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BJ's Restaurants (BJRI) Up 20% in 6 Months: More Room to Run?
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Shares of BJ's Restaurants, Inc. (BJRI - Free Report) have gained 20.2% in the past six months against the industry’s 5.5% fall. The company’s strategic initiatives that focus on culinary excellence, hospitality, operational efficiency and contemporary remodels have established a strong foundation for future growth.
The company remains steadfast in upholding operational standards while delivering strong returns on investments in new restaurant ventures. BJRI anticipates enhancing shareholders’ value further through ongoing margin expansion initiatives, leveraging sales growth and continuous productivity and cost-saving endeavors.
An upward revision in earnings estimates for 2024 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved from $1.33 to $1.36.
Image Source: Zacks Investment Research
Factors Driving Growth
BJRI emphasizes its ‘familiar-made brewhouse fabulous’ culinary initiative to drive growth. The strategy focuses on delivering high-quality, familiar dishes with a unique twist, which helped drive sales and improve guest satisfaction. BJ's hospitality initiatives aim to enhance the overall dining experience through improved server scripting and a balanced service model. These changes have resulted in faster service times and better social sentiment scores.
The company continues to invest in remodeling its existing restaurants to create a welcoming, contemporary ambiance. In 2024, the company plans to complete 23 remodels, with half of its restaurants either recently remodeled or built as newer prototypes. BJRI is expanding its footprint with new restaurant openings, including its first location in Wisconsin, showcasing promising results. In the future, BJRI plans to introduce a new prototype that reduces construction costs by about $1 million per unit. The prototype integrates insights gleaned from recent remodels to enhance operational efficiency and appeal to customers.
BJRI’s long-term strategy includes driving top-line sales growth of 8-10% through a combination of new unit growth and low- to mid-single-digit comparable restaurant sales increases. The company plans to open additional restaurants with a new prototype design that reduces build-out costs and enhances operational efficiencies.
The company has implemented several productivity and cost-saving initiatives that have positively impacted restaurant-level margins. By leveraging AI-based sales forecasting tools and optimizing labor models, BJRI has been able to drive significant efficiencies. During the first quarter, restaurant-level cash flow margins came in at 15%, reflecting an increase of 240 basis points from the previous year’s tally.
The company expects restaurant-level margins to continue expanding throughout 2024, aiming to close the gap to pre-pandemic levels by the year-end. Key initiatives, including labor model refinement, enhancing the guest experience and executing cost-saving measures across various operational areas, are likely to add to the positives.
Some other top-ranked stocks in the Retail-Wholesale sector include:
Shake Shack Inc. (SHAK - Free Report) sports a Zacks Rank #1. SHAK has a trailing four-quarter earnings surprise of 73%, on average. Shares of SHAK have gained 9.5% in the past year.
The Zacks Consensus Estimate for SHAK’s 2024 sales and EPS indicates a rise of 14.8% and 102.7%, respectively, from the year-ago period’s levels.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) sports a Zacks Rank #1. LOCO has a trailing four-quarter earnings surprise of 19.4%, on average. The stock has moved up 15.7% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS suggests growth of 3.8% and 9.9%, respectively, from the year-ago period’s levels.
Brinker International, Inc. (EAT - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 70.5% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5.3% and 43.1% growth, respectively, from year-earlier actuals.
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BJ's Restaurants (BJRI) Up 20% in 6 Months: More Room to Run?
Shares of BJ's Restaurants, Inc. (BJRI - Free Report) have gained 20.2% in the past six months against the industry’s 5.5% fall. The company’s strategic initiatives that focus on culinary excellence, hospitality, operational efficiency and contemporary remodels have established a strong foundation for future growth.
The company remains steadfast in upholding operational standards while delivering strong returns on investments in new restaurant ventures. BJRI anticipates enhancing shareholders’ value further through ongoing margin expansion initiatives, leveraging sales growth and continuous productivity and cost-saving endeavors.
An upward revision in earnings estimates for 2024 reflects analysts’ optimism regarding the company’s growth potential. In the past 60 days, the Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved from $1.33 to $1.36.
Image Source: Zacks Investment Research
Factors Driving Growth
BJRI emphasizes its ‘familiar-made brewhouse fabulous’ culinary initiative to drive growth. The strategy focuses on delivering high-quality, familiar dishes with a unique twist, which helped drive sales and improve guest satisfaction. BJ's hospitality initiatives aim to enhance the overall dining experience through improved server scripting and a balanced service model. These changes have resulted in faster service times and better social sentiment scores.
The company continues to invest in remodeling its existing restaurants to create a welcoming, contemporary ambiance. In 2024, the company plans to complete 23 remodels, with half of its restaurants either recently remodeled or built as newer prototypes. BJRI is expanding its footprint with new restaurant openings, including its first location in Wisconsin, showcasing promising results. In the future, BJRI plans to introduce a new prototype that reduces construction costs by about $1 million per unit. The prototype integrates insights gleaned from recent remodels to enhance operational efficiency and appeal to customers.
BJRI’s long-term strategy includes driving top-line sales growth of 8-10% through a combination of new unit growth and low- to mid-single-digit comparable restaurant sales increases. The company plans to open additional restaurants with a new prototype design that reduces build-out costs and enhances operational efficiencies.
The company has implemented several productivity and cost-saving initiatives that have positively impacted restaurant-level margins. By leveraging AI-based sales forecasting tools and optimizing labor models, BJRI has been able to drive significant efficiencies. During the first quarter, restaurant-level cash flow margins came in at 15%, reflecting an increase of 240 basis points from the previous year’s tally.
The company expects restaurant-level margins to continue expanding throughout 2024, aiming to close the gap to pre-pandemic levels by the year-end. Key initiatives, including labor model refinement, enhancing the guest experience and executing cost-saving measures across various operational areas, are likely to add to the positives.
Zacks Rank & Other Key Picks
BJ's Restaurants currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Some other top-ranked stocks in the Retail-Wholesale sector include:
Shake Shack Inc. (SHAK - Free Report) sports a Zacks Rank #1. SHAK has a trailing four-quarter earnings surprise of 73%, on average. Shares of SHAK have gained 9.5% in the past year.
The Zacks Consensus Estimate for SHAK’s 2024 sales and EPS indicates a rise of 14.8% and 102.7%, respectively, from the year-ago period’s levels.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) sports a Zacks Rank #1. LOCO has a trailing four-quarter earnings surprise of 19.4%, on average. The stock has moved up 15.7% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS suggests growth of 3.8% and 9.9%, respectively, from the year-ago period’s levels.
Brinker International, Inc. (EAT - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 70.5% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5.3% and 43.1% growth, respectively, from year-earlier actuals.