool that you're using as you approach those.
Well that was good five questions of good job.
Yeah.
The first thing is of smaller probably at all it's basically.
We started at and that's really will start actually in 'twenty, yes to all of us at <unk>.
'twenty one all of the store and we don't know.
Because all of the stores. We're opening this year of of four to six are ones that we hadn't of pipeline for last year.
And they are of different sizes and again at the prototype is just we still love hermit crab and so we'll still be doing a lot of that but the smaller prototype will be in that round 55, 5600 square foot range of little bit more enhanced to go area and this packaging area, probably a little bit larger patio, but you'll all of them.
We're expecting some good sales out of that but it's obviously less employees to work at specifically in the front of the house.
And then you know.
As we've mentioned in the past and correct me if I stop me if I Miss any of these questions that you had.
Well, we're looking at like four to six of share and I think we've said six to eight the following year then you'll see us at the single the low double digits from there on out probably starting back in 'twenty three.
And we're on debt as well as far as where we're gonna be going right now, we'll probably going to be looking at putting the stores all of them only in all of our existing markets, specifically you'd probably end of the next three years, you'll see everything will be done on the backfill side of our business and and so youll see us probably stay in our backyard, but like I said the next three year.
Some of our growth.
Proven high AAV sure basically the existing markets that have strong brand awareness and why don't you tell him a little bit about the sight tool.
Well no we continue to enhance the site tool. That's the one that we're looking at in 'twenty 'twenty. Two I mean, we've looked at a number of states that we believe we have high.
A.
High brand awareness of and we've looked at the sight tool and it's given us with this new kind of sales volume and kind of at a 3.5, we believe it gives us a lot of opportunity to backfill some of our bigger metropolitan areas, whether its Dallas Austin <unk>.
Houston Nashville.
Some of those and put more sites in there without cannibalizing the sales from the other stores because looking at of $3 five but also allows us to go into smaller markets, where before we were looking for a four point to now.
And going into like in Abilene, or a long view or somewhere like that here in Texas. So I think it opens up a lot more markets.
We're looking at that kind of volume no I think at some of those markets, we're still going to see some higher volumes, but when we're looking to pick of site. We're looking at kind of that and where we can backfill on some of these very.
These these are areas that we have high brand awareness.
I think that was most of the questions that you have.
Yes at the actualized jargon, sorry for throw on them all.
Thank you Buddy.
One one other ones on what what are the desired or projected unit economics on that $3 5 million and at 55 I assume that's the volume you would one of them at 5500 square foot prototypes, but what are you looking for from a unit economic perspective, you know I think with what we've learned.
During the pandemic, that's what's exciting about it with what we've learned from the pandemic I think we can get.
Those high teens restaurant level margins, you know in that 17, 18% of if not a little higher depending upon in the areas that we're talking about with lower cost to run those restaurants. So we're still looking at that 30% return on investment I'm you know end.
And looking at.
Investment of in the mid twos to three.
Going forward. So we're looking with our national contractor to not only revamp of our design, but also.
Re engineer our value engineer the building itself. So we're looking at reducing some of the cost there as well and that's not only just on a prototype but that's on on the Remodels that we also out of it.
Okay, great. Thank you very much.
Welcome Dave.
Our next question will come from James Rutherford of Stephens. Please go ahead.
Hey, Thanks for taking the question congrats on the quarter here.
A lot just kind of I just wanted to start with Texas and just how you all will approach your Texas restaurant now that you have some.
Some latitude to make your own decision about capacity, maybe if you can talk about kind of where capacity was before the new rule and where you think that might go during the first quarter. If you expect any changes at all.
Yeah, right now of the capacity that we've been at is probably in our restaurants with the six foot distancing, we're probably been on 50% capacity because most of our restaurants are tables, although our dining sales is right in at 65% because of our patios would also.
And and then initially I don't see that changing a whole bunch of everybody's coming out at down here on everybody's keeping all of the restrictions and obviously now those big fights with all of the mayors and the governor of.
Of all of what they wanted to see done into markets compared to us, but as far as us we're going to maintain the six foot distancing and at our stores for currently and we're also just going to be pushing the flow through of that and we're all going to be wearing masks on my restaurants from the safety of our employees and the.
And at end of customers that are coming in.
And as time goes by as people get more customer will start.
Grow on that as long as we don't go backwards as a community will be growing that.
And then we'll be hiring more people to get into the come in and worked at servers and so forth. Then we will expand at as people get more comfortable with these new.
New.
Information from our Governor.
Okay, Yeah debt will be great to see I also wanted to ask about the hourly wage inflation that you all saw that seems unique compared to some of the restaurants that were that we also cover is that due to the mix of restaurant that you're operating today I think you've closed a few since the fourth quarter of last year. So maybe what's what's driving that or is it states.
Specific.
Are you talking about the deflation rate, we had DRA deflation I misspoke, yes of deflation.
Yeah.
Sort of at I'd tell you James is driven by the front of the house of all week.
Yeah, It's all of the front of the house and it's offset by some increases in the back of the house end.
When we win.
When we went to go only we kind of made of.
Companywide EBITDA, if you will.
To pay the minimum tipped wage because we felt of that.
Of that you know the tips, because we reduced the staff down to very low to do to go only so there are several just several people that were running at that to go out and they would get a lot of chips and they did I mean, we had kids that were walking home with 300 Bucks a day if not more.
And so they were making more money and we brought that tip wage because of the past with our with our to go not being very strong we had people, making 10 12 Bucks an hour of there. So a lot of that was was that kind of edict that we made and bringing that price down of debt. That's overall and as we've hired people back.
We still have is that we still have that strong to go and so we were able to hire them back yet at more in line with the nation or not the nationwide, but the specific statewide tip wage.
Okay. Thank you I'll turn it back to the queue. Thank you. Thanks John.
Thank you.
Our next question will come from Nick <unk> with Wedbush Securities. Please go ahead.
Thanks, and congrats on another great margin.
In terms of the.
The off premise day up can you just remind us what the breakdown now between third party delivery between the trees app on the website.
Then kind of walk in our format.
Sure.
Let me get that in front of me here Nick.
If you're looking at.
Total, let me make sure I'm looking at the right thing here, if you're looking at total breakdown in the fourth quarter.
You know our online takeout are at.
It was approximately a 12 3% of.
Colin Takeout was about 11 five delivery was about eight five and catering is one one so if you look at at total digital we are total digital of about 20 of that includes basically of our online and our third party delivery partner we.
We are about 27% total digital on in Q3, and we remain there right pretty close to 21% in Q4. So that's been pretty steady as we said earlier too we are at 33% on off premise in Q3 and were at 33% in off price in Q4 as well.
Understood.
Are you able to now gather I mean, the kind of data of where you can actually.
On a mine that data in terms of at a customer database and do things like one on one marketing in a way that you weren't able to do today.
Pre COVID-19.
What have been at sort of customer sign ups.
Turns of the growth rates and where is at now.
What are some of the opportunities because of its higher digital Mexico on forward.
There's a lot of opportunities there Nikki and at what I would tell you is we're still accumulating that data in mind on that or information that we can do that we do have.
Once we get up and dining room, and we're attaching a lot of things to our ceding management tool, which is wisely debt that can mine some of that data and that also has the the one on one marketing associated with it where it was identified lacks users. They will densify specific users of a particular.
Product.
Maybe specific users of our restaurants during lunch not dinner or dinner and not lunch that we can target market. Those individuals' and we currently have that today. We're just trying to tack on more of customer data that we're getting from other different areas that we can put in that day.
Database, so we're still we're.
Still trying to gather that information and use it but we're not right at we're not using that information today, but we're gathering at.
So I think we'll be there we should be able to be there by at the end of the year.
Okay.
That's very helpful and just last question any early any of them.
Early thoughts on G&A for the full year.
You know I'd use of target right now I wouldn't use of target of 2019.
Just as a kind of a precursor.
Okay fair enough. Thanks, so much.
Thanks, Nick.
Our next question will come from Andrew Strauss Heck with BMO capital markets. Please go ahead.
Hey, guys, it's actually Dan on for Andrew at today.
Thanks for taking the questions.
You guys have like others have benefited from some of the higher check average is that we've seen over the past year, which has helped to offset obviously the steeper labor at the core of the steeper traffic declines.
And I guess I'm, just wondering how youre thinking about the evolution of check in traffic have you sort of trend back towards a more normalized operating environment. I mean, obviously I think we all anticipate traffic recovering, but it is there an opportunity to hold on to some of the higher check you've seen or or how do you kind of think about the evolution of of both of those.
Well, yeah, and a part of it is it will have also of the bulk orders and a lot of to go, especially with our although on a lot of prompt them to some were doing some extra selling and there also but we see that because of the mix change and were free. He just has actually moved up a little bit that the higher check average is most of it is the mix.
Because of mix and our kids and they're not going to go away. The evolution of the menu is I'm not making any changes to the menu in the short term as we get back to all of our markets haven't noticed six foot distancing you will see me at a handful of menu items back on.
And that that that won't erode, probably where the mix is currently.
As far as pricing that might go along in that we're gonna have at and we just did about a one in three quarter percent price increase at.
For this year at as we move forward. So that's kind of moving at a little bit, but I don't see anything that's kind of of road on.
Our our check average from a materially from where it's at currently maybe going up a little bit because we just took the price increase you know in a lot of that Nick is of those family kits and if youre looking at the percentage of those family kids they've been very consistent really this period six at about 5% to 6% so end.
Even in period 12 is still 6% so at state even as we've open dining rooms and end was just totally on to go I mean day, they've really stayed consistent.
Got it that's helpful. And then I just had a question on sort of the broader labor environment.
I appreciate the color on some of the labor deflation you guys have been experiencing on what's driving that and I guess I'm just curious how you're thinking about the labor environment more broadly.
I'm wondering theres still higher unemployment, but then we have all of the conversation around the changes in tip wage increasing minimum wage.
What are you seeing from from a labor perspective in the marketplace that youre looking to higher end and kind of what are your expectations for that.
Maybe moving forward.
I've been the key for gross is right now as we've been at of basically 50% of our dining and go dining as far as our capacity, but we are like I said earlier, we're in at 65% range because of our patios.
It's at its top hiring right now that's really tough obviously, when and we can't on when we can move eventually getting rid of at a six foot dining, we're obviously going to be in the market to be on doing a lot of hirings cyclically front of the house on the server side, but it's very difficult out there from the hiring situation currently.
Got it I appreciate the color on.
I'll turn it back over to the queue. Thanks, guys.
Again, if you have a question. Please press Star then one our next question will come from Todd Brooks from C. L. King. Please go ahead.
Hey, guys couple of questions for you one.
This was another quarter of really stellar of restaurant level operating margin.
Performance I know you have some initial thoughts of how much of this improvement.
Are you likely to hold on to on the back side of the pandemic with another strong quarter.
North of 20% any change on what you think youre going to be able to to hold on to John on the backside.
No Todd I think at this point I mean, we still believe that you know our labor is going to go up as Steve said when we when do we start hiring back to full capacity, we're still at similar capacities today that we were in the fourth quarter.
And go on to even in Texas, even though they are opening up we're going to operate in a similar manner that we did in the fourth quarter.
You know an end in the fourth quarter. We did have 11 stores in November December that were closed to only to go only in certain states and so they've opened back up in January to get more consistent with the third quarter, but they've.
<unk> been consistent and we haven't really changed the mix from a from a dining standpoint, and as you can see the online is still consistent at 33% and so until we until we can.
Start staffing the dining rooms at get them up to a 100% capacity, we still anticipate debt that increase in labor and still however, with that increase we still plan to have that 300 350 basis points.
Improvement to maintain.
Prior to prior years.
Okay, great Great. That's helpful. Thanks, and then Steve I know we're on the window that you had initially talked about evaluating the nine stores that had been temporarily closed through the pandemic. What's the what's the status of you and the team gotten out and kind of looked at those markets and made any decisions on those stores.
Yeah.
I'll take that one Todd.
At this point, we've been assessing kind of what their.
You know what we think we can do in those markets, we haven't been able to get out.
But we think at this point is probably more likely than not that those stores are going to.
Maintain closed of.
And.
We are currently looking at a real estate firm to help us get out of some of those leases as well as some of the other closed stores.
And so we're looking to get out of those leases, that's probably going to cost us between.
12, and end of 12 million to Inc to upwards to $20 million on a conservative basis to get out of those leases, but we.
We don't expect like a like I say, there may be one or two but right now we're thinking it's more likely than not they are not going to open.
Okay, Great we can factor that into the model and then.
Additional question gifts gift card business. This year could you talk about how much of the gift card business was down at holiday and then typically what your window of redemption as I know some other peers have talked about 80 or 90% redeemed in the first couple of months after the holiday I'm wondering if that's.
End of music same store sales of the downside of bit to start the year here.
I would tell you at you know Todd I don't have those numbers in front of me, but.
You know they they generally.
On a significant piece and.
They've been pretty actually pretty flat they were down a little bit consistent with kind of what our overall sales at then but.
But they've been pretty flat and it really shouldn't affect you.
Our our sales going forward.
Okay, great. Thanks, I'll jump back in really true.
Our next question will come from Chris <unk> with Stifel. Please go ahead.
Hey, Thanks. Good afternoon, guys. This is actually Alec on for Chris.
Just curious, what's what's kind of driving the change in thinking on those nine locations.
It was at that the markets weren't strong as a whole or was it bad real estate within the market and then can you kind of help sort of frame up the the level of sales on your performance of these stores relative to the rest of your system of your core markets pre COVID-19.
Yeah.
Alex on these.
Stores, we decided when we went into the pandemic debt, we were going to close them they were not.
Top end performance of start with.
And again, it's not in any one market is spread throughout the company.
It could've been a real estate issue of it could've been in parking issue, but its also on one where there's not a lot.
From daytime pop and our ability to really grow our to go areas and that's how we're kind of of evaluating them as we move forward, but they were not big time performance to start with.
Okay, and any sort of level of underperformance relative to the rest of your system, you north of 10% lower at 20% low or anything like that.
You know I would say they were in the high twos to mid threes as far as sales wise.
And so thats definitely one prior to the pandemic. Our overall average was around $4 3 million.
Got it. Thanks, that's helpful and then you know.
Off premise sales remaining in that 30% to 35% range quarter to date seems to indicate.
Continued stickiness, even as dining rooms reopened in January are you surprised at that level of off premise retention do you have any metrics around repeat usage or any change in the mix between delivery and carryout in recent months.
Again, we've really not had any change in dining room metrics as far as how much of a.
We can maximize our data and as I've mentioned to you earlier, we're still like we have been for several months at about a 50% capacity inside of our restaurants because of all of the tables in the six foot distancing and that still remains today at the same level. That's why you've seen a consistent number of about 33%, we do expect as dining rooms.
And as they eliminate and get more comfortable with getting rid of at a six foot distancing, we do anticipate that to go in.
That dining number I mean that number to come down a little bit in the mid 25 range.
As dining room stores of getting a little bit busier.
Okay, great. Thanks, guys.
Thank you.
Again, if you have a question. Please press Star then one our next question will come from Bob Derrington with Telsey. Please go ahead.
Yeah. Thank you Steve.
Just I guess looking into the Crystal ball from two weeks as we look out towards you know.
More of the population of getting vaccinated depend on the coming under better control.
The alcohol sales of your bar sales have historically been very strong and I'm just trying to envision a point in time.
And I'm sure you've given some parts of this when you.
More lively bar scene.
How do you envision the reopening of those end you know certainly I think you know.
Historically, I think margins on alcohol adult beverages.
Historically been pretty good do you have.
Some thoughts around that.
Yeah, I'm pretty pleased to have where we're at.
With alcohol sales without bars EVAR on gathering places, which is at bars are currently.
Very slim.
Slim to none because of the six foot distancing and as that goes away and people get more comfortable about going and I'm not talking three deep at the bar on I'm not talking to deep at the bar I'm, saying, where you'll have all of the chairs at the bar.
So again, when we see that and we will see that when my Crystal ball at is at full foggy.
It's not as clear as I'd like it to be but I don't see a huge mad rush into restaurants. As this thing goes away anytime in the next month of two months or even the next quarter or two.
As Microsoft of ball is corollary. It is I'm looking at probably has some of the distancing will be eliminated hopefully by the fourth quarter of this year on our expectation would be to get the bars opened at a little bit more as far as customers and their window as our waiting area and see us get back to historical you know on that 17% to 18%.
<unk>, then be able to grow from there.
Is it reasonable that we likely will not see the Nacho bar come back end, it'll maybe chips and salsa now.
At a minimum of <unk>.
I think at Yeah, I think it's very reasonable because again at the buffet style and a lot of our health departments arent going to allow that style of any longer.
As we move forward, but you'll see as we get back to normal and getting rid of the six foot distancing youll see us as we do currently now you had a drink specials from 4% to seven Youll see us at something from an appetizer section of some type of specials that will be an added draw off of happy hour in the future.
But probably not the nacho.
Gotcha, Okay. Thanks, Steve I appreciate it. Thank you thanks Bobby.
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 John and I. Appreciate your continued interest in choice and we will always be available to answer any and all questions again. Thank you stay healthy and have a good evening.
Yes.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.