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BJ's Restaurants' (BJRI) Q2 Earnings Top Estimates, Stock Up

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BJ's Restaurants, Inc. (BJRI - Free Report) reported second-quarter fiscal 2023 (ended Jul 4, 2023) results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Following the announcement, shares of the company moved up 8% during the after-hours trading session on Jul 27.

Earnings & Revenues

In the quarter under review, the company reported adjusted earnings per share (EPS) of 50 cents, surpassing the Zacks Consensus Estimate of 32 cents. In the prior-year quarter, the company reported an adjusted EPS of 10 cents.

Total revenues of $349.7 million missed the Zacks Consensus Estimate of $350 million. The top line increased 6.1% on a year-over-year basis.

BJ's Restaurants, Inc. Price, Consensus and EPS Surprise

 

BJ's Restaurants, Inc. Price, Consensus and EPS Surprise

BJ's Restaurants, Inc. price-consensus-eps-surprise-chart | BJ's Restaurants, Inc. Quote

 

Comparable restaurant sales in the fiscal first quarter increased 4.7% year over year compared with a rise of 11.7% reported in the prior-year quarter. Our estimate for the metric was 4.2%. The upside was primarily backed by growth in the dining room guest traffic and menu pricing initiatives.

Expenses & Operating Margins

During the fiscal second quarter, labor costs — as a percentage of sales — came in at 36.2%, down 110 basis points (bps) year over year. Our estimate for the metric was 37%.

Occupancy and operating costs (as a percentage of sales) came in at 23.4% compared with 23.2% reported in the year-ago quarter. Our estimate for the metric was 22.6%.

General and administrative expenses (as a percentage of sales) came in at 6.1% in the quarter compared with 5.1% reported in the prior-year quarter. Our estimate for the metric was 5.6%.

During the quarter, restaurant-level operating margin came in at 14.5% compared with 11.9% reported in the year-ago quarter. The upside was driven by comps growth, improving operational execution and cost-savings initiatives. Our estimate for restaurant-level operating margin was 15.5%.

Store Count

As of Jul 4, 2023, BJ’s Restaurants owned and operated 216 casual dining restaurants (in 30 states). Year to date, the company has opened two new restaurants (in Orland Park, Illinois and San Antonio, TX) and reported solid sales with respect to the same. The company expects to open three new restaurants in fiscal 2023. It also emphasized on expanding its remodel initiative to 35-40 restaurants. The company is steadfast in its commitment to expand its presence to at least 425 restaurants domestically.

Balance Sheet

As of Jul 4, 2023, cash and cash equivalents totaled $6.1 million compared with $29.3 million as of Apr 4, 2023. Total debt as of Jul 4, 2023, amounted to $53 million compared with $60 million reported in the previous quarter.

Zacks Rank & Other Key Picks

BJ's Restaurants currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the Zacks Retail – Restaurants industry include:

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1 (Strong Buy). PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 20.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS indicates a rise of 17% and 29%, respectively, from the year-ago period’s levels.

Domino's Pizza, Inc. (DPZ - Free Report) sports a Zacks Rank #1. DPZ has a long-term earnings growth rate of 13%. The stock has rallied 3.3% in the past year.

The Zacks Consensus Estimate for Domino's 2024 sales and EPS suggests growth of 6.2% and 14.4%, respectively, from the year-ago period’s levels.

Chuy's Holdings, Inc. carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 84.2% in the past year.

The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27.7%, respectively, from the year-ago period’s levels.


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