Q1 2024 Chuy's Holdings Inc Earnings Call

Okay.

Operator: Good day everyone, and welcome to the Chuy's Holdings first quarter 2024 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 open for your questions following the preparation time. 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, Inc. At this time, I'll turn the call over to Mr. Howie. Please go ahead, sir.

Good day, everyone and welcome to the Chili's Holdings first quarter 'twenty 'twenty four earnings conference call.

Operator: Today's call is being recorded.

Operator: All participants have been placed on a listen only mode and the lines will be open for your questions. Following the prepared remarks on today's call, we have Steve Hislop, cheap and President and Chief Executive Officer, and Jon Howie, Vice President and Chief Financial Officer of Jewish Holdings incorporated at this time I'll turn the call over to Mr. Howie. Please go ahead.

Operator: Yeah.

Jon W. Howie: Thank you, Operator, and good afternoon. By now, everyone should have access to our first quarter 2024 earnings release. If not, it can be found on our website at www.chuys.com in the Investors section. Before we begin our 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

Jon W. Howie: Thank you operator, and good afternoon by now everyone should have access to our first quarter.

Jon W. Howie: 2024 earnings release, if not it can be found on our website at Ww Dot chewy dot com in the investors section before we begin our 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.

Jon W. Howie: These statements are also subject to numerous risks and uncertainties and 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 condition. Looking ahead, we plan to release our second quarter 2024 earnings on Thursday, August 8. 2024 after the market closed. With that out of the way, I'd like to turn the call over to Chuy's president and CEO, Steve Hislop.

Steven J. Hislop: Undue reliance on them.

Steven J. Hislop: Payments 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 condition. Looking ahead, we plan to release, our second quarter 2020.

Steven J. Hislop: For earnings on Thursday August eight.

Jon W. Howie: 2024, after the market close with that out of the way I'd like to turn the call over to <unk>, President and CEO, Steve Hislop.

Steven J. Hislop: Thank you, Jon. Good afternoon, everyone, and thank you for joining us on today's call. In the first quarter, we experienced the same weather and macro challenges facing the broader restaurant industry, leading to top-line growth that was below our expectations. That said, we were encouraged to see our top-line trends improve as we move through the quarter when adjusting March for the Easter calendar shift. In addition, our off-premise business continued to see growth as consumers embraced the opportunity to enjoy Chuy's high-quality, made-from-scratch food from the comfort of their own home.

Steven J. Hislop: He John Good afternoon, everyone and thank you for joining us on today's call in the first quarter, we experienced the same weather and macro challenges facing the broader restaurant industry, leading to a topline growth that was below our expectations that said, we were encouraged to see our top line trends improve as we move through the quarter when adjusting March for the Easter calendar shift.

Steven J. Hislop: In addition, our off premise business continued to see growth as consumers embraced the opportunity enjoy choose high quality made from scratch food from the comfort of their own home ultimately despite top line headwinds. Our teams continued focus on four wall operational excellence allowed us to deliver an 18.8 restaurant.

Steven J. Hislop: Ultimately, despite top-line headwinds, our team's continued focus on four-wall operational excellence allowed us to deliver an 18.8 restaurant-level operating margin, which remains among the best in our industry. Before I jump into our growth drivers, I want to acknowledge the hard work and dedication of our team members who make Chuy truly special. In times of macro uncertainty, our ability to refocus on the fundamentals of driving great guest experiences is what will allow us to be successful in the long term despite the short-term pressures.

Steven J. Hislop: Operating margin, which remains among the best in our industry before I jump into our growth drivers I want to acknowledge the hard work and dedication of our team members, who make truly truly specials in times of macro uncertainty our ability to refocus on the fundamentals that are driving great guest experiences is what we allow us well.

Steven J. Hislop: Shifting to our growth drivers, menu innovation remains to be the backbone of our growth as we continuously introduce fresh and flavorful options for our guests. In January, we were thrilled to introduce a new CKO iteration that includes shrimp and crab enchiladas with our delicious lobster bisque sauce, machos nachos, and lastly, our cheesy pig burrito. We continue to be encouraged by our guest feedback on the platform, which is responding well with our guests. To build upon our momentum, we were thrilled to introduce our next CKO at the end of April that includes green chili BBQ ribs. Pablo Anchiladas and our fat daddy Flautas.

Steven J. Hislop: Allow us to be successful in the long term despite the short term pressures.

Steven J. Hislop: Shifting to our growth drivers menu innovation remains to be the backbone of our growth as we continuously introduce fresh and flavorful options for our guests in January we were thrilled to introduce a new C. K O iteration that includes shrimp and crab enchiladas without delicious lobster best sauce, Macho has nachos and last.

Steven J. Hislop: They are cheesy peg burrito, we continue to be encouraged by our guest feedback on the platform, which is resonating well with our guests to build to build upon our momentum we were thrilled to introduce our next seek out at the end of April that included that includes green Chili barbecue ribs.

Steven J. Hislop: Pablo Antral artists and our fact Daddy flattish so far our guests are very receptive, but the new options and we look forward to to launch successfully truly knockout campaigns in the future.

Steven J. Hislop: So far, our guests are very receptive to the new options, and we look forward to successfully running Chuy's knockout campaigns in the future. In conjunction with our CKO offerings, as we mentioned in our last call, we're also optimizing our menu by adding some of our guest favorite CKOs to our regular menu to further drive traffic growth in our restaurants. As part of this initiative, we were encouraged by the performance of our burrito bowls, so we added them to the menu as a permanent item.

Steven J. Hislop: Injunction the taxi cab offerings as we mentioned on our last call. We're also optimizing our menu by by adding some of our guests' favorite CK owes to our regular menu to further drive traffic in our restaurants as part of this initiative. We are we're encouraged by the performance of a burrito balls as we added them to the menu as a permanent item.

Steven J. Hislop: We expect to see chaos and will continue to be a culinary testing ground for us but remain committed to the streamlined menu we achieved during the pandemic.

Steven J. Hislop: We expect the CKOs will continue to be a culinary testing ground for us but remain committed to the streamlined menu we achieved during the pandemic. Moving on to off-premise, we are pleased to have delivered another strong quarter of off-premise performance, mixing at approximately 29%. Our delivery channel continued to perform well with 130 basis points of improvement year-over-year and mixing at approximately 12% during the first quarter. In terms of our catering channel, we remain focused on building awareness around our capabilities and working on completing the rollout of our Easy Cater platform to all of our restaurants. For the first quarter, catering is mixing at around 3.5%.

Steven J. Hislop: Moving on to off premise. We are pleased to have delivered another strong quarter of off premise performance mixing at approximately 29% our delivery channel continue to perform well with 130 basis point improvement year over year and mixing at approximately 12% during the first quarter in terms of our catering channel we remain.

Steven J. Hislop: Focus on building awareness around our capabilities and working on and completed completing the rollout of our easy care platform to all of our restaurants for the first quarter catering is mixing at around three 5% as we look ahead. We continue to believe our off premise channel will remain at least 25% of our sales with catering contributor.

Steven J. Hislop: As we look ahead, we continue to believe our off-premise channel will remain at least 25% of our sales, with catering contributing approximately 4 to 6 of total sales long term. Turning to our marketing initiatives, our marketing approaches continue to be favorable in communicating our strong brand value and sharing our unique Chuy's experience with guests near and far. To that end, we will remain focused on utilizing digital media platforms such as Meta, Google, TikTok, YouTube video advertising, and organic influencer programs to share our defining differences in our incredible value through our made-from-scratch food and drink.

Steven J. Hislop: Approximately four to six of total sales long time.

Steven J. Hislop: Turning to our marketing initiatives, our marketing approach has continued to be favorable and communicating a strong brand value and sharing our unique chili's experience for the guests near and far to that end, we will remain focused on utilizing digital media platforms, such as meta Google tick Tock Youtube video advertising and organic.

Steven J. Hislop: Except programs to share our defining differences that being our incredible value to our made from scratch food and drink.

Steven J. Hislop: And finally, let's turn to our development plans unit growth remains to be a core piece of our long term growth and growth plan with a strong focus in markets that have a proven track record of brand awareness and high average unit volumes. During the first quarter. We successfully opened one restaurant in New Brunswick, Texas, followed by another new restaurant opening in <unk>.

Steven J. Hislop: And finally, let's turn to our development plans. Unit growth remains a core piece of our long-term growth plan, with a strong focus on markets that have a proven track record of brand awareness and high average unit volumes. During the first quarter, we successfully opened one restaurant in New Bronzeville, Texas, followed by another new restaurant opening in Austin, Texas, subsequent to the end of the first quarter. This is aligned with our plans to open two new restaurants in the first half of 2024, and we are pleased with the performance of these restaurants thus far.

Steven J. Hislop: Austin, Texas subsequent to the end of the first quarter. This is in line with our plans to open two new restaurants in the first half of 2024, and we were pleased with the performance of these restaurants, thus far as we look ahead to the remainder of 2024, our pipeline remains robust and we plan on opening between six to eight new restaurants in our core markets for the year.

Steven J. Hislop: As we look ahead to the remainder of 2024, our pipeline remains robust, and we plan on opening between six to eight new restaurants in our core markets for the year. With that, I'll now turn the call over to our CFO, Jon Howie, to discuss our first quarter results in greater detail.

Jon W. Howie: As a reminder, there was a one-week calendar shift in comparison to the fiscal first quarter of 2024 and the fiscal first quarter of 2023 due to the 53rd week in fiscal 2023. This resulted in reduced revenue in the first quarter of 2024 as the shift caused the week between Christmas and New Year's, traditionally a high-volume week for our brand's units, to be included in the first quarter of 2023 but was replaced by an average volume week in the first quarter of 2024.

Steven J. Hislop: With that I'll now turn the call over to our CFO, Jon Howie to discuss our first quarter results in greater detail. Thank you Steve revenues for the fourth quarter was $110 5 million compared to $112 5 million in the same quarter last year. As a reminder, there was a one week calendar shift in comparison to the fiscal first quarter of 2024 to the <unk>.

Jon W. Howie: Overall, we estimate that the 53rd week shift negatively impacted sales by $1.8 million, EBITDA by approximately $900,000, and EPS by approximately $0.04 to $0.05 per share. Comparable restaurant sales on a calendar basis in the first quarter adjusted for the shift decreased 4.3% versus last year, driven by a 6.9% decrease in average weekly customers and partially offset by a 2.6% increase in average check. Effective pricing during the quarter was approximately 2.9%, and off-premise sales were approximately 29% of total revenue as compared to 27% of total revenue a year ago.

Jon W. Howie: Fiscal first quarter of 2023 due to a 50 <unk> week in fiscal 2023. This resulted in reduced revenue in the first quarter of 2024 as the shift caused the week between Christmas and new year's traditionally a high volume week for our brands units to be included in the first quarter of 2023.

Jon W. Howie: We replaced by an average volume week in the first quarter of 2024 overall, we estimate that the 50 <unk> week shift negatively impacted sales by one 8 million EBITDA by approximately 900000 and EPS by approximately four to five cents per share comparable restaurant sales on a calendar basis in the first.

Jon W. Howie: Quarter adjusted for the shift decreased four 3% versus last year, driven by six 9% decrease in average weekly customers and partially offset by a two 6% increase in average check effective pricing during the quarter was approximately two 9% in off premise sales were approximately 20.

Jon W. Howie: 9% of total revenue as compared to 27% of total revenue a year ago, turning to expenses cost of sales as a percentage of revenue decreased 30 basis points to 25, 2% driven overall by overall commodity deflation of one 3% as compared to last year looking.

Jon W. Howie: Turning to expenses, cost of sales as a percentage of revenue decreased 30 basis points to 25.2%, driven overall by overall commodity deflation of 1.3% as compared to last year. Looking to 2024, we currently expect commodity inflation in the low single digits for the year. Labor cost as a percentage of revenue increased 110 basis points to 31.4%, primarily due to hourly labor inflation of approximately 3.6% at comparable restaurants, as well as meaningful improvement in hourly labor staffing levels compared to last year. We are currently expecting labor inflation of mid-single digits for fiscal 2024.

Jon W. Howie: Into 2024, we currently expect commodity inflation in the low single digits for the year labor cost as a percentage of revenue increased 110 basis points to 31, 4%, primarily due to hourly labor inflation that proportionately three 6% at comparable restaurants as well.

Jon W. Howie: Meaningful improvement in hourly labor staffing levels compared to last year.

Jon W. Howie: We are currently expecting labor inflation of mid single digits for fiscal 2024 operating cost as a percentage of revenue increased 30 basis points to 16, 4% driven by higher delivery service fees from an increase in off premise sales and increase in restaurant repair and maintenance costs.

Jon W. Howie: Operating costs as a percentage of revenue increased 30 basis points to 16.4 percent, driven by higher delivery service fees from an increase in off-premise sales. An increase in restaurant repair and maintenance costs was partially offset by a decrease in utility costs and to-go supplies as compared to last year. General administrative expenses decreased to $7.1 million in the first quarter from $7.8 million in the same period last year, driven mainly by lower-performance-based bonuses.

Jon W. Howie: Partially offset by a decrease in utility costs and to go supplies as compared to last year.

Jon W. Howie: General and administration administrative expenses decreased to $7 1 million in the first quarter from $7 8 million in the same period last year, driven mainly by lower performance based bonuses as a percentage of revenue.

Jon W. Howie: As a percentage of revenue, G&A decreased to 6.5 percent from 6.9 percent during the same period last year. In summary, net income for the first quarter of 2024 was $6.9 million, or $0.40 per diluted share, compared to $8.2 million, or $0.45 per diluted share, during the same period last year. During the first quarter of 2024 and 2023, we incurred $0.4 million, or $0.02 per diluted share, in impairment, closed, restaurant, and other costs.

Jon W. Howie: <unk> increased to six 5% from six 9% during the same period last year.

Jon W. Howie: In summary, net income for the first quarter of 2024 was $6 9 million or <unk> 40 per diluted share compared to $8 2 million or <unk> 45 per diluted share in the same period last year. During the first quarter of 2024, and 2023, we incurred a $4 million or <unk> <unk> per share diluted share.

Jon W. Howie: <unk> and impairment closed restaurant and other cost taking that into account adjusted net income for the quarter first quarter of 2024 was $7 3 million or 42 cents per diluted share compared to $8 5 million or 47 per diluted share in the same period last year moving to our liquid.

Jon W. Howie: Taking that into account, adjusted net income for the first quarter of 2024 was $7.3 million or $0.42 per diluted share compared to $8.5 million or $0.47 per diluted share in the same period last year. Moving to our liquidity and balance sheet, as of the end of the quarter, we had $56.4 million in cash and cash equivalents, no debt outstanding, and $25 million available under our revolving credit facility. We also purchased 214,659 shares of our common stock during the quarter for a total of approximately 7.3 million.

Jon W. Howie: And balance sheet as at the end of the quarter, we had $56 4 million in cash and cash equivalents, no debt outstanding and $25 million available under our revolving credit facility.

Jon W. Howie: We also purchased 214659 shares of our common stock during the quarter for a total of approximately $7 3 million I'm proud to say following these purchases we have repurchased over three 1 million shares since 2020 and F. Reacquired the shares we issued in our ATM offering.

Jon W. Howie: I'm proud to say following these purchases, we have repurchased over 3.1 million shares since 2020 and have reacquired the shares we issued in our ATM offering in 2020 at the height of the pandemic. As of March 31st, 2024, we had $13.8 million remaining under our $50 million dollar repurchase program, which will expire on December 31st, 2024. With that in mind, we'll now provide you with the following outlook for 2024. We are reaffirming our expectations of adjusted EPS of $1.82 to $1.87 for 2024 as compared to the adjusted EPS of $1.87 after adjusting for the extra week in 2023. This is based in part on the following annual assumptions.

Jon W. Howie: In 2020 at the height of the pandemic.

Jon W. Howie: As of March 31, 2024, we had $13 $8 million remaining under our $50 million repurchase program, which will expire on December 31 2024.

Steven J. Hislop: G&A expense of $29 to $30 million. 6 to 8 new restaurants. Net Cap-X expenditures of approximately $41 to $46 million, restaurant pre-opening expenses of approximately $2.7 to $3.2 million, effective annual tax rate of approximately 13 to 14 percent, and annual weighted diluted shares outstanding of $17.4 million. With that, I'll turn the call back over to Steve. Thanks, Jon.

Jon W. Howie: With that I will now provide you with the following outlook for 2024, we are reaffirming our expectations adjusted EPS of $1 82 to $1 87 for 2024 as compared to the adjusted EPS of $1 87 after adjusting for the extra week in 2023. This is <unk>.

Steve: In part on the following annual assumptions G&A expense of 29% to $30 million.

Steven J. Hislop: Six to eight new restaurants, net capex expenditures of approximately $41 million to $46 million restaurant Preopening expenses of approximately two 7% to $3 2 million.

Steve: <unk> annual tax rate of approximately 13% to 14% and annual weighted diluted shares outstanding of $17 4 million.

Steven J. Hislop: That I will turn the call back over to Steve. Thanks, John overall, we remain optimistic about our ability to capitalize on the long term growth opportunities ahead for choice through the initiatives. We put in place. We will continue to focus on our four wall operational excellence and provide our guests with a unique to his experience at all no one month combined with a strong balance sheet.

Steven J. Hislop: Overall, we remain optimistic about our ability to capitalize on the long-term growth opportunities ahead for Chuy's. Through the initiatives we've put in place, we will continue to focus on our four-wall operational excellence and provide our guests with a unique Chuy's experience they all know and love. Combined with a strong balance sheet, disciplined capital allocation, and a robust development pipeline, we are in a position to maximize long-term shareholder value in 2024 and beyond. With that said, we're happy to answer any questions. Operator, please open the lines for questions.

Steven J. Hislop: Disciplined capital allocation and a robust development pipeline, where we are in a position to maximize long term shareholder value in 2024 and beyond with that we're happy to answer any questions. Operator, Please open the lines for questions.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Thank you well now be conducting a question and answer session.

Operator: If you'd like to ask a question. Please press star one on your telephone keypad.

Operator: Information Tom on the <unk>. Your line is in the question queue.

Operator: Press Star two if you'd like to remove your question from Mikael.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset with what that's when they start Q.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Chris O'Connell with CFO. Please proceed with your question.

Operator: One moment, please while we poll for questions.

Operator: Yeah.

Chris O'connell: Thank you.

Operator: Question is from Christopher Cole with Stifel. Please proceed with your question.

Chris O'connell: Thanks, and good afternoon, guys. Hey guys, Steve, I know you said comps improved during the quarter, but can you help us understand the rate of change and maybe where comps are quarter to date?

Chris O'connell: Thanks, and good afternoon guys.

Chris O'connell: Hey, guys, Steve I know you said comps improved during the quarter can you help us understand the rate of change and maybe where comps are quarter to date.

Steven J. Hislop: You have that, Johnny, in front of you.

Chris O'connell: You have that Johnny.

Jon W. Howie: As far as the quarter to date, we were down about 2.2%.

Steven J. Hislop: As far as quarter to date.

Jon W. Howie: See we were after period for so called quarter Im sorry quarter to date, we're down about two 2%.

Jon W. Howie: Does that include the Easter benefit, Jon?

Jon W. Howie: Does that include the Easter benefit John.

Jon W. Howie: It does, Chris, but it was kind of offset by Cinco, so that's flat. You've got Cinco, that was a Friday last year, and then... It was a Sunday this year. Okay, that's helpful.

Jon: It does Chris.

Jon: But it was kind of offset by Cinco. So thats flat, you've got Cinco that was a Friday last year.

Jon W. Howie: And then it was in <unk>.

Jon W. Howie: Sunday This year Sunday this year.

Jon W. Howie: Okay, that's helpful. And then, Jon, what comp sales assumption are you using for the earnings range that the company's guiding?

Jon W. Howie: That's helpful and then John what comp sales assumption are you using for the earnings range.

Jon W. Howie: These guiding.

Jon W. Howie: Okay.

Jon W. Howie: So.

Jon W. Howie: Yes.

Jon W. Howie: For the year, we're going to be right around flat to slightly positive, Chris.

Jon W. Howie: For the year.

Jon W. Howie: We're going to be.

Jon W. Howie: A little right around flat to slightly positive Chris.

Jon W. Howie: Okay.

Chris O'connell: Okay, that's helpful. And then Steve, I know in the past the company has slowed its unit growth plans when comp sales have been challenged. You know, a lot of restaurants have talked about the environment being more challenging here recently, and I'm just wondering if comps do continue to be challenged for the balance of the year, will that affect development plans for 2025?

Jon W. Howie: Okay. That's helpful and then Steve I know in the past the company has slowed its unit growth plans when comp sales have been challenged in.

Chris O'connell: A lot of the restaurants have talked about the environment being more challenging here recently and I'm just wondering if comps to continue to be challenged for the balance of the year do you think it will affect development plans for 25.

Steven J. Hislop: As I sit here now, Chris, I'd say no. Again, if you look at what we're rolling over in the first quarter, last year for the first quarter, along with what Jon already mentioned about the $1.8 million shift in the 53rd week, we're rolling over an 8% increase in the whole first quarter. So if you look at our two-year stack, we're still up 3.7 on the whole first quarter. So again, I think it'd be a little premature, but you are right. If it goes that way, I'll always consider that because sales and, obviously, guest counts are the lifeblood of any concept.

Steve: As I sit here now Chris I'd say no again, if you look at what we're rolling over in the first quarter of last year for the first quarter.

Steven J. Hislop: Along with John already mentioned about the $1 million shift and the 50 <unk> week, we're rolling over our first quarter of 8% increase in the whole first quarter.

Steven J. Hislop: If you look at our two year stack was still up $3 seven on the on the whole first quarter. So again I think it would be a little premature but you are right.

Steven J. Hislop: If it goes that way I'll always consider that because.

Steven J. Hislop: The sales and obviously guest counts are our lifeblood of any concept.

Chris O'connell: Okay, that's helpful. Thanks guys, I'll pass it on.

Speaker Change: Okay. That's helpful. Thanks, guys I'll pass it on thank.

Speaker Change: Thank you Sir.

Operator: Thank you. Our next question is from Jim Salera with Steven. Please proceed with your question.

Chris O'connell: Thank you. Our next question is from Jim Suva with Stephens. Please proceed with your question.

Jim Salera: Hi guys, good afternoon. Thanks for taking our questions.

Jim Salera: Hi, guys. Good afternoon, thanks for taking our questions.

Jim Salera: Appreciate the color around the 53rd week and the impact from that. We've heard a lot of people in the industry talk about impacts from weather in January. Do you have any sense for what that impact was in the first quarter? And maybe how confident you would be if you were to strip that out?

Jim Salera: I appreciate the color around the 50 <unk> week and the.

Jim Salera: Impact from that.

Jim Salera: We've heard a lot of people in the industry talk about impact from.

Jim Salera: Whether in January.

Jim Salera: Do you have any sense for that impact was.

Jim Salera: In the first quarter and maybe what comps would have been if you were to strip that out.

Steven J. Hislop: Basically, with the weather and the shift in Easter, it's about 1.2 percent on our

Speaker Change: Sure basically with the weather and the shift in the Easter is about one 2% on our comp sales.

Jim Salera: Okay, great. That's super helpful.

Speaker Change: Okay, Great that's super helpful.

Jim Salera: And then I.

Jim Salera: If I look at restaurant level margin growth you guys are are up significantly since pre COVID-19.

Steven J. Hislop: And then if I look at restaurant level margin growth, you guys are up significantly since pre-COVID. Is there any opportunity to maybe reinvent some of that back into value offerings for the consumer, maybe more into the marketing line? Just any thoughts on that as you guys progress through the year? Yeah, one thing that we've always prided ourselves on is our value within our whole menu as it currently stands. You know, we're not the discount people like you've seen a lot of other companies out there because our whole menu, you know, they're out there doing a lot of 2 for 20, 2 for 25. You can do that all day with our existing menu. We're always constantly looking at our marketing spend as we move forward, but we're pretty comfortable. One thing about digital, it's easy to spin on a dime.

Steven J. Hislop: Is there any opportunity to maybe reinvest some of that back into.

Steven J. Hislop: Value offerings for the consumer may be more into the marketing line just any thoughts on that as you guys progressed through the year.

Steven J. Hislop: Yeah, one thing that we've always prided ourselves in as a value within our whole menu as it currently stands you know we're not a discount people like you've seen a lot of other companies out there because our whole menu.

Steven J. Hislop: They're doing a lot of two for 22 for $25 you can do that all day and our existing menu.

Steven J. Hislop: We are always constantly looking at our marketing spend as we move forward.

Steven J. Hislop: So we feel pretty comfortable one thing about digital it's easy to spend on a dime. So no doubt we've definitely looked at really talking more about value.

Jim Salera: So no doubt, we've definitely looked at talking more about value and even more so than our defining differences. Although the freshness of our product, making everything from scratch, we think is still a unique message. So we'll continue that, but right now, we're pretty happy with the way our model is situated. Okay, great. Appreciate it, Tyler. I'll hop back into the queue. Thank you.

Jim Salera: Even more so than our defining differences, although the freshness of our product, making everything from scratch. We think is stellar unique message. So we'll continue that but right now we're pretty happy with the way our model is situated.

Speaker Change: Okay great.

Speaker Change: I appreciate the color I'll hop back in the queue. Thank you. Thank you.

Operator: Our next question is from David Tarantino with Baird. Please proceed with your question.

Jim Salera: Our next question is from David Tarantino with Baird. Please proceed with your question.

David E. Tarantino: Hi Jon, my question is on the outlook for the year, Jon, that you mentioned for comps, kind of flattish to slightly positive comps. I guess that would require a pretty big improvement from what you're seeing currently. So I was just wondering if you could share your thoughts on why you expect comps to get better as the year goes on, and I guess what the key drivers of that improvement are.

David E. Tarantino: Hi, Good afternoon my questions on the outlook for the year, John that you mentioned for.

David E. Tarantino: For comps kind of flattish to slightly positive comps I guess that would require a pretty big improvement from what you're seeing currently.

David E. Tarantino: So I was just wondering if you could.

David E. Tarantino: Share your thoughts on on why you expect comps to get better as the year goes on and I guess, what are the key drivers of that improvement.

Jon W. Howie: Great question, David. One is, by the end of this month, we should be fully on EasyCater and have approximately 27 more stores on EasyCater, which will help. Two, as we get further, right now in Q2 and in Q3, we're going to start to roll over Uber Eats. Right now, we're basically challenged with rolling over those comps from last year. As we get into Q4, you know, we fully kind of rolled over that. And so that will be helpful with that. So we think that's going to be beneficial. And those are the big things.

Jon: Great question, David one is by the end of this month, we should be on fully on easy cater.

Jon W. Howie: Approximately 27 more stores on easy cater which will help.

Jon W. Howie: Two as we get further right now in Q2 and Q3.

Jon W. Howie: We're going to start to rollover Uber eats right now.

Jon W. Howie: <unk> challenged with rolling over those comps from last year as we get into Q4.

Jon W. Howie: The fully kind of rolled over that and so that will be helpful.

Jon W. Howie: With that so we think thats going to be beneficial.

Jon W. Howie: And those are the big things.

Speaker Change: Can you think of.

Steven J. Hislop: Can you think of... Yeah, and sequentially, if you look at it, as I mentioned as we started, you know, when you're looking at the first quarter, it was an anomaly a little bit, where we were up last year by 8%. It goes progressively down to normal numbers in the second and the third quarter, and actually, we roll over a little bit easier numbers in the fourth quarter, so sequentially, it just moves throughout the whole year like that.

Jon W. Howie: Sequentially. If you look at it as I mentioned as we started when you're looking at the first quarter. It was an anomaly a little bit we were up last year, 8%. It goes aggressively down to normal numbers in the second and the third and actually we ran a rollover a little bit easier numbers in the fourth quarter. So sequentially. It just moves throughout.

Steven J. Hislop: The whole year like that and David If you look at a two year stack I mean, even for the quarter. We were up about three 7% on a two year stack. So if you keep rolling and we've been pretty consistent with that you keep rolling that forward that would suggest higher comps going forward.

Jon W. Howie: And David, if you look at a two-year stack, I mean, even for the quarter, we were up about 3.7% on the two-year stack. So if you keep rolling, and we've been pretty consistent with that, if you keep rolling that forward, that would suggest higher comps going forward.

Jon W. Howie: And David, if you...

David E. Tarantino: Specifically, the second half of the year and, definitely, the fourth quarter.

Jon W. Howie: Specifically, the second half of the year and definitely in the fourth quarter.

Jon W. Howie: Got it. And then?

Speaker Change: Got it and then.

David E. Tarantino: Thank you, Jon, on the cost outlook. Also, looks like you're assuming that inflation might get a little higher this year. The year is getting stronger as the year goes on. I think you mentioned, you know, in both cases, commodities and labor being a little bit higher for the year than what you saw in Q1. So I guess what's driving that assumption for each of those buckets?

Jon W. Howie: John on the on the cost outlook. It also looks like you're assuming that that inflation might get a little <unk>.

David E. Tarantino: Stronger as the year goes on I think you mentioned in.

David E. Tarantino: In both cases commodities and labor being a little bit higher for the year than what you saw in Q1, So I guess what.

David E. Tarantino: Whats driving that assumption for each of those buckets.

Jon W. Howie: Well, the big thing is we think labor is going to be in the mid-single digits, probably a little lighter than that at this point, probably in that 4% to 5%, or maybe a little shy of 4% at the present time. On the cost side, though, the biggest thing is we have beef locked in through the second quarter with ground beef and locked in through the third quarter with frozen beef. Right now, if we were to lock that in, it's significantly higher than what we have it locked in at.

David E. Tarantino: But the Big thing is we think labor is going to be in that mid single digit is probably a little lighter than that at this point, probably in that 4% to 5% or maybe a little shy of four.

Jon W. Howie: At the present time on the cost side, though the biggest thing is we have beef locked in through the second quarter with ground beef and locked into the third quarter. The heated right now if we were to lock that in.

Jon W. Howie: Higher than what we have locked in at now with that being said the slaughter rates are starting to increase above 600000. So hopefully by the time, we have to lock that in or buy on the market those will come down but right. Now we are projecting some inflation related to our cuts, which as you know are the <unk>.

Jon W. Howie: Now, with that being said, the slaughter rates are starting to increase above 600,000, and so hopefully, by the time we have to lock that in or buy on the market, those will come down. But right now, we are projecting some inflation related to our cuts, which, as you know, are the thin meats, and right now, they are running a little higher than your center cuts today.

Jon W. Howie: Meats and right now they are running a little higher than your center cuts today.

David E. Tarantino: Got it. So just in terms of sequencing, would you expect... Would you expect Q2 to be similar to Q1 in terms of maybe flat to slightly down, and then you get some step-ups in the second half based on what you just said?

Speaker Change: Got it so just in terms of sequencing you would expect.

David E. Tarantino: Or would you expect Q2 to be similar to Q1 in terms of maybe flat to slightly down and then you've got some step ups in the second half based on what you just said.

Jon W. Howie: Now in Q2, we're expecting because we actually have stepped up with the Q2 because we have a different purchase for the ground beef in Q2, so that's stepped it up a little bit. So we're expecting inflation over the prior year in that two to three percent in Q2, and it's kind of staying at that rate a little higher than that, probably another hundred basis points in Q3 and then another 200 basis points in Q4.

David E. Tarantino: Now on to Q2, we were expecting.

Jon W. Howie: Because we actually have stepped up with the Q2, because we have a different purchase for the ground beef in Q2, So thats stepped it up a little bit. So we're we're expecting inflation over the prior year and that 2% to 3% in Q2, and it's kind of staying at that rate a little higher than that probably another 100 basis points in Q3.

Jon W. Howie: And then another 200 basis points in Q4.

David E. Tarantino: Got it. Okay. Great. Thanks for all that color. Thank you. Thanks, David.

Speaker Change: Got it okay, great. Thanks for all that color.

Speaker Change: Thanks, David Thanks.

Operator: Our next question is from Andy Barish with Jefferies. Please proceed with your question.

David E. Tarantino: Our next question is from Andy Barish with Jefferies. Please proceed with your question.

Andrew Marc Barish: Hey guys, are the 2Q CKOs, are those kind of barbecued as well? Do you have, are the flautas kind of a lower price point in there with ribs being premium, I would imagine?

Andrew Marc Barish: Hey, guys.

Andrew Marc Barish: Yes, I was just checking on are that the <unk> those are those.

Andrew Marc Barish: Kind of bar Belled as well do you have.

Andrew Marc Barish: Florida is kind of a lower lower price point in there with with Red being premium I would imagine.

Steven J. Hislop: Yes, exactly. Exactly. And we're just starting our second week of it this year. We're also having the barbecue as an add-on three bone add-on, which is the first time we've done anything like that that should help us with some incremental sales.

Andrew Marc Barish: Yes exactly.

Andrew Marc Barish: <unk> and we're just starting our second week of it. This year. We're also have the barbecue as an add on three bone add on which is the first time, we've done anything like that that should help us in some incremental sales.

Steven J. Hislop: And that has definitely been a crowd favorite, the add-on.

Steven J. Hislop: That has definitely been a crowd favorite the add on.

Andrew Marc Barish: And then, um... Just wondering, I know Austin's a big market, but they're, you know, they're also high-volume restaurants. I mean, you've opened two here recently. Is that a headwind in any way to same store sales this year? How do you think you kind of think about that?

Steven J. Hislop: Alright.

Steven J. Hislop: And then.

Andrew Marc Barish: Yes.

Andrew Marc Barish: I'm wondering I know Austin is a big market, but they are also high volume restaurants, I mean, you've been too here recently.

Speaker Change: Is that okay.

Andrew Marc Barish: And any way to same store sales this year or what how do you how do you kind of think about that.

Steven J. Hislop: You know, as we open these, you know, we're opening them in basically five states for the next three to five years, as we mentioned before, Andy, and as we modeled all these, we made sure they had no cannibalization above 5%. Having said that, on the two that we've opened right now, one's down in New Bronzeville, as I've mentioned to you earlier, there's really been no cannibalization in either any of our stores for that one so far.

Andrew Marc Barish: As we open these.

Steven J. Hislop: We are opening.

Steven J. Hislop: Basically five states for the next three to five years as we've mentioned before Andy and as we modeled all these.

Steven J. Hislop: We made sure they had no.

Steven J. Hislop: Cannibalization above 5%, having said that on the two that we've opened right now one's down and no bronxville as I've mentioned to you earlier.

Steven J. Hislop: It's been really no cannibalization on either or any of our stores for that one so far and again, we've only in third week at Mueller, which is Austin store, but again, we've been pretty comfortable on all stores that theres really not much effect of a cannibalization in any of them so far.

Steven J. Hislop: And again, we're only in our third week at Mueller, which is an Austin store, but again, we've been pretty comfortable at all stores that there's really not been much of a cannibalization effect on any of them so far. Got it. Thank you very much.

Steven J. Hislop: Got it thank you very much.

Speaker Change: Thanks, Andy.

Operator: Thank you. Our next question is from Nick Sutkin with Webfoot Securities. Please proceed with your question.

Steven J. Hislop: Thank you. Our next question is from Nick.

Nick Sutkin: With Wedbush Securities. Please proceed with your question.

Nick Sutkin: Thanks, gentlemen. Just a question, you know, around the geographic sort of what you're seeing in terms of the different geographies for the comp. And also, you know, are you seeing a better comp in your higher volume stores on your lower volume stores because of, let's say, excess demand?

Nick Sutkin: Thanks, gentlemen.

Nick Sutkin: Just a question around the geographic.

Nick Sutkin: Sort of what you're seeing in terms of the different geographies for the comp.

Nick Sutkin: And also.

Nick Sutkin: Are you seeing like a better comp and your higher volume.

Nick Sutkin: So when you have lower volume doors.

Nick Sutkin: Or because of let's say excess demand.

Steven J. Hislop: No, I mean, from a prorational standpoint, it's been pretty consistent throughout the population of stores next.

Nick Sutkin: No I mean, it's been from a proration all standpoint, it's been pretty consistent throughout the population of stores Nick.

Nick Sutkin: Got it, okay. And on the labor piece, you know, the deleverage is what it was in Q1. Can we see sort of that 100-210 base point type of deleverage as the year progresses or as the comp improves? Hopefully, we'll see less leverage, or less deleverage.

Steven J. Hislop: Got it okay and on the labor.

Nick Sutkin: Piece.

Nick Sutkin: The deleverage is what it is in Q1 can we see sort of that 100 210 basis points of deleverage as the year progresses or out of the comp improves.

Nick Sutkin: Hopefully, we see less leverage.

Nick Sutkin: Deleverage.

Jon W. Howie: Well, I mean, you're always going to see leverage in the second quarter. Nick, as you know, that's our strongest quarter. So you could see 100 basis points of leverage in that second quarter. And the third quarter is our second best quarter. So, again, you'll see a little bit more leverage there than you did in the first quarter as well. But in the fourth quarter, probably not.

Nick Sutkin: Well I mean, you're always going to see <unk>.

Jon W. Howie: Leverage in the second quarter.

Jon W. Howie: Nick as you know that's our strongest quarter. So you could see 100 basis points of leverage in the second quarter.

Jon W. Howie: Third quarter is our second best quarter, So again, youll see a little bit more leverage there than you did in the first quarter as well.

Jon W. Howie: So in.

Jon W. Howie: In the fourth quarter, probably none.

Jon W. Howie: By 100 base of leverage in Q2, you mean sequentially versus Q1, right? Not year-over-year.

Jon W. Howie: Goodbye.

Jon W. Howie: Leverage in Q2 units sequentially versus Q1 year over year sequentially, yes.

Nick Sutkin: Yes, sequentially, yes. Got it. Okay, thank you very much. Thanks, guys.

Nick Sutkin: Got it okay. Thank you very much thanks.

Speaker Change: Thanks, Nick.

Operator: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question is from Todd Brooks with The Benchmark Company. Please proceed with your question. Hey, thanks for taking my questions. Just two quick ones. Jon, you gave us what the pricing was in the quarter. Could you let us know what the average check was for Q1?

Nick Sutkin: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Jon W. Howie: Yeah, the average check was actually down 2.6% or up 2.6%, and that price was, give me a second.

Operator: Our next question is from Todd Brooks with the Benchmark Company. Please proceed with your question.

Jon W. Howie: [inaudible]

Todd Morrison Brooks: Hey, Thanks for taking my questions. Just two quick ones. John you gave us what the pricing was in the quarter could you, let us know what average check brands for Q1.

Jon W. Howie: Hum.

Todd Morrison Brooks: The average check was actually down.

Jon W. Howie: 226 are up two 6% and that price was just give me a second.

Jon W. Howie: Yes.

Jon W. Howie: 1941.

Jon: $19 41 to $19 41.

Jon W. Howie: Okay, thanks. So you said up 2.6%. Jon, it's only like a 30 basis point drag from mix and Correct, yes.

Jon W. Howie: Okay. Thanks, So you said up two 6% Johnson only like a three three a 30 basis point drag from mix in the quarter correct, yes.

Todd Morrison Brooks: Okay, perfect. And then my second question, in thinking about it... PKO is a proving ground for items coming back from the menu. Steve.

Speaker Change: Okay perfect.

Jon W. Howie: And then my second question and thinking about.

Todd Morrison Brooks: <unk> is proving ground for items coming back from the menu Steve how.

Steven J. Hislop: How much broadening of the menu are you comfortable with with these customer favorites coming off the CKOs? How many would you expect to be on the menu by year end? And are you kind of rationalizing anything off the menu to try to maintain some of that simplicity that you built in over the course of the pandemic?

Todd Morrison Brooks: How much broadening in the menu or are you comfortable with these customer favorites coming off the CK I was how many would you expect to be on that.

Steven J. Hislop: Menu by year end and are you are.

Steven J. Hislop: Are you kind of rationalizing anything off the menu just trying to maintain some of that simplicity that you built in over the course of the pandemic.

Steven J. Hislop: Great, great question. Exactly what you just said. Yeah, we felt great about adding the bowls because it's really a burrito that we currently pretty much almost do, but now it's in a bowl. So again, it wasn't adding a lot of prep and a lot of excitement in the back of the house as far as, you know, moving around a lot since everything's on the station.

Speaker Change: Great Great question exactly what you just said, yes. These ones we felt great about adding the balls because it's really a burrito that we currently are pretty much almost do but now it's in a ball. So again it wasn't adding a lot of prep and a lot of excitement in the back of the house as far as.

Steven J. Hislop: Moving around a lot says is everything is on the station. So we were very comfortable adding those on but as we have a very disciplined approach as we continue to move forward as we look at adding any of our CTO is because that is a proving ground for possibly some new items as we evolve our menu will be very discipline that when we have one come on we'll absolutely go.

Steven J. Hislop: So we were very comfortable adding those on. But we have a very disciplined approach as we continue to move forward, as we look at adding any of our CKOs, because that is a proving ground for possibly some new items as we evolve our menu, we'll be very disciplined that when we have one come on, we'll absolutely look at our product mix, find out where it's come from, and possibly move one or another one off. So we'll be doing that as we always do, but we'll be very disciplined in our approach across all of our stations and how well we can execute all of them. Okay, perfect. Thank you both.

Steven J. Hislop: Look at our product mix find out where it's come from and possibly move one another one off so it will be doing that as we do but we'll be very disciplined in our approach.

Steven J. Hislop: All of our stations and how well we can execute all of us.

Steven J. Hislop: Okay perfect. Thank you both.

Speaker Change: Thank you so much.

Operator: Thank you so much. Thank you. Our next question is from Brian Vaccaro with Raymond James. Please proceed with your question.

Steven J. Hislop: Thank you. Our next question is from Brian Vaccaro with Raymond James. Please proceed with your question.

Brian Michael Vaccaro: Hi Steve, I think you alluded to it earlier, but just in light of the software environment and one where it seems that you have to have value, but you also need to message it effectively, could you just elaborate a little bit on just how you're adjusting your tactics, any changes in your marketing message or your CKOs beyond the latest launch that you're thinking about?

Brian Michael Vaccaro: Hi, Thanks, Steve I think you alluded to it earlier, but just in light of the softer environment in one way. It seems that you have to have value, but you also need to message. It effectively could you just elaborate a little bit on just how you're how you're adjusting your tactics any changes in your marketing message or <unk> beyond.

Brian Michael Vaccaro: The latest launch that Youre thinking about sure sure.

Steven J. Hislop: Sure, sure. The one thing that we have is value all throughout our menu, not only in our price point, which is our price point spread because of our pricing increases compared to our competitors. We have actually increased our value spread over the years. So we're very great with that. But also, you know, we've always said that there's no white space on our plates, which is also screaming value than our meal kits.

Brian Michael Vaccaro: One thing that we have is value all throughout our menu not only in a price point, which is.

Steven J. Hislop: Our price point spread because of our pricing cases compared to our competitors, we actually increased our value spread over the year. So we're very great with that but also we've always said that if there is no white space on our R.

Steven J. Hislop: On our plates, which is also a screaming value then on meal kits. So those things that I. Just mentioned were actually moved our digital to really talking at all about that type of stuff not only the value of the price point, but also the value over the amount of food that you get and the experience that you get it in so that's been and as you know.

Steven J. Hislop: So those things that I just mentioned, we've actually moved our digital to really talking all about that type of stuff, not only the value of the price point but also the value of the amount of food that you get and the experience that you get it in. So that's been it.

Steven J. Hislop: And as you know, as you know, Brian, the one thing about digital is you can quickly turn on a dime with your message. Our message has been, you know, always talking about value, but we spent a lot of time talking about our defining differences, whether it be our hand squeezed lines for our margaritas or our first product: we have nothing frozen, we don't have freezers. So we'll still be in it.

Steven J. Hislop: As you know Brian the one thing about digital as you can.

Steven J. Hislop: <unk> turn on a dime on your message I message as has been.

Steven J. Hislop: Always talking about value, but we spent a lot of time talking about our defining differences whether it be our hand squeeze lives for our Margarita is our first product we have nothing frozen we don't have freezers that will still be in it but it is probably going to be a little bit more tainted to specifically our value message and all the mediums that we're doing obviously we're.

Steven J. Hislop: But it's probably going to be a little bit more tainted with specifically our value messages in all the mediums that we're doing. You know, we're obviously on social with Meta, Facebook, and we're on that all quarter; we have we're doing search with Google, or on YouTube all quarter; we're on TikTok eight weeks in the quarter. Then we have programmatic CTV, which is some of our videos that really show our value and some of our price points. We'll definitely do it on all our email, email, and eblast campaigns, which will do two per period.

Steven J. Hislop: On social with meta.

Steven J. Hislop: Face Brooklyn, where on that all quarter, we have we're doing search with Google or on new towboat quarter were on tick tock eight weeks in the quarter than we have programmatic CTV, which is some of our videos that really showing our value and some of our price points I.

Steven J. Hislop: I will definitely do it on all our email E blast that will do two per period and then obviously <unk> is value in the third party delivery promotions is dealing with value. So that's pretty much we are hitting it hard and having and the reason we're hitting it hard and heavy as you know if you look at the competitive environment out there specifically over the last six weeks.

Steven J. Hislop: And then obviously, our CKO has value, and the third-party delivery promotions are dealing with value. So that's pretty much where we're hitting it hard and heavy. And the reason we're hitting it hard and heavy is, you know, if you look at the competitive environment out there, specifically over the last six, six months, you're now seeing all our competitors and even some fast food and even some quick casual really getting on major media and talking about their price cuts or things like that.

Steven J. Hislop: Six months you are now seeing all our competitors and even some fast food and even some quick casual really get non major medium and talking about their price offs or are things like that and thats really been back only for about six months and thats. After two two and a half years, where they werent known.

Steven J. Hislop: And that's really been back only for about six months. And that's after two, two and a half years where they weren't, they weren't discounting it all through COVID. So now this is a new phenomenon again. And again, just like 2019, where that was part of their, their, their, their media plan back then, it will start doing that. And as people go in and eat at the restaurant, they're going to realize the food hasn't changed. So again, we feel a message of value is the right way for us to go.

Steven J. Hislop: Discounting at all through Covid. So now this is a new phenomenon again.

Steven J. Hislop: And again, just like 2019, where that was part of their their their media plan back then and we will start doing that and as people go in any of the restaurants are going to realize the food hasnt changed.

Steven J. Hislop: We feel our message on the value is the right way to for us to go.

Brian Michael Vaccaro: All right, thank you, that's helpful. And Jon, sorry if I missed it, just a bookkeeping question, but when were our operating weeks in the quarter, if you have that handy?

Speaker Change: Alright. Thank you that's helpful and John sorry, if I missed it just a bookkeeping question, but what we're operating weeks in the quarter.

Brian Michael Vaccaro: Handy.

Jon W. Howie: Um, da da da da...

Brian Michael Vaccaro: Okay.

Brian Michael Vaccaro: Yes.

Speaker Change: That does it.

Jon W. Howie: We should have it in the...

Speaker Change: How should we we.

Speaker Change: Should evident.

Jon W. Howie: Yes.

Jon W. Howie: Okay.

Brian Michael Vaccaro: I can follow up offline if you don't have it there. Yeah, I'll, I thought I'd, yeah, I'll follow up with you. Okay.

Speaker Change: I can follow up offline if you don't have it.

Speaker Change: I thought.

Speaker Change: I'll follow up with you okay. Thank you very much.

Jon: Thanks, Brian.

Brian Michael Vaccaro: Yes.

Brian Michael Vaccaro: Yes.

Brian Michael Vaccaro: Yeah.

Operator: Thank you. Our next question is from Andrew Wolf with CLK. Please proceed with your question.

Brian Michael Vaccaro: Thank you. Our next question is from Andrew Wolf with C. L. King. Please proceed with your question.

Andrew Paul Wolf: Thanks, I just wanted to ask about the adjustments, the calendarization of Easter and the weather. If we applied that number, it's almost 2% to the... You know, the traffic being down 6-9. I'm making sure I'm thinking along with you guys. It would be down about 5%, uh... would have been the sort of calendar and, uh... weather-adjusted view of the traffic, the guest count.

Andrew Paul Wolf: Hi, Thanks, I just wanted to ask.

Andrew Paul Wolf: About the adjustments.

Andrew Paul Wolf: Calendar realization of Easter and the weather.

Speaker Change: All right.

Andrew Paul Wolf: Did that number it's almost 2% to the.

Andrew Paul Wolf: The traffic being down six nine it would.

Andrew Paul Wolf: Sure I am doing thinking along with you guys it would be down about 5%.

Andrew Paul Wolf: Would have been the sort of the calendar and weather adjusted.

Andrew Paul Wolf: View of Europe.

Andrew Paul Wolf: The traffic the guest count.

Jon W. Howie: Well, I mean, 69. You're down to 1.2 with that.

Andrew Paul Wolf: Let me remind you were down one point to with that.

Andrew Paul Wolf: It's 1-2 on the sales end.

Jon W. Howie: <unk> on the sales impact.

Jon W. Howie: Yeah, so the 4.3 was already adjusted for the calendar, so when we do ours, it's an operational base from calendar to calendar, not fiscal. We kind of give you the fiscal for your modeling purposes. But it's 4.3. The weather and Easter were 1.2 degrees.

Andrew Paul Wolf: So yes, so the $4 three.

Jon W. Howie: <unk> was already adjusted for the calendar. So when we when we do ours as an operational base from calendar calendar not fiscal we kind of give you the fiscal for your model purposes, but it is 493.

Speaker Change: I'll take the weather out too.

Jon W. Howie: Alright.

Jon W. Howie: The weather and Easter was one two together.

Andrew Paul Wolf: Top sales, so 6.9 minus the 1.2.

Jon W. Howie: Sales comp sales of $6 nine minus one two.

Andrew Paul Wolf: Okay.

Andrew Paul Wolf: Does that make sense? Yeah, I guess I read that wrong. And currently, if you took the 2.2% quarter to date, check out the check and assumed it was running that up to six. Now you're running, a little under 5%. So your guess count on this basis is improved, whatever, 50, 70 basis points sequentially. Is that about it? Yeah. Okay, and is that Uber Eats, or is that more of your marketing, or do you think the environment's gotten a little better? What would you think about that?

Speaker Change: That makes sense okay.

Andrew Paul Wolf: Yeah.

Andrew Paul Wolf: I guess I read that right.

Andrew Paul Wolf: Currently if you took the two 2%.

Andrew Paul Wolf: Quarter to date.

Andrew Paul Wolf: Got to check and assumed it was running that.

Andrew Paul Wolf: Two six now Youre running.

Andrew Paul Wolf: A little under 5% so youre your guest count on this basis has improved whatever 50 70 basis points sequentially.

Speaker Change: Yes, yes.

Andrew Paul Wolf: Okay and is that.

Andrew Paul Wolf: Is that.

Andrew Paul Wolf: The overeats or is that more.

Andrew Paul Wolf: Or.

Andrew Paul Wolf: Youre marketing or what do you think the environment has gotten a little better how would you think about that.

Andrew Paul Wolf:

Steven J. Hislop: It's it's it's I think it's both. Obviously, it's both. This is how we're looking at it. Definitely Uber Eats, there's a big headwind or rollover.

Andrew Paul Wolf: It's I think it's both obviously it's both.

Steven J. Hislop: We're looking at it definitely that will bear Eaton is a big headwind or rollover.

Steven J. Hislop: And then.

Steven J. Hislop: What we said.

Steven J. Hislop: I just mean, in the quarter to date, you know, with the guest traffic being a little better. I mean, everybody's having trouble, but I'm just trying to dig inside that, given that it's, you know... So important.

Steven J. Hislop: I just mean in the quarter to date with the guest traffic being a little better.

Steven J. Hislop: I mean is that a problem, but I'm just trying to dig inside that given that you know.

Steven J. Hislop: How important that is.

Andrew Paul Wolf: Yeah, I think all of it. Yeah, I mean, just the environment, I think, is getting a little better from what we've seen from our trends. Now, with that being said, we are in the south-southeast, and you've seen all the tornadoes going through this area in the last few weeks, so, you know, that's in those numbers as well.

Speaker Change: Yes, I think.

Steven J. Hislop: Is it.

Andrew Paul Wolf: Yes, I mean, just the environment I think is getting a little better.

Andrew Paul Wolf: From what we've seen from.

Andrew Paul Wolf: <unk> from our trends.

Andrew Paul Wolf: Now with that being said we are.

Andrew Paul Wolf: Our in the in the South southeast.

Andrew Paul Wolf: And you've seen all the tornadoes going through this area in the last few so.

Andrew Paul Wolf: That's in those numbers as well.

Andrew Paul Wolf: Okay.

Andrew Paul Wolf: And what's your sense of your feeling about marketing being a way to get the guest count up? Highly, you know, elasticity is not the right word, but is that impactful for you?

Speaker Change: And what's your sense of your feeling about.

Andrew Paul Wolf: Marketing as a way to get the guest count up.

Andrew Paul Wolf: <unk>.

Andrew Paul Wolf: Highly you know last year that he is not the right word.

Andrew Paul Wolf: Impactful for you or is it.

Steven J. Hislop: You want to do social media, LTOs, and stick with your knitting? Well, I think social media, a lot of that is really you share a voice. It's kind of just keeping your baseline out there. We believe the value messages that we've switched to on YouTube, programmatic video, have a little bit more of an impact and are moving the needle a little bit there, and just switching to about an 80% value message and a 20% competitive advantage message, we feel is the right way to go.

Andrew Paul Wolf: <unk>.

Andrew Paul Wolf: You want to do social media L T OS and stick with Ned I think social media is a lot of that is really a share of voice is kind of just keeping your baseline out there we believe the value messages on that.

Steven J. Hislop: Switch to on Youtube programmatic video has a little bit more of an impact on moving the needle a little bit there and just switching to.

Steven J. Hislop: About 80% value message and a 20%.

Steven J. Hislop: Competitive advantage a message as we feel is the right way to go.

Steven J. Hislop: Okay.

Speaker Change: Okay. Thank you.

Steven J. Hislop: Thanks.

Operator: Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn the call back over to Mr. Steven Hislop for closing comments. Thank you.

Steven J. Hislop: Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn the call back over to Mr. Steve Hislop for closing comments.

Steven J. Hislop: Thank you so much. We appreciate your continued interest in Chuy's and are available to answer questions at any and all times. I mean, answer questions, any and all questions. Again, thank you for, thank you again, and have a good evening.

Steven J. Hislop: Thank you. So much. We appreciate your continued interest in <unk> and are available to answer questions that any.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Steven J. Hislop: Answer questions any and all questions again, thank you for thank.

Operator: Thank you again and have a good evening.

Operator: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.