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Chuy’s closes units

The underperforming stores will be shuttered by the end of the year, the chain says.
Chuy's sign
Photograph: Shutterstock

Chuy’s decided over the weekend to close four of its 104 restaurants by the end of the year, according to a securities filing, making it the latest casual-dining chain to shutter stores in the face of falling traffic. 

At least two of the restaurants, in Annapolis, Md., and Tuscaloosa, Ala., were closed immediately, according to local media reports. 

Chuy’s suggested in releasing its third quarter earnings report that closings might be coming. The company noted that five restaurants had been identified as underperforming during the quarter, resulting in a $7.1 million noncash loss for those properties. 

The chain said at the end of the previous quarter that it would back off on expansion until traffic rebounds in the casual-restaurant market. Chuy’s guest counts declined 1.9% in Q3, but same-store sales rose 2.6% on a 4.5% increase in the average check. Two restaurants have opened since the end of Q2. 

Industry customer counts fell overall by 3.5% during the third quarter, according to research company Black Box Intelligence.

A number of full-service chains have been closing units in the face of declining traffic, which many observers attribute to an oversupply of restaurants. Friendly’s, Red Robin and Del Frisco’s have all pruned their systems of weak operations in recent weeks, following larger-scale shutdowns earlier in the year. 

Pizza Hut has said it could close as many as 400 of its sit-down restaurants, while Steak ‘n Shake has shut 106, though it maintains those closings are temporary. 

Don Pablo’s Grille Mexicana and Farrell’s Ice Cream Parlour have shut down completely. 

Chuy’s reported a loss of $1.8 million for Q3, compared with a shortfall of $7.5 million for the year-ago quarter. 

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