BJ's (NASDAQ:BJRI) Misses Q4 Revenue Estimates
American restaurant chain BJ’s Restaurants (NASDAQ:BJRI) missed analysts' expectations in Q4 FY2023, with revenue down 6% year on year to $323.6 million. It made a GAAP profit of $0.34 per share, improving from its profit of $0.07 per share in the same quarter last year.
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BJ's (BJRI) Q4 FY2023 Highlights:
Revenue: $323.6 million vs analyst estimates of $329.4 million (1.7% miss)
EPS: $0.34 vs analyst estimates of $0.27 (24.6% beat)
Gross Margin (GAAP): 14.4%, up from 12.9% in the same quarter last year
Same-Store Sales were up 0.6% year on year
Market Capitalization: $806.8 million
“BJ’s solid fourth quarter results demonstrate the operational excellence being delivered in our restaurants and the significant progress we are making with productivity and margin enhancement initiatives,” commented Greg Levin, Chief Executive Officer and President.
Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
Sit-Down Dining
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
Sales Growth
BJ's is larger than most restaurant chains and benefits from economies of scale, giving it an edge over its smaller competitors.
As you can see below, the company's annualized revenue growth rate of 3.5% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.
This quarter, BJ's missed Wall Street's estimates and reported a rather uninspiring 6% year-on-year revenue decline, generating $323.6 million in revenue. Looking ahead, Wall Street expects sales to grow 4.9% over the next 12 months, an acceleration from this quarter.
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Same-Store Sales
BJ's demand has outpaced the broader restaurant sector over the last eight quarters. On average, the company has grown its same-store sales by a robust 9.5% year on year. With positive same-store sales growth amid an increasing number of restaurants, BJ's is reaching more diners and growing sales.
In the latest quarter, BJ's year on year same-store sales were flat. By the company's standards, this growth was a meaningful deceleration from the 6.6% year-on-year increase it posted 12 months ago. We'll be watching BJ's closely to see if it can reaccelerate growth.
Key Takeaways from BJ's Q4 Results
It was good to see BJ's beat analysts' EPS expectations this quarter. We were also happy its gross margin narrowly outperformed Wall Street's estimates. On the other hand, its revenue unfortunately missed thanks to lower-than-expected same-store sales growth (0.6% vs estimates of 2.0%). Looking ahead, the company's capex guidance for 2024 came in favorably ($70 million vs estimates of $94 million) as it seeks to execute on the narrative told during its November 2023 Investor Day. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track. The stock is flat after reporting and currently trades at $35.47 per share.
So should you invest in BJ's right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
