BJ's Restaurants (BJRI) Boosts Presence in MI With A Restaurant
BJ's Restaurants, Inc. BJRI recently announced the opening of its restaurant in Grand Rapids, MI. This marks the company’s fifth restaurant in the state. Also, it announced the opening of the new BJ’s Restaurant & Brewhouse at CenterPoint.
The restaurant covers 7,500 square feet and seats approximately 250 guests. It also features BJ’s extensive menu, including BJ’s signature deep-dish pizza, handcrafted beer and Pizookie dessert.
Management is optimistic about the new restaurant opening and anticipates the expansion momentum to continue in fiscal 2024.
More Focus on Expansion
The company’s focus on expansion efforts bodes well. Year to date (through Sep 5, 2023), the company opened restaurants in Orland Park (IL), San Antonio (TX), Rochester (NY) and Chandler (AZ). It reported positive customer feedback with respect to the same.
During the fiscal second quarter 2023, the company initiated designing a new prototype that takes the best features of the current restaurant lot and reduces the cost of build by about $1 million. It also emphasizes expanding its remodel initiative to about 35-40 restaurants in fiscal 2023, of which more than 20 remodels have been completed.
The company remains steadfast in its commitment to expand its presence to at least 425 restaurants domestically.
Price Performance
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Shares of BJ's Restaurants have declined 12.4% so far this year compared with the industry’s 2.7% fall. Increased operating costs and labor inflation mainly caused the downside.
During the second quarter of fiscal 2023, occupancy and operating costs came in at $81.9 million, compared with $76.6 million reported in the prior-year quarter. Increased rent, restaurant facilities expenses and marketing expenditures drove the uptick. Also, the labor and benefits costs increased 2.8% to $126.5 million, year over year, mainly due to higher labor management costs and increased taxes and benefits.
The company stated concerns about a challenging inflationary environment in 2023. For fiscal 2023, the company anticipates labor inflation in the mid-single-digit. Earnings estimates for fiscal 2023 have declined in the past 30 days, depicting analysts’ concern regarding the stock’s growth potential.
Zacks Rank & Key Restaurant Picks
BJ's Restaurants currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
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The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19.2% and 13%, respectively, from the year-ago period’s levels.
El Pollo Loco Holdings, Inc. LOCO currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 23.7%, on average. Shares of LOCO have dropped 4.6% in the past year.
The Zacks Consensus Estimate for LOCO’s 2024 sales and EPS indicates a 3.5% and an 18.3% growth, respectively, from the year-ago period’s levels.
Yum! Brands, Inc. YUM carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 2%, on average. Shares of YUM have gained 10% in the past year.
The Zacks Consensus Estimate for YUM’s 2023 sales and EPS indicates a 5.9% and a 15.1% growth, respectively, from the year-ago period’s levels.
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