Chuy's Holdings, Inc.

fourth quarter 2023 earnings conference call. Today's call is being recorded. At this time, all participants have been placed in listen-only mode, and the lines will be open to questions following the prepared remarks. On today's call, we have Steve Hislop, President and Chief Executive Officer, and John Howey, Vice President and Chief Financial Officer of Choose Holding Incorporated. At this time, I will now turn the conference over to Mr. Hawley. Please go ahead, sir.

Thank you, Operator, and good afternoon. By now, everyone should have access to our fourth quarter 2023 earnings release. If not, it can be found on our website at Chewy's.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 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. Looking ahead, we plan to release our first quarter 2024 on Thursday, May 9th, at 2024, after the market closed. With that out of the way, I'd like to turn the call over to Chewy's president and CEO, Steve.

Thank you, John. Good afternoon, everyone, and thank you for joining us on the call today. I am proud of what Chewy's accomplished during 2023. We grew revenues almost 9.3%, driven by comparable restaurant sales of approximately 3.3%. Our team's ability to effectively execute on our four-wall operations resulted in a 200 basis point expansion of restaurant-level margins to over 20%, representing our best result in over a decade, excluding the COVID impact of 2021 and among the best in the industry. And finally, we returned approximately $28.9 million to our shareholders through share repurchases enabled by the ongoing strength of our operating model. As we look ahead, we will continue to do what we do best, to provide our guests with fresh, made-from-scratch food and drinks at an incredible value. Despite weather issues across the country that has impacted the restaurant industry in January, we believe the initiatives we've put in place to drive long-term, sustainable, top-line growth and profitability has positioned us well to weather these near-term challenges. With that, let me provide some update on our growth drivers, starting with menu innovations. As we mentioned on our last call, we introduced our first barbell approach to the CKO platform during the fourth quarter, and we were very pleased with how well it was received by our guests. In fact, this was our second most successful Chewy's Knockout campaign to date. Following this success, we were thrilled to introduce to our guests the next CKO iteration in late January with shrimp and crab enchiladas with lobster bisque sauce as a higher-priced CKO menu item, along with macho nachos, and the cheesy pig burrito. Again, early feedback continues to be positive as our CKOs are resonating well with both new and returning guests. Alongside our exciting CKO offering, we recently added several new menu items to our permanent menu, including reintroducing the appetizer plate and adding the burrito bowls. If you recall, burrito bowls were part of our CKO platform during the second and third quarter of 2023. and this menu addition is a reflection of how well our burrito bowls performed last year and the high demand from our guests to bring them back to a permanent menu. Chewy's Knockouts is not only a platform that we created to introduce our guests to exciting new menu innovations, but also a tool to help us optimize our regular menu to further drive traffic to our restaurants. We also delivered another strong off-premise performance during the quarter, mixing at approximately 31%, with our delivery channel continuing to perform well at mixing at approximately 12%, a 160 basis point increase from last year. In terms of catering, we continue to roll out the easy catering platform to our restaurants and are on track to complete this rollout by the end of the first quarter. Our catering channel is currently mixing at approximately 4.8% for the quarter. Going forward, we continue to believe our off-premise channel will be at least 25% of our sales with catering contributing between 4% and 6% of total sales. While the fourth quarter is typically our highest mixing quarter for catering, we are encouraged by the growth we continue to see in the channel and believe we can achieve our long-term catering targets over the next 24 months. In terms of marketing initiatives, we believe our current approach to marketing has been effective in communicating our defining differences from our made-from-scratch food and drink offered at an incredible value to our unique CKO offerings and the unique overall experience at every Chewy's restaurant. To that end, we will continue to put heavy emphasis on digital media and optimize our campaigns through the use of Google, TikTok, Instagram, and Facebook, including organic influencer content, YouTube video advertising, and promotional advertising with DoorDash and Uber. In addition, we will include some spot on programmatic connected TV targeting live sports events during March Madness. Lastly, let me update you on our development plan. During the fourth quarter, we successfully opened one new restaurant in Terrell, Texas, bringing our total restaurant count to 101 as of the end of fiscal 2023, with four new restaurants open during this year. As we look into 2024, we continue to have a robust pipeline with a goal to open between six to eight new restaurants focused primarily in core markets where our concept is already proven with high AUVs and brand awareness. We expect to open two restaurants in the first half of the year, including our first location of the year in New Bronzeville, Texas, which opened this week. With that, I'll now turn the call over to our CFO, John Howard, to discuss our fourth quarter results in greater detail.