Many individuals have fond memories of a favorite restaurant from their college days, often evoking a sense of nostalgia with every visit. In the southern United States, Chuy’s has become a favored spot for college students to gather with friends.
Established in 1982 in Austin, Texas, Chuy’s is a well-loved family restaurant known for its Tex-Mex cuisine, which combines Mexican flavors with Texas ingredients. Currently, the chain operates 101 locations across 15 southern states. While not a Michelin-star establishment, Chuy’s was highly sought after by college students due to its lively environment, diverse menu options, and affordable food and drinks.
Despite its popularity, Chuy’s has been facing challenges in recent quarters, struggling to meet key business targets. The company’s most recent earnings report indicated a 0.5% decrease in revenues, with comparable restaurant sales down 3.1% from the previous year. This decline was largely due to a 5.6% reduction in average weekly customers.
In response to these ongoing difficulties, Chuy’s has explored new strategies to sustain its business for future generations. Darden Restaurants, a major player in the restaurant industry with a portfolio including Olive Garden, LongHorn Steakhouse, and other well-known brands, emerged as a suitable partner with strong financials and industry experience. Darden reported a 1% increase in total sales, reaching $2.8 billion for the first quarter of fiscal year 2025, despite an economic climate that led to a slight decline in same-restaurant sales and earnings per share.
Darden and Chuy’s reached a merger agreement in July to prevent Chuy’s from following the fate of other struggling restaurants. On Friday, Darden announced the completion of Chuy’s acquisition, having received approval from the majority of Chuy’s stockholders the previous day. The acquisition, valued at approximately $605 million, was conducted through an all-cash transaction, financed by the proceeds from senior notes due in 2027 and 2029.
Chuy’s Chairman, President, and CEO, Steven Hislop, expressed enthusiasm about joining Darden’s esteemed portfolio of brands. By partnering with Darden, Chuy’s aims to accelerate its business objectives and expand its authentic, made-from-scratch Tex-Mex offerings to more communities.