Chuy's Holdings Inc (CHUY) Q4 2018 Earnings Conference Call Transcript

Chuy's Holdings, Inc. (CHUY -0.69%)
Q4 2018 Earnings Conference Call
March 7, 2019, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants
  
  

  See all our earnings call transcripts.

Prepared Remarks:

Operator

Please standby. Good day, everyone. And welcome to the Chuy's Holdings fourth quarter 2018 earnings conference. 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 questions following the presentation. On today's call, we have Steve Hislop, President and Chief Executive Officer and Jon Howie, Vice President and Chief Financial Officer of Chuy's Holdings, Incorporated. At this time, I'd like to turn things over to Mr. Howie. Please go ahead, sir.

Jon Howie -- Vice President and Chief Financial Officer

Thank you, Operator, and good afternoon. By now, everyone should have access to our fourth quarter 2018 earnings release. It can also be found on our website at 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 guarantees 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. With that out of the way, I'd like to turn the call over to Steve.

Steve Hislop -- President and Chief Executive Officer

Thank you, Jon. And thank you to everyone for joining us on the call today. Let me start with a high-level overview of 2018. And then we'll go over what we have in store for you for 2019. While 2018 was a challenging year for Chuy's, it was also a year of accomplishments. At the onset of 2018, we laid out several initiatives that were designed to ensure that our business involves with the changing customer needs. These initiatives which revolve around marketing, technology, off-premise, and labor strategies will best serve as a foundation to further our operational excellence and position Chuy's to generate healthy top line and earnings growth in the years to come. On the marketing front, we continue to focus on improving our brand awareness and value messaging in both core and new markets. Our digital campaign tests in the fourth quarter yielded positive returns and helped define our 2019 digital marketing strategy.

Paid search, paid social, and location-based mobile advertising will remain consistent throughout the first half of the year, covering all of our locations. As a result of a successful media test in Chicago and Washington, D.C. during the fourth quarter, we continue our focus in these markets for the five weeks leading up to national Margarita Day on Friday, February 22nd. Tactics include using promotional radio, metro rail posters, and advertising on digital platforms, including Hulu and Spotify. Looking ahead, our second quarter campaigns will include brand awareness efforts in Chicago and frequency driving initiatives in Houston. We have also identified certain test markets where we'll have developed separate and specific plans with our local operators focused on out of the box local store marketing ideas and specific day of the week specials to help build traffic. Based upon these marketing initiatives, we plan on increasing our advertising spend approximately 1.35 of sales for the upcoming year.

Turning to technology initiatives, we completed the rollout of the Olo online ordering system to all our restaurants during the fourth quarter. Early adoption rate is very encouraging. And this positive trend is continuing in the first quarter. In fact, despite the lack of advertising, our to-go sales through Olo now represent approximately 13% to 14% of all to-go ordering. For 2019, we will continue to iron out any kinks in the operations process and plan to start promoting this platform beginning in the second quarter. As we've mentioned in the past, this platform will be a stepping stone for our future loyalty program which we will start to explore in the back half of this year. We also rolled out our catering initiatives to two additional markets in the fourth quarter. We now have catering in a total of five markets. We are excited with the constant growth in this area. Catering gives us another avenue for revenue growth while simultaneously improving awareness of the Chuy's brand.

For 2018, our catering platform contributed approximately $1.6 million in revenue compared to approximately $400,000 the same period last year. Looking ahead, we are planning to add catering to six additional markets beginning in the second quarter of 2019. With regard to labor initiatives, we will complete the integration of the new labor management tool with our POS system during the first quarter and roll it out systemwide in the second quarter. While we likely won't begin to see benefits until the back half of 2019, this new tool will help us mitigate the ongoing labor pressures by optimizing our labor productivity as well as enhancing our sales projections. We also continue to enhance our new store opening staffing as well as glide path labor hours to get to a standard labor hours based upon volume by the seventh month.

Finally, with regard to labor, we are focused on reducing our store-level management powers by developing a server expo program that will provide a training ground for new managers and allow us to reallocate some management accountabilities to server expos and strategic time periods, thereby reducing our managers per store. Now, I'd like to take a moment to touch on development. During the fourth quarter, we opened two new restaurants: one in Overland Park, Kansas and one in Houston, Texas. With these openings, we successfully grew our store base by 10% in 2018 with the addition of nine new Chuy's restaurants. For 2019, with building brand awareness and frequency in the forefront of our mind, we are limiting our development to between five and seven restaurants with all our new unit growth planned for areas with proven high average unit volumes.

We believe this strategy will allow us to balance new unit growth while driving sales and improving restaurant-level margins in our existing restaurants through our current initiatives. Subsequent to the end of the quarter, we closed two existing restaurants, one location in Cumberland, Georgia outside of Atlanta, and a restaurant in the Miami area. We are in the early stages of building a real estate and analytics tool which will allow us to create a psychographic profile of our top markets and use it to identify new markets for successful expansion going forward. We are not gonna open up any additional locations in our newer markets until we have this tool developed and tested which will be some time during 2020. With that, I'd like to turn the call over to our CFO, Jon Howie for a more detailed review of the fourth quarter results.

Jon Howie -- Vice President and Chief Financial Officer

Thanks, Steve. Revenues increased to $96.8 million for the fourth quarter ended December 30th, 2018 compared to $96 million in the same quarter last year, driven primarily by comparable restaurant sales growth and $9.2 million in incremental revenue from an additional 141 operating weeks. In total, we had approximately 1,297 operating weeks during the fourth quarter of 2018. These increases were partially offset by a $7.3 million decrease in revenue due to the extra operating week during the fourth quarter of 2017 and other non-comparable restaurants rolling over their honeymoon period. Turning to comparable restaurants though, as a reminder, there is a one-week calendar shift in the comparison of the fourth fiscal quarter of 2018 to last year's fourth quarter due to the inclusion of the 53rd week in fiscal 2017. On a fiscal basis, comparable restaurant sales increased 1.3% for the 13-week period ended December 30th, 2018 compared to the 13-week period ended December 24th, 2017.

There were 81 restaurants in our comparable base at the end of the fourth quarter of 2018. On a calendar basis which we believe is more reflective of the year-over-year change in the business, comparable restaurant sales increased .9% for the 13-week period ended December 30th, 2018 compared to the 13-week period ended December 31st, 2017. This increase was driven primarily by a 2.2% increase in average check, partially offset by a 1.3% decrease in average weekly customers. And we estimate the unfavorable weather conditions during the fourth quarter of 2018 negatively affected comparable restaurant sales and weekly average customers by approximately 40 basis points. Effective pricing during the quarter was approximately 1.5% to 2%. As most of you know, we have historically taken one price increase per year, which we just rolled over in late January.

We have replaced it with an increase of approximately 2.75% to 3%, marginally larger than our historical average but one we feel is prudent to help protect our margins in light of industrywide labor pressures. Now, turning to a discussion on selected expense line items, cost of sales as a percentage of revenue decreased 10 basis points to 26.3%, helped largely by favorable dairy pricing compared to 2017, partially offset by unfavorable pricing in beef and groceries. For 2019, we expect commodity inflation of approximately 1% to 2%. Labor cost as a percentage of revenue increased approximately 80 basis points to 37.2%. The increase was attributable to new store labor inefficiencies, hourly labor rate inflation in our comparable stores of approximately 3.5% and higher labor rates in some of our newer markets, offset by lower training costs for our new managers. Given the current trend in our labor inflation, we are expecting inflation during 2019 of 3.5% to 4%.

Restaurant operating cost as a percentage of revenue increased by 130 basis points to 14.9%. The increase was primarily due to a 100 basis point increase in insurance costs, primarily related to an hourly health plan adjustment in 2017 as well as higher repairs, maintenance, and utility costs and deleverage from the extra week in 2017. Occupancy costs as a percentage of revenue increased by 100 basis points to 8%. Approximately 50 basis points of this increase was the result of deleverage from the loss of the extra operating week as compared to 2017 with the balance largely driven by higher rental expense at certain newly opened restaurants as we continue to expand into new market and higher straight-line rent from extended lease terms at certain existing restaurants.

General administrative expenses increased to $5.2 million in the fourth quarter compared to $4.3 million in the same period last year, primarily driven by higher management compensation, in part due to additional headcount to supported growth and an increase in legal and professional fees. As a percentage of revenue, G&A increased 100 basis points year-over-year to 5.4%. In summary, net income for the fourth quarter of 2018 was $3.4 million or $0.20 per diluted share compared to $15.9 million or $0.93 per diluted share in the year-ago period. Adjusted net income for the fourth quarter of 2018 was $1.8 million or $0.11 per diluted share compared to $3.2 million or $0.19 per diluted share in the year-ago period. We estimate that the extra operating week during the fourth quarter of 2017 contributed approximately $0.07 per diluted share. This is partially offset by $0.01 per diluted share for the temporary closure related to Hurricane Harvey last year. We ended the quarter with $8.2 million of cash on the balance sheet.

And we currently have no debt. With that, we now will provide you with the following outlook for 2019. We currently expect 2019 diluted earnings per share of between $0.91 and $0.95 per share. This compares to our 2018 adjusted earnings per share of $0.88. Our guidance is based on the following updated assumptions. We expect comparable restaurant sales growth of 1.5% to 2.5%. Restaurant pre-opening expenses are expected to be approximately $2.1 to $2.9 million. We expect G&A expenses between $23.3 million and $23.8 million. We expect an effective tax rate of approximately 6% to 8%. We are modeling annual weighted average diluted shares outstanding to 17.1 million to 17.2 million shares exclusive of any share repurchases during the year. And we are planning to open between five and seven Chuy's restaurants this year. Lastly, our capital expenditures net of tenant improvement allowances are projected to be between $24.5 and $30.7 million. With that, I'll turn the call back over to Steve to wrap up.

Steve Hislop -- President and Chief Executive Officer

Thanks, Jon. The long-term profits of our business remain healthy. And we are especially excited with the initiatives we've put in place last year. With a marketing plan that is squarely aimed at driving both awareness and frequency, our Olo partnership and catering programs that provide another avenue of top-line growth, and solid development pipeline, we believe we've put all the building blocks in place to have positioned the company for a solid start in 2019. As always, none of this would have been possible without the tireless work and dedication of our employees in delivering the Chuy's experience to our guests every day. With that, we're happy to answer any questions. Thank you.

Questions and Answers:

Operator

Thank you. At this time, if you do have a question, that will be * 1. Again, * 1 for questions. We'll hear first today from Mary Hodas with Baird.

Mary Hodas -- Baird -- Analyst

Good afternoon. Thanks for taking the question. Just one quickly on the cost outlook. So, the guidance on the cost assumes better momentum than what you saw throughout most of 2018. So, would you be willing to comment on how you're tracking quarter to date relative to that guidance just to give us a sense of what it implies for the balance of the year?

Steve Hislop -- President and Chief Executive Officer

What I will tell you, Mary, is our traffic is definitely improving during the first two periods. And as you know, it's 1.5% down for the whole year and 1.3% down for the fourth quarter. So, we did see some nice improvement there in the fourth quarter. And we're continuing to see that in the first quarter. And as we said, we're taking a price increase of about 2.5% to 3%.

Mary Hodas -- Baird -- Analyst

Thank you. That's helpful. And then on the pricing, with that level above your normal targeted range, what factors are you looking at -- maybe your competition's pricing, etc. -- that make you feel comfortable that you'll be able to pass that through without impacting the traffic trajectory?

Steve Hislop -- President and Chief Executive Officer

Anybody that has followed us and looks at, pretty doggedly, have kept our last 10 years of pricing except for one year when we had the Obamacare. We're usually in that 1.5 to 1.75 range. And through that time, our competitors have done more than that. So, you've actually seen my value spread increase over the year quite substantially. And we have four pricing tiers, one through four. And we see a value spreads, really, more specifically in two, three, and four that's even a little wider that we're gonna continue to take a look at throughout the remainder of this year and as we move forward. But we feel our value spread has been there for a while.

Mary Hodas -- Baird -- Analyst

Great. Thank you for taking the questions.

Operator

We'll hear next from Nick Setyan with Wedbush Securities.

Nick Setyan -- Wedbush Securities -- Analyst

Hey. Thanks for taking the question. How do you feel about the staffing levels now? I know last year at some point, toward the second half, especially, it became a concern. I think you even cited it as potentially having had an adverse impact to sales. What are you seeing in terms of turnover, etc.?

Steve Hislop -- President and Chief Executive Officer

Yeah. That's a great question. I'll tell you. The last year and a half, the staffing levels have been really hard working. I'll tell you right now and starting, actually, in the beginning of the fourth quarter, we're better staffed now than we've been in the previous two years. So, we're very, very excited about that. That's really the internal rock that we worked on the hardest. I've mentioned all the initiatives that we had. But as far as our turtle-like approach to our business, it was really the staffing levels and making sure we're really working on flow-through through our restaurants which means you have to be fully staffed specifically in the front of the house. So, we're better staffed now than we've ever been. Over the last three quarters, we're basically right at the same turnover rate, roughly around 26% on management and roughly right around that 105-106 in the hourly rate. And that's where it's been all year.

Nick Setyan -- Wedbush Securities -- Analyst

Got it. Then you kind of talked about Olo and the percentage of the overall to-go. Can you guys update us on what the overall to-go percentage now is?

Steve Hislop -- President and Chief Executive Officer

Sure. For the fourth quarter, we actually for our comp store base was at a little over 14%. Total company was about 13%. We were up about 15.66% on the quarter. For the year, we finished right at the comp base as 12.75%. And for the total, it'd be 13.77%. And the increase for the year is up about 14.15%.

Nick Setyan -- Wedbush Securities -- Analyst

And just lastly, on the cadence of the openings for 2019?

Jon Howie -- Vice President and Chief Financial Officer

Yeah, Nick. This is Jon. Cadence are really they're all opening in the second and third quarter evenly.

Nick Setyan -- Wedbush Securities -- Analyst

Oh. So, all the stores are in the second and third quarters evenly?

Jon Howie -- Vice President and Chief Financial Officer

Yes.

Nick Setyan -- Wedbush Securities -- Analyst

Thank you.

Operator

And from Stephens, we'll go to Will Slabaugh.

Will Slabaugh -- Stephens -- Analyst

Yeah. Thanks, guys. Could you talk more about the closures of the two stores around Miami and then in Atlanta? This is a quicker trigger finger than you've had when dealing with slow-starts in Charlotte or Kansas City a few years back. So, I was wondering what the rationale was there versus making either personnel or other changes.

Steve Hislop -- President and Chief Executive Officer

Yeah. This is Steve, Will. Thanks for the questions. Yeah. Real quick is we have three stores down in the Miami area, two more in the neighborhood areas, and then one a little bit more near a mall and so forth. And it just started out slower than we've had right off the bat. And we didn't see it moving. There was no movement. And that's really why we actually went out and really partnered up with this eSite Analysis for analytics, specifically the psychographic information. But it was actually one of the lower stores that we've ever opened. And then we didn't see it moving real, real quick.

And that's very similar to the Cumberlands store which, again, is near a mall. Mall traffic was down pretty deeply. So, again, we have three stores in that market. Actually, four stores in that market. So, we decided to make the move now. The worst thing you can do -- we hate closing the stores, obviously. Always do. But at the end of the day, if you don't make the decision to move forward with us and get that off the board, you end up making bad decisions for all the other stores in the market and in the company. So, we decided to make that move quick.

Will Slabaugh -- Stephens -- Analyst

Understood. And just more broadly, I wondered if you could talk about some of your newer markets and just the latest on Chicago, and especially considering your comments around some marketing that sounds to be helping there, and then Miami, in general, Denver, and then D.C. as well.

Steve Hislop -- President and Chief Executive Officer

Yeah. Again, we're happy we're in all those markets. And we're continuing. Again, part of it is the awareness issues that we started with our test marketing specifically in the fourth quarter that we're gonna continue, as I mentioned earlier, through this year. In the markets, we believe, in Chicago and Miami, it's an awareness issue. And we're getting that out there rather quick. And we're gonna stay on top of that. And then with our Denver market, we're pleased. We'll be opening one more store up there this year and working real hard. So, we're pleased with that. And we're happy with the initial test that we did in the fourth quarter that will continue in the first quarter on our movement and the D.C. market. So, again, I think everything's moving forward for us.

Will Slabaugh -- Stephens -- Analyst

Great. And last one for me. I wonder if you could give us some updated thoughts on delivery. You mentioned to-go up 15.6% or so for you for the quarter, 14% of sales. So, making pretty big strides despite not much advertising. I know delivery's a piece of that. And you've mentioned at ICR the large number of providers that you use. Can you give us the update on what your thoughts are there and how we should think about delivery impacting your business for 2019?

Steve Hislop -- President and Chief Executive Officer

Well, with Olo, they do have a dispatch service which we're actually looking at. So, we're looking at different ways that we can decrease that percentage of delivery fees. But overall, our delivery is just under 2% of our total sales. And that's been consistent throughout the year. So, it's not growing as much. And our Olo is growing which is really takeout from the restaurant which we're liking better than the delivery.

Will Slabaugh -- Stephens -- Analyst

Got it. Thanks, guys.

Operator

And again, that is * 1 for questions. We'll hear now from Brian Vaccaro with Raymond James.

Brian Vaccaro -- Raymond James & Associates -- Analyst

Good evening and thank you. Just wanted to circle back for the quarter to date traffic comments, Jon. And it's encouraging to hear that the traffic's improved in P1 and P2. And I'm just curious what you attribute that improvement to. Do you believe you're seeing an underlying improvement tied to the business or a specific initiative? Or is easy comparison also something to consider as we're thinking about those quarter to date trends?

Jon Howie -- Vice President and Chief Financial Officer

I don't know if I caught all of you. You're garbling up on your phone. But I think you're trying to say what are they attributable to. I think some of the changes that we've been talking about. Definitely marketing and getting the staffing correct in the stores, like Steve said, starting in the fourth quarter. So, we've seen some great impact on that. And again, we had our pricing in the second period. So, with our projection of 1.5% to 2.5%, obviously, we're still projecting a little negative traffic for all of 2018. But what we are seeing is some favorable traffic trends from period to period which we're liking a lot.

Steve Hislop -- President and Chief Executive Officer

And that really started in period 12, Brian. This is Steve. If you guys remember, in period 10 and 11, we lost about $1.3 million in patio sales. So, we really saw the trend move up for us in period 12. And that's what's continued into the first two periods this year.

Brian Vaccaro -- Raymond James & Associates -- Analyst

Okay. Great. That's helpful. And shifting to the 2019 guidance, just wanted to ask about the G&A line, the step-up there implied in your guidance. Can you give us some perspective? How much of that is due to normalized bonuses versus, perhaps, some investments you're making in that line?

Jon Howie -- Vice President and Chief Financial Officer

Yeah. The normalized bonuses are well over $1 million, as, Brian, we've talked about before. Hopefully, we'll get to the target bonus this year. We've also made some investments on infrastructure, obviously. As we announced this last year, we've made a promotion to COO, obviously, and then replacing -- he was our food and beverage guy. So, we made a replacement in the food and beverage spot that he was in, at a director level, that will report to marketing going forward. And then a couple other strategic investments in IT. With all the IT projects we got in the integrations, we're getting a little higher-level IT guy to help with some of those integrations. And then just normal growth as well from a supervisory standpoint and others in here in the office.

Brian Vaccaro -- Raymond James & Associates -- Analyst

All right. That's helpful. I'll pass it along. Thank you.

Operator

We'll hear now from BMO Capital Markets, Andrew Strelzik.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Hi. Good afternoon. Thanks for taking the questions. My first one is on the comp. In terms of the outlook for continued traffic declines, I'm just wondering about the puts and takes and how you're thinking about it. Is it just because you haven't really flipped the switch to get back to positive? You sound pretty optimistic about the things that you're doing and some of the trends here in the near-term. The compares divvied easier. So, I guess I'm just wondering, do you feel like you just need to build over time? Are you feeling like you need to do more? Just thoughts around the negative traffic outlook.

Jon Howie -- Vice President and Chief Financial Officer

Well, again, we've had negative traffic for the last couple years. I don't think you wanna flip on the switch and say you're gonna be positive this year. So, we may make different changes in that forfeit cash going forward. But we wanna see some of that happen more in the current year. Also, there's been some discussion in the back half of the year about the economy and stuff from some of the analysts out there. So, we don't wanna be overly optimistic when we're talking about that. So, obviously, we've factored in some negative traffic going forward. Not as negative as last year, but we have factored some of that in.

Steve Hislop -- President and Chief Executive Officer

Yeah. And as Jon said, we're cautiously optimistic. Again, we're doing stuff that, obviously, we tested in the fourth quarter. We've just initially rolled it out now in the first. We think we need to ride this little brook a little bit further down the road before we put some hard numbers to it.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Okay. And my second question is just on labor. So, two different things. First, if you assume that the labor environment is more structural in nature, are you comfortable taking this level of pricing more than one year? Do you view the higher pricing as a one-time thing? And then secondarily, if the goal is to take a couple hundred basis points out of the labor percentage -- and I know you're doing a number of things this year to move that in the right direction -- can you chart the path to how you get there, how long it might take to get there, and your level of confidence that that's achievable?

Steve Hislop -- President and Chief Executive Officer

Yeah. At the end of the day, again, as I mentioned to you, our value spread over the years has actually increased. So, our value is really sitting on top of quick/casual for food. So, we felt very, very good with the level of service and everything we do in our competitive landscape, not only just in Mexican food but casual dining, in general, that we definitely had some room. And as I mentioned to you earlier, we're gonna be looking at the back half of the year, specifically by tier four, three, and possibly two stores to make sure those are in balance. But again, I think it's a gradual thing. I think it's over the next year to two as we're going forward that we're gonna continue this initiative. And this initiative's not gonna go away. We're gonna be looking at it pretty much -- because I don't see the labor inflation going away anytime soon. So, this is something that we'll continue to work on as we move forward.

Andrew Strelzik -- BMO Capital Markets -- Analyst

Great. Thank you very much.

Operator

And for questions, that is * 1 at this time. We'll move on to Chris O'Cull with Stifel.

Christopher O'Cull -- Stifel, Nicolaus & Co.

Thanks. Hey, guys. Steve, could you talk a little bit about the price increase, maybe where it was focused, certain sections of the menu or beverages? Or was it across geographies, etc.?

Steve Hislop -- President and Chief Executive Officer

Chris, as condensed and as you look at our menu, we really don't have a barbell approach to our menu. It's right in that $8.50 to really $14 range. So, we look at that. We actually touched a few things. But it's pretty much across the board. We've had a little bit less in the alcohol area compared to the food area. And that was on purpose. But it was pretty much across the board a little bit. And so, you're talking about $0.20 to $0.30 throughout the menu.

Christopher O'Cull -- Stifel, Nicolaus & Co.

Okay. And then Jon, how will the closure of the two stores impact the margin you think this year?

Jon Howie -- Vice President and Chief Financial Officer

It should be positive, for sure.

Christopher O'Cull -- Stifel, Nicolaus & Co.

Will it be material?

Jon Howie -- Vice President and Chief Financial Officer

No. It won't be material because you're talking two lower-performing stores on the complete base. In fact, I didn't even really calculate that because I didn't think it would be -- obviously, we'll have closure costs. But from a margin standpoint, I don't think it's gonna have a significant impact.

Christopher O'Cull -- Stifel, Nicolaus & Co.

Okay. And then just the occupancy costs have been growing at a much faster rate than unit counts. Any expectation for what the rate of growth could be for occupancy in 2019?

Jon Howie -- Vice President and Chief Financial Officer

Yeah. On a margin base -- and I'm sure that's what you're looking at, right?

Christopher O'Cull -- Stifel, Nicolaus & Co.

Yes.

Jon Howie -- Vice President and Chief Financial Officer

Yeah. So, we're looking at occupancy really only increasing 10 or 20 basis points this next year.

Christopher O'Cull -- Stifel, Nicolaus & Co.

Okay. Great. Thanks, guys.

Jon Howie -- Vice President and Chief Financial Officer

If you remember, we lost a lot because of the extra week.

Operator:

We'll go now to Bob Derrington with Telsey Advisory.

Robert Derrington -- Telsey Advisory Group -- Analyst

Yeah. Thank you. Jon, if we could -- just to extend Chris' question around the margins, if we -- the fourth quarter here, obviously, was a difficult quarter in which it looks like your store-level margin was down about 300 basis points. There was a lot of moving pieces, as we look at the 2019 plan, a combination of higher menu pricing, wage rate inflation, etc. How do you think broadly about the restaurant level margin as we look compared to last year, compared to 2018?

Jon Howie -- Vice President and Chief Financial Officer

As far as the forecast going forward?

Robert Derrington -- Telsey Advisory Group -- Analyst

Yeah. Go ahead.

Jon Howie -- Vice President and Chief Financial Officer

Yeah. So, we're looking at -- if we can get -- Bob, if we can get the price increase and get the positive traffic and get the comp somewhere between that 2.5% to 3%, I think we could see the store level margins flatten out and maybe even have a little leverage there. So, that's the way we're looking at it. Currently, with the comps that we have and the forecast, 1.5% to 2%, I don't think we get there. But optimistically, if we can get those higher comps, I think we can keep them flat, grow them a little bit.

Robert Derrington -- Telsey Advisory Group -- Analyst

And Steve, if you could give us -- or Steve or Jon, whoever -- a little bit of thought around your share repurchase activity -- you hadn't bought much in a while. What's your perspective on where the share price is, the cash you have available, the capex plan as far as buyback goes in 2019?

Jon Howie -- Vice President and Chief Financial Officer

Yeah. Given the slower growth in the next year, we've really targeted some of our capex to remodels in the current year to the tune of about close to $3 or $4 million that we're doing in remodels. But still, we should have close to $10 million that we can use to buy back stock. However, with that being said, we're limited to three weeks after we release to when we can buy back. So, during those periods of time, we'll try to be as aggressive as possible. But again, we don't want to go into our revolver to buy back that stock.

Robert Derrington -- Telsey Advisory Group -- Analyst

Gotcha. Okay. Terrific. Thank you.

Operator

And at this time, I'd like to turn things back to management for any closing remarks.

Steve Hislop -- President and Chief Executive Officer

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.

Operator

Again, that will conclude today's conference. Thank you all for joining us.
Duration: 37 minutes

Call participants:

Jon Howie -- Vice President and Chief Financial Officer

Steve Hislop -- President and Chief Executive Officer

Mary Hodas -- Baird -- Analyst

Nick Setyan -- Wedbush Securities -- Analyst

Will Slabaugh -- Stephens -- Analyst

Brian Vaccaro -- Raymond James & Associates -- Analyst

Andrew Strelzik -- BMO Capital Markets -- Analyst

Christopher O'Cull -- Stifel, Nicolaus & Co.

Robert Derrington -- Telsey Advisory Group -- Analyst

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