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BJ's Restaurants (BJRI) Q3 Earnings & Revenues Top Estimates

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BJ’s Restaurants, Inc.’s (BJRI - Free Report) reported impressive third-quarter 2018 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. With this, the top line exceeded the consensus mark for four straight quarters, while the bottom line outpaced the same for five consecutive quarters.

Following the quarterly results, shares of BJ's Restaurants increased nearly 4% in after-hours trading. The stock has soared 100.9% in a year’s time, outperforming the industry’s 8.7% growth.

Adjusted earnings of 39 cents surpassed the Zacks Consensus Estimate of 23 cents by 69.6%. Backed by improved comps and restaurant operating margins, the bottom line surged 160% on a year-over-year basis. Total quarterly revenues came in at $270.3 million, which trumped the consensus estimate of $263 million by 2.8%. The top line also grew 9.4% year over year driven by increased guest traffic and comps.

Comparable restaurant sales in the quarter increased 6.9%, which marks the highest growth in the last 29 quarters. The uptick was driven by a 2.6% increase in guest traffic and rise in average check. Notably, comps growth compared favorably with a 5.6% increase in the second quarter of 2018 and a 1.7% decrease in the year-ago quarter. The company said that robust sales building efforts and marketing efficiency will continue to drive comps in the fourth quarter.

Expenses & Operating Margins

Labor costs, as a percentage of sales, decreased 20 basis points (bps) to 36.7% in the third quarter, while occupancy and operating costs were 22.6%, up 20 bps year over year.

Restaurant-level operating margin was 15.4%, up 120 bps from the year-ago quarter number. In order to counter high costs prevalent in the industry, the company is undertaking various cost-saving and efficiency initiatives to drive margins.

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

Balance Sheet

As of Oct 2, 2018, cash and cash equivalents totaled $25.6 million compared with $24.3 million on Jan 2, 2018.

Total debt declined to $95 million at the end of quarter from $163.5 million as of 2017 end.

BJ's Restaurants raised the quarterly cash dividend by 9.1% to 12 cents, payable Nov 26, 2018 to its shareholders of record at the close of business on Nov 12, 2018

Zacks Rank & Key Picks

Currently, BJ’s Restaurants has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Dunkin' Brands Group, Inc. , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dunkin' Brands Group has an impressive long-term earnings growth rate of 12.4%.

Dave & Buster's Entertainment delivered positive earnings surprise in each of the trailing four quarters, the average being 13.7%.

Darden Restaurants reported better-than-expected earnings over the preceding four quarters, the average being 5.1%.

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