Casual dining restaurant chain, BJ's Restaurants, Inc. (BJRI) recently opened its 17th restaurant in Frederick, Md., thus accomplishing its targeted restaurant openings. The restaurant, opened under the company’s popular brand name BJ's Restaurant & Brewhouse, is spread over an area of 8,500 square feet.
The restaurant, located on a free standing pad at the Francis Scott Key regional mall, can accommodate 280 guests and serves the popular BJ's menu of pizzas, beers, appetizers, entrees, pastas, sandwiches, salads, and desserts.
Currently, the company operates a total of 146 casual dining restaurants under its various popular brands. Out of 146, 64 are in California, 29 in Texas, 15 in Florida, 6 in Arizona, 5 each in Colorado and Nevada, 4 each in Washington and Ohio, 3 each in Oklahoma and Oregon, 2 in Kentucky and 1 each in Indiana, Kansas, Louisiana, Maryland, New Mexico and Virginia.
Among the casual dining chains, BJ’s Restaurants is one of the few that have been expanding in an uncertain economy. With the resurgence of consumer confidence, management accelerated its unit openings. Last week, the company opened its 16th restaurant in Mission Valley, Calif. under its brand BJ's Restaurant & Brewhouse.
Over the long run, there still exists the possibility of opening at least 425 outlets in the U.S. The company intends to continue opening new restaurants in 2014 and beyond.
While BJ's Restaurants continues to expand, we expect increased pre-opening expenses and stiff competition to act as headwinds in the new markets. The company is facing greater competitive pressure as the gradual recovery of the economy has resulted in several restaurant openings. Additionally, a higher sales tax, state income tax and gasoline prices limit discretionary spending.
The company presently has a short-term Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the restaurant industry include Buffalo Wild Wings Inc. (BWLD), Burger King Worldwide, Inc. (BKW) and Cracker Barrel Old Country Store, Inc. (CBRL). While Buffalo Wild Wings Inc. carries a Zacks Rank #1 (Strong Buy), Burger King Worldwide and Cracker Barrel hold a Zacks Rank #2 (Buy).