BJ’s Restaurants, Inc.
BJRI
reported mixed second-quarter fiscal 2022 (ended Jun 28, 2022) results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined year over year.
Following the results, the company’s shares dropped 5.3% during the after-hours trading session on Jul 21. Negative investor sentiments were witnessed as the company cited concerns about the heightened inflationary environment and its potential impact on restaurant margins.
Earnings & Revenues
In the quarter under review, the company reported adjusted earnings per share (EPS) of 10 cents missing the Zacks Consensus Estimate of 23 cents. In the prior-year quarter, the company reported an adjusted EPS of 26 cents per share.
BJ’s Restaurants, Inc. Price, Consensus and EPS Surprise
BJ’s Restaurants, Inc. price-consensus-eps-surprise-chart
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BJ’s Restaurants, Inc. Quote
Total revenues of $329.7 million beat the Zacks Consensus Estimate of $328 million by 0.5%. The top line increased 13.6% on a year-over-year basis.
Comparable restaurant sales in the fiscal second quarter increased 11.7% year over year compared with a growth of 121.9% reported in the prior-year quarter. Also, it increased 4.8% from 2019 levels. The company stated that the positive momentum continued into the fiscal third quarter, with period-to-date comps growth (through Jul 21) reported at 4% from 2019 levels.
Expenses & Operating Margins
For the fiscal second quarter, labor costs — as a percentage of sales — came in at 37.3%, up 140 basis points (bps) year over year. Occupancy and operating costs (as a percentage of sales) came in at 23.2%, down from 23.3% reported in the year-ago quarter. General and administrative expenses (as a percentage of sales) fell 80 bps year over year to 5.1% in the quarter.
During the quarter, restaurant-level operating margin came in at 11.9% compared with 14.8% reported in the year-ago quarter.
Store Count
As of Jun 28, 2022, BJ’s Restaurants owned and operated 214 casual dining restaurants (in 29 states). During the quarter, the company opened a new restaurant in San Antonio, TX. It also opened a new restaurant in Framingham, Massachusetts. The company reported solid opening performances. The company plans to open five new restaurants in the second half of the year.
The company made solid progress with respect to its two pilot remodels concerning dining room capacity expansion and new design elements. With positive customer feedback and increased sales levels generated from the remodeled locations, the company remains optimistic and expects to proceed with this initiative in the upcoming periods.
Balance Sheet
As of Jun 28, 2022, cash and cash equivalents totaled $37.8 million compared with $27.2 million on Mar 29, 2022. Total debt as of Jun 28, 2022, amounted to $50 million, in line with the previous quarter’s estimates.
Zacks Rank & Key Picks
BJ’s Restaurants has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks
Retail-Wholesale
sector are
Dollar Tree Inc.
DLTR
,
Designer Brands Inc.
DBI
and
Potbelly Corporation
PBPB
.
Dollar Tree sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 13.1%, on average. Shares of the company have gained 71.4% in the past year. You can see
the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the year-ago period’s levels.
Designer Brands sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 102.5%, on average. Shares of the company have increased 1.3% in the past year.
The Zacks Consensus Estimate for Designer Brands’ 2023 sales and EPS suggests growth of 6.9% and 16.5%, respectively, from the year-ago period’s levels.
Potbelly carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of the company have declined 20.2% in the past year.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.6% and 94.2%, respectively, from the year-ago period’s levels.
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