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Edited Transcript of CHUY earnings conference call or presentation 5-Mar-20 10:00pm GMT

Q4 2019 Chuy's Holdings Inc Earnings Call

Austin Mar 22, 2020 (Thomson StreetEvents) -- Edited Transcript of Chuy's Holdings Inc earnings conference call or presentation Thursday, March 5, 2020 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jon W. Howie

Chuy's Holdings, Inc. - VP, CFO & Director

* Steven J. Hislop

Chuy's Holdings, Inc. - Chairman, CEO & President

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Conference Call Participants

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* Andrew Strelzik

BMO Capital Markets Equity Research - Restaurants Analyst

* Christopher Thomas O'Cull

Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst

* Daniel Peer Docherty

Raymond James & Associates, Inc., Research Division - Research Associate

* Mary L. Hodes

Robert W. Baird & Co. Incorporated, Research Division - Junior Analyst

* Nerses Setyan

Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst

* Todd Morrison Brooks

CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the Chuy's Holdings Fourth Quarter 2019 Earnings Conference Call. Today's call is being recorded. (Operator Instructions)

On today's call, we have Steve Hislop, President and Chief Executive Officer; and Jon Howie, Vice President and Chief Financial Officer of Chuy's Holdings, Inc.

At this time, I'll turn the conference over to Mr. Howie. Please go ahead, sir.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [2]

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Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2019 earnings release. If not, it can be found on our website at ww.chuys.com (sic) [www.chuys.com] in the Investors section. Before we begin our review of formal remarks, I need to remind everyone that part of our discussions today will include forward-looking statements. These forward-looking statements are not guaranteeing future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

With that, out of the way, I'd like to turn the call over to Steve.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [3]

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Thank you, Jon. Good afternoon, everyone, and thank you for joining us on the call today. We ended the year with a strong fourth quarter performance as we continue to execute our sales and profit initiatives we laid out at the onset of 2019. On a high level, we grew our fourth quarter revenues by 5.4% and posted our seventh consecutive quarter of positive comparable restaurant sales. More importantly, despite continued cost pressures during the quarter, we successfully leveraged our restaurant operating costs and posted a solid improvement in our restaurant-level operating margin. This resulted in adjusted net income growth of over 50%. Our initiatives are clearly working and giving Chuy's a solid footing as we enter 2020.

With that, let's review these initiatives and what we plan to accomplish in 2020.

Let's start with our marketing strategy. Most of you are aware that we enlisted media marketing partner, Kelly Scott Madison, at the end of 2018, and we have used most of 2019 as a testing ground, especially in the digital space. Our nationwide digital outreach, which has included paid search, paid social media campaigns and location-based mobile advertising have been productive as we experienced improved sales and stronger brand recognition, and we intend to build upon this success in 2020.

While our marketing spend will be similar to 2019, based on our learnings last year, our approach will be more targeted and strategic. To that end, in addition to our national-wide digital outreach, we will continue to utilize a twofold approach to our marketing strategy in 2020 by focusing on 2 markets every quarter. The first will include a heritage market, where we already have several stores in the area with solid brand recognition. The second market will be an emerging market where we feel the need to better educate our guests on the Chuy's experience.

In both of these markets, you'll see an increased use of digital platforms such as YouTube, Hulu, Waze; paid search as well as paid social, supported by some traditional advertising throughout promotional radio; outdoor boards; billboards; local event sponsorships. For the first quarter, we will focus our attention on Dallas and Washington, D.C. markets.

Moving on to our investment in technology. During the fourth quarter, we continue to utilize our new table management system to improve our front-of-the-house efficiency as well as gather customer intelligence through our opt-in WiFi services. In the coming months, we will also work -- we'll be working closely with our platform provider to implement an ability to track our customer spending behavior. Together, this intelligence will serve as the foundation of our future loyalty program and allow us to market targeted offerings to specific customers for a more personalized experience.

In addition, we are also testing 2 new pieces of technology to enhance our customer experience in our restaurants. The first one is pay-at-the-table device that we are currently testing at one of our high-volume restaurants. We believe this device could potentially relieve a lot of the frustrations that can come from an extended wait for a ticket following a great dining experience. Our second test involves the use of a handheld ordering device with the goal to enhance our hospitality by keeping our waiters and waitresses on the floor more to improve guest engagement. While both of these devices are still in early stages, the feedback so far has been very favorable.

Turning to our off-premise strategy. Our catering initiatives continue to perform well as we successfully rolled out our platform in 2 new markets during the fourth quarter. For the quarter, catering contributed approximately $2.2 million in revenue compared to $0.6 million in the previous year's quarter. A key component of our catering success to date has been the addition of a dedicated catering manager for each new market. For 2020, we will continue to roll out our catering platform in 2 markets for each quarter, with the goal of reaching 19 markets by the end of the year.

Another aspect of our off-premise offering is third-party delivery. During the fourth quarter, we signed an agreement with DoorDash to become our system-wide delivery provider. We expect DoorDash service to be completely rolled out by the end of the first quarter of this year, which would include the 32 restaurants that previously did not have a third-party delivery. Among other benefits, we believe this partnership will reduce the overall delivery cost of these orders. However, keep in mind that we plan on reinvesting a portion of savings from delivery fees into improving our to-go packaging to ensure the freshness and the quality of our food as it gets delivered to our customers.

The last aspect of our off-premise strategy is Dispatch, which should allow us to synchronize our online ordering and delivering process for improved efficiency and order accuracy for these sales as well as providing a delivery option from our company's website versus third-party provider's website.

Based on positive feedback from our test locations, we have begun rolling out dispatch system-wide, which we expect to also complete by the end of the first quarter. Both DoorDash and Dispatch will be supported by marketing once they have fully launched system-wide.

Now let me turn to our development plan. We successfully opened 1 restaurant during the fourth quarter, Polaris, Ohio, near Columbus, bringing our 2019 openings to 6 new restaurants, all of which are located in existing markets with proven AUVs. We also made the decision to close 4 restaurants during the fourth quarter. For 2020, we will continue to balance our new unit development with the initiatives to drive sales and improve restaurant profitability. To that end, we expect to open 5 to 7 restaurants primarily in existing markets. This includes a new restaurant in Frisco, Texas, which opened last month. We're also making progress on our new real estate analytics tool test with the plan to utilize it for our development pipeline in 2021 and beyond.

With that, I'd like to turn the call over to our CFO, Jon Howie, for a more detailed review of the second quarter's results.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [4]

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Thanks, Steve. Revenues for the fourth quarter ended December 29, 2019, increased to $102 million compared to $96.8 million in the same quarter last year. The increase was primarily driven by $5.8 million in incremental revenue from an additional 80 new store operating weeks as well as comparable restaurant sales growth. These increases were partially offset by a decrease in revenue as a result of the loss of 50 operating weeks due to store closures during the year as well as a decrease in sales from noncomparable restaurants that are not included in the incremental revenue just mentioned. In total, we had approximately 1,327 operating weeks during the fourth quarter of 2019.

Comparable restaurant sales increased 2.9% during the fourth quarter and included a 3.9% increase in average check, partially offset by a 1% decrease in average weekly customers. Effective pricing during the quarter was approximately 3.6%.

Turning to a discussion of selected expense line items. Cost of sales as a percentage of revenue decreased 20 basis points to 26.1%, driven by favorable pricing in produce, chicken and grocery, partially offset by unfavorable beef and dairy pricing. All in all, commodity inflation for the fourth quarter was approximately 2%. Based on current trends, we are now expecting 1.5% to 2.5% in commodity inflation for 2020.

Labor cost as a percentage of revenue decreased approximately 150 basis points to 35.7%, primarily due to menu price leverage, increased labor efficiency at new store openings and lower training expense for new managers. This was partially offset by hourly labor rate inflation on our comparable stores of approximately 3.2%.

Operating costs as a percentage of revenue increased 30 basis points to 15.2% compared to last year's quarter, primarily due to higher insurance costs and delivery service charges. Marketing expense as a percentage of revenue increased 20 basis points to 1%, driven by our national-level marketing initiatives.

Occupancy costs as a percentage of revenue decreased 30 basis points to 7.7% as we leveraged our fixed occupancy costs on higher sales, partially offset by higher rental expense at certain newly opened restaurants in larger markets. General and administrative expenses increased to $5.7 million in the fourth quarter from $5.2 million in the same quarter last year, primarily driven by an increase in performance-based bonuses and salaries.

In summary, net loss for the fourth quarter of 2019 was $1.4 million or $0.09 per diluted share compared to net income of $3.4 million or $0.20 per diluted share in the same period last year. During the fourth quarter of 2019, we recorded an impairment charge, closed restaurant costs and offset by legal settlements of $6.1 million or $0.26 per diluted share net of tax. This included a noncash impairment charge of approximately $5.6 million related to the closure of 4 underperforming restaurants during the quarter as well as $0.7 million in closed restaurant costs. Taking that into account, adjusted net income for the fourth quarter of 2019 increased 55.4% to $2.9 million from $1.8 million, and adjusted net income per diluted share increased 54.5% to $0.17 from $0.11 per share in the same period last year. We ended the quarter with $10.1 million in cash on the balance sheet with no debt.

Now let's discuss our 2020 outlook. We currently expect adjusted earnings per diluted share of between $1.15 and $1.19. This compares to 2019 adjusted earnings per diluted share of $1.04. Additionally, as we noted earlier, we closed 4 restaurants during the fourth quarter. These restaurants accounted for approximately $7.5 million in revenues during 2019 and reduced our earnings by approximately $0.07 per diluted share.

Now our guidance is based on the following updated assumptions. We expect comparable restaurant sales growth for the year of 2% to 3%. We expect restaurant preopening expenses of approximately $2.4 million to $3.3 million. We expect G&A expenses of between $24.5 million to $26.5 million. Our effective tax rate is expected to range between 6% to 8%, and we are modeling annual weighted average diluted shares outstanding of 16.9 million to 17 million shares. We are planning to open 5 to 7 new restaurants this year. And lastly, our capital expenditures net of tenant improvement allowances is projected between $23 million and $30 million.

With that, I'll turn the call back over to Steve to wrap up.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [5]

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Thanks, Jon. We are pleased with the health of our business and believe that the initiatives we've put in place will continue to strengthen our overall performance. We look forward to capitalize on this momentum, and we -- as we enter 2020, and we'll remain focused on taking care of our customers through our exceptional service and high-quality, made-from-scratch food and drinks.

Lastly, I'd like to thank all of our employees for their tireless work and dedication and making Chuy's a truly differentiated experience for both our new and returning guests.

With that, we're happy to answer any questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question is from Nick Setyan from Wedbush Securities.

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Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [2]

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Congrats on a fantastic year.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [3]

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Thanks, Nick.

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Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [4]

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You wouldn't -- you probably would not have given 2% to 3% comp guidance if the quarter-to-date comp didn't warrant that kind of guidance, but any incremental detail on January and February would be helpful.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [5]

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Yes. As far as January and February, it continued our third and fourth quarter trends.

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Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [6]

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Okay. Have you seen any kind of near-term change in customer behavior due to coronavirus-related fears?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [7]

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Not yet that we've seen anything in the last month or so.

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Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [8]

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And this is -- I know it's not an exact science, Jon. But if we did see some kind of short-term demand slowdown, 20%, 30% types of decline in sales, what would you estimate your variable costs like short-term variable costs are? Is all of food cost variable? Is a part of labor variable? Are you going to continue paying your hourly employees even if they don't come to work? How should we think about that scenario?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [9]

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I don't have that in front of me. But I mean basically, you're talking probably, I would say, probably about 70%, 80% of our costs are variable and the rest fixed. So given the scenario that you're talking about, obviously, some of those variable costs would become fixed. But I mean we don't foresee that yet. We're taking some precautions, but I mean we're just kind of waiting and seeing. And hopefully, this will correct itself. But obviously, there is some concern out there.

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Operator [10]

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Our next question is from Chris O'Cull from Stifel.

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Christopher Thomas O'Cull, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst [11]

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Just a follow-up -- just to follow up on that, Steve. I know most of your system isn't located in the so-called virus hotspot, so your overall comp hasn't be impacted, but have you seen any locations where there has been a perceptible change in sales trends that could be influenced by just slower tourism or slower conference usage or anything like that, that you could speak to?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [12]

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We have -- it might be the I-Drive, but we have -- it's still early to say there. We haven't got into the spring breaks or really anything yet in that, so as of now, not really.

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Christopher Thomas O'Cull, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst [13]

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Okay. And then I was hoping you guys could just elaborate a little bit more on why it makes sense for the company to start spending on national-level marketing mediums?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [14]

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We're just talking on the social and digital, and it's basically just covering where all my stores are. We're only in the 19 states. So that's what I'm calling nationals that we're just -- every single store is participating in the paid digital and paid social.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [15]

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And that's what we did all last year, Chris. It's nothing new.

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Christopher Thomas O'Cull, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst [16]

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Okay. Okay. And then, Jon, what same-store sales impact? Or what is the -- what's built into your comp guidance when it comes to rolling out delivery with DoorDash as an exclusive partner?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [17]

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Well, right now, since we have so many different delivery providers, we want to make the transition. And so I don't really have all that much built into it other than the 32 stores. And so you can figure that we've got probably 50 to 100 basis points in those stores that are adding the delivery.

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Christopher Thomas O'Cull, Stifel, Nicolaus & Company, Incorporated, Research Division - MD & Senior Analyst [18]

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Are you concerned at all about the stores that will be removing the other delivery providers seeing any kind of sales weakness because of that?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [19]

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Well, we've got some controls in place to combat that as far as we're going side by side for 90 days and with a lot of marketing behind the DoorDash, so that we can make sure that doesn't happen. So the transition to DoorDash is good. Also, we've got kind of something written in the agreement that if we were to decrease on the DoorDash, we can go ahead and bring in another service provider or bring back the other service provider. And so hopefully, we're not going to be in a situation where that decreases per se.

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Operator [20]

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And our next question is from Mary Hodes from Baird.

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Mary L. Hodes, Robert W. Baird & Co. Incorporated, Research Division - Junior Analyst [21]

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I just had a couple on the comp outlook. I mean, first, I think you mentioned recently that it would take about a 3% comp to hold the margin structure flat in 2020. So I guess, first off, has that relationship changed?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [22]

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Well, no, it hasn't changed. But I mean we're expecting a little lower inflation on cost of sales. So it may get us there a little bit if we're under 3% this year and I think our continued focus on labor as well with the decreased management in training. We opened about the same number of stores as we did last year with a higher revenue base. So we could see some leverage -- a little leverage in labor. You're not going to see the leverage that we saw this year, but we could still see labor being flat to a leveraged position this year.

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Mary L. Hodes, Robert W. Baird & Co. Incorporated, Research Division - Junior Analyst [23]

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That's helpful. And then I think they've previously talked also about potentially resuming a faster pace of unit growth in 2021, when you've got the eSite finalized. As you start to piece together that 2021 pipeline, is that still the plan that you have in mind?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [24]

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The key for the increasing the pipeline is, as you saw, we finished the year right around 1% down in guest count and very similar in the fourth quarter. I need to see a return of increased guest counts before I really jump in and say, "I'm going to accelerate it in 2021." And I think that's consistent with what I've been saying. So as soon as I see us up a customer, you'll see us for a couple of quarters. And then you'll see us probably get into the low double digits on real estate and openings.

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Operator [25]

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And our next question is from Todd Brooks from CL King & Associates.

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Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [26]

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Congratulations on a nice quarter. First question, just hoping that the team in Tennessee and the units all came out okay after the storms and the tornadoes.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [27]

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Well, thank you for saying that. And luckily for us, we had a couple of our employees affected, and we're taking care of them. But luckily, that's not, by far, the most important thing as all our folks are safe and sound. And the stores are actually up and running. They were -- luckily, it was a little bit north of all our stores there.

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Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [28]

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Well, great. That's great to hear. Just a couple of quick follow-up. Looking at the G&A guidance, the $2 million range, what drives the high end versus the low end of that range in the year, Jon?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [29]

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Really the target bonus. We basically budget the target bonus. And based upon whether we exceed our target or don't exceed it, it can fluctuate.

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Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [30]

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Okay. Great. And then the other question, I know we're in the middle of the third-party delivery kind of migration in parallel. But as we're all sitting here wondering how the coronavirus plays out and how it changes customer behavior with the existence of delivery for your concept, is that kind of percent of delivered orders or delivery demand? Is that something you're watching as kind of lead indicator of where customer behavior may be headed for the brand?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [31]

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We started -- yes, we're constantly looking at it on a week-to-week basis. Even to go digitally, what we've seen is -- we've been saying that it's been 17%, 18%. What we're seeing is our to-go digital, to-go sales have been exceeding 20% of our total off-premise. And so we're seeing that go up, especially, we would expect it to go up with delivery. Like I said earlier, with the 32 stores that we currently don't have delivery that, that will go up as well as a percent of sales. So yes, I mean we continue to look at that. And you're right, that's probably a good indicator of people staying at home.

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Operator [32]

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(Operator Instructions) And our next question is from Dan Docherty from Raymond James.

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Daniel Peer Docherty, Raymond James & Associates, Inc., Research Division - Research Associate [33]

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This is Dan on for Brian this evening. Quick question. I think you guys said commodity inflation up 1.5% to 2.5% for 2020. Could you walk through the puts and takes on what you're seeing in some of your major items, how you're contracted and what your pricing plans are for 2020?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [34]

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Yes. I mean the biggest thing that we've seen -- saw, especially in the first quarter as produce continues to go up, we're locked in for beef a little higher than last year. It's higher to flat. And then we're expecting a little in dairy, but the most part, it's -- the wildcard is produce, which is what we've seen in the last few years.

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Daniel Peer Docherty, Raymond James & Associates, Inc., Research Division - Research Associate [35]

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Okay. Great. And then one follow-up question. I'm sorry, did you say something?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [36]

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Yes, just one thing we didn't answer for you. We take pricing in the second period of our year, which is the beginning of February, and it's approximately around 3% for the year.

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Daniel Peer Docherty, Raymond James & Associates, Inc., Research Division - Research Associate [37]

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Okay. Great. And then a follow-up on labor. You guys have seen strong leverage in recent quarters. Could you break down the drivers of that leverage in a little more detail and then provide, I think, your expectations into 2020 on that line?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [38]

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Sure. If you take a look at kind of this quarter, hourly -- our hourly and what I've been saying is we've seen some improvement, not on leverage as well as opening our new stores, but we've seen hourly decreased about 30 basis points.

Our biggest one, though, is the management in training, which is about 90 basis points. That's a significant piece, and then managers in total was about 50 or 60 basis points decrease. And we continue to look at our manager pars and rightsize those as the sales fluctuate up or down to make sure we've got the appropriate amount of managers at each location.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [39]

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And how we're looking at it for the rest of this -- I mean as we go into 2020, it's obviously on the sales side, but we expect it to probably remain right where it's at, maybe a little bit of leverage on the labor line as we move forward for 2020.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [40]

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Sorry, I forgot to answer that. But we could see 10 to 20 basis points. We're not expecting the huge leverage that we saw in the current year.

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Operator [41]

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(Operator Instructions) And we have Andrew Strelzik from BMO Capital Markets.

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Andrew Strelzik, BMO Capital Markets Equity Research - Restaurants Analyst [42]

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A couple of questions for me. The first one, as the business has been able to absorb the higher levels of pricing over the last year or so and keep a kind of consistent traffic trend in that down 1% range, has your thinking around your pricing power changed at all? Do you believe that you have more -- greater ability to run higher price over kind of a longer duration than you would have thought maybe 1 to 2 years ago?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [43]

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No. No, I don't think so. What we do is really -- it's what the market. What I want to do is to be the value in the marketplace. And then we currently are.

Over the years, prior to last year and this year, we're probably an average of that 1.5% to 2% for the prior 10 years. And while we were averaging that, you were seeing a lot of casual dinings in the 3% to 4%, some even higher than that over the period of time there. So our value spreads actually gotten larger over the years in all our markets. So we just rightsizing that now as we're looking at for our markets the last 2 years. But we see -- we're still probably comfortable in that 1.5% to 2.25% range as we move forward.

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Andrew Strelzik, BMO Capital Markets Equity Research - Restaurants Analyst [44]

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Okay. And on the marketing side, I understand that you're running kind of national advertising on a more consistent basis. But in terms of the marketing that is cycling across markets, kind of on a quarterly basis, as you've -- in the markets where you've cycled off, have you maintained those levels of awareness? Or have you seen performance kind of stay relatively consistent as you've been able to cycle off? Or do you notice that you're going to have to, at some point, start to revisit some of those markets?

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [45]

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No. The key thing for us is when we're doing these at one heritage market and one kind of a new market, don't forget we still have all the paid search, paid digital, paid social and so forth that's constantly always running. So we're really never off. We're just giving a little awareness bump in there that we run for basically 6 months at a time in those markets. So we don't have -- we have not seen any drop-off on those.

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Andrew Strelzik, BMO Capital Markets Equity Research - Restaurants Analyst [46]

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Okay. And then the last one for me. Just wondering how you're thinking about the closure rate going forward? Did these fourth quarter closures kind of clean that up? And I'm wondering how much of those closures impacted the margins in the quarter as well.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [47]

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Well, as far as the closures impacting the margins, if you look at, like I said, it was about a $0.07 impact for the year. And it affected the margins for the year about 40 basis points on the overall store-level margins.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [48]

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And as just a rule of thumb as far as always -- look, we always are going to take a look at our bottom 10% stores and make sure that it makes sense for us to continue on with those from a human resource standpoint and, obviously, a financial standpoint because markets do move a little bit at times. And we'll constantly evaluate our bottom 10%.

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Operator [49]

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And our next question is from Dan Docherty from Raymond James.

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Daniel Peer Docherty, Raymond James & Associates, Inc., Research Division - Research Associate [50]

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Just a quick question on delivery. Could you let us know what the kind of expectation is in terms of whether menu prices will be higher on the DoorDash kind of channel versus dine-in? What are your thoughts on the sort of different channels and how you'll price them?

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [51]

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Thanks, Dan. Our plan is to increase the prices in kind of on a third delivery platform to help offset some of those delivery charges. We currently increased those prices as we increase period 2 menu prices for the year. So those are out there.

In the 32 stores that we actually started delivery, we increased those prices even a little more so that it was somewhat margin-neutral to the back door for those new stores on the platform.

And Dan, I want to follow up. I think I gave you some wrong things in the labor. The management was -- management piece of that was 30 basis points down, the manager in training was 90 basis points down, and then the hourly was 30 basis points down. So that equals your 150. Sorry about that.

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Daniel Peer Docherty, Raymond James & Associates, Inc., Research Division - Research Associate [52]

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Okay. Great. And then one more question, which is on share repurchases. I noticed the new authorization, but it doesn't look like you have any share repurchases embedded in your share count guidance for 2020. Just curious how you guys are thinking about share repurchases as we go through the year.

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Jon W. Howie, Chuy's Holdings, Inc. - VP, CFO & Director [53]

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Yes. We have never put that in the guidance just because we're trying to take an opportunistic approach in buying those, which, if you were to think that this was going to recover in a year, it would be a very opportune time to buy it right now, but we're in a quiet period. So we can only do it when the window is open, and that's 3 weeks after we release. And so we will probably have a 10b5-1 program put in place this year that will help with those purchases. But we don't currently have anything in our forecast for that.

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Operator [54]

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And we have reached the end of the question-and-answer session. And I will now turn the call over to Steve Hislop for closing remarks.

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Steven J. Hislop, Chuy's Holdings, Inc. - Chairman, CEO & President [55]

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

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Operator [56]

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