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BJ's Restaurants Q3 Earnings Miss Estimates, Stock Falls

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BJ's Restaurants, Inc. (BJRI - Free Report) reported third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and bottom lines increased on a year-over-year basis.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Following the results, the company shares fell 5% during the post-market trading session on Oct. 31. Negative investor sentiments were witnessed as the company reported that it had not fully leveraged its traffic growth due to higher-than-anticipated restaurant costs. Consequently, its restaurant-level operating margin (in percentage terms) declined from the prior year's quarter levels.

BJRI’s Q3 Earnings & Revenues

In the quarter under review, the company reported an adjusted loss per share of 13 cents, missing the Zacks Consensus Estimate of earnings of 3 cents. In the year-ago quarter, it recorded an adjusted loss per share of 16 cents.

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

Total revenues of $325.7 million beat the consensus mark by 0.04%. The top line inched up 2.2% year over year. The upside was backed by strong guest traffic and Pizookie Meal Deal performance.

Comparable restaurant sales increased 1.7% year over year compared with a 0.4% rise reported in the prior-year quarter. Our model predicted the metric to increase by 1.9% from the year-ago levels.

Expenses & Operating Margins

During the quarter under review, labor costs — as a percentage of sales — were 37.1%, flat year over year. Our estimate was 36.7%.

Occupancy and operating costs (as a percentage of sales) were 24.7% compared with 25.1% reported in the year-ago quarter. We estimated the metric to be 24.7%.

General and administrative expenses (as a percentage of sales) of 6.4% increased by 30 bps on a year-over-year basis. Our prediction was 6.2%.

Restaurant-level operating margin was 11.7%, compared with 11.9% reported in the year-earlier quarter. We estimated the metric to be 12.5%.

Balance Sheet

As of Oct. 1, 2024, cash and cash equivalents totaled $18.4 million, compared with $29.1 million as of fiscal 2023 end. Total debt amounted to $66.5 million compared with $68 million in fiscal 2023 end.

BJRI’s Zacks Rank & Key Picks

BJ's Restaurants currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector include Chipotle Mexican Grill, Inc. (CMG - Free Report) , Shake Shack Inc. (SHAK - Free Report) and Yum China Holdings, Inc. (YUMC - Free Report) , each carrying a  Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chipotle has a trailing four-quarter earnings surprise of 9.8%, on average. The stock has gained 37% in the past year. The Zacks Consensus Estimate for CMG’s 2024 sales and earnings per share (EPS) indicate 14.9% and 22.2% growth, respectively, from the year-earlier actuals.

Shake Shack has a trailing four-quarter earnings surprise of 18.3%, on average. SHAK’s shares have risen 115.4% in the past year. The Zacks Consensus Estimate for SHAK’s 2024 sales and EPS indicate 14.1% and 100% growth, respectively, from the year-earlier actuals.

Yum China has a trailing four-quarter earnings surprise of 26.6%, on average. YUMC’s shares have risen 4% so far this year. The Zacks Consensus Estimate for YUMC’s 2024 sales and EPS indicate 4.5% and 11.5% growth, respectively, from the prior-year figures.

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