Almost everyone has a nostalgic restaurant they attended as a college student, and every time they set foot in that establishment, a fountain of memorable moments flashes before their eyes.
For some people who went to college in the South, Chuy's became the go-to place to catch up with friends.
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Established in 1982 in Austin, TX, Chuy's is a beloved family restaurant that combines Mexican flavors with Texas ingredients to create fusion cuisine called Tex-Mex. The chain currently has 101 restaurants in 15 southern states.
Although it's not a Michelin-starred restaurant, it could almost be one for a college student because it was once the most desirable place to go in, with wait times of several hours.
Chuy's became a staple because it has everything a college student would want: a great atmosphere, affordable food with a wide range of options, and cheap but great drinks.
As nostalgic as Chuy's may be for its southern customers who have been ordering the restaurant's iconic Chuychanga's accompanied by its famous 'Ritas for decades, the sad truth is that Chuy's has been struggling to hit major goals in multiple sectors of its business over the years. last years. quarters.
According to Chuy latest reported earningsRevenue decreased 0.5%, and comparable restaurant sales fell 3.1% compared to last year, which was primarily due to a 5.6% decrease in average weekly customers.
Because of Chuy (CHUY) In continued decline, the restaurant chain has had to consider other ways to keep its business alive for future generations to enjoy.
Darden becomes the eligible candidate Chuy needs
Darden Restaurants (DRI) is a prominent player in the restaurant industry, with a portfolio consisting of multiple renowned family restaurants, such as Olive Garden, LongHorn Steakhouse, Yard House, Ruth's Chris Steak House, Cheddar's Scratch Kitchen, The Capital Grille, Seasons 52, Eddie V's and Bahamas Breeze.
According to Darden's first quarter earnings report By 2025, total sales increased 1% to $2.8 billion compared to the previous year.
However, the current economic climate has also affected the company, which reported a decrease in restaurant comparable sales of 1.1% compared to last year and an EPS drop of 1.7% to $1.75 .
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But despite some declining numbers, Darden shares are up more than 19% from a year ago.
“While we did not meet our expectations for the first quarter, I firmly believe in the strength of our business. I am confident in the actions that all of our brand teams are taking to address the needs of their guests, which do not compromise the long term. health of our business for near-term benefits,” Darden Chairman and CEO Rick Cardenas said in the earnings report.
Darden's impressive portfolio and strong financials led both companies to reach a merger agreement in July to save Chuy's from becoming another restaurant gone too soon.
Darden announces acquisition of Chuy's
On Friday, Darden restaurants announced had officially acquired beloved Mexican restaurant Chuy's after the proposed purchase was approved Thursday.
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The restaurant was acquired in a cash transaction of about $605 million, approved by the majority of Chuy's shareholders.
As noted in Darden's press release, the transaction will be funded using a portion of the proceeds from an offering of $400 million of 4.350% senior notes due 2027 and an offering of $350 million of senior notes. at 4.550% maturing in 2029, which were issued in October. 2024.
“We are excited about the opportunity to join the Darden family and its portfolio of highly respected brands,” said Chuy President and CEO Steven Hislop. “Together, we will accelerate our business goals and bring our authentic, made-from-scratch Tex-Mex to more guests and communities,” added Hislop.
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