BJ's Restaurants' (BJRI) Q3 Earnings Lag Estimates, Fall Y/Y
BJ's Restaurants, Inc. BJRI reported third-quarter fiscal 2023 (ended Oct 3, 2023) results, with earnings and revenues missing the Zacks Consensus Estimate. The top rose year-over-year while the bottom line declined from the prior-year quarter’s figure. Following the announcement, shares of the company dropped 4% during the after-hours trading session on Oct 26.
Earnings & Revenues
In the quarter under review, the company reported a loss per share of 16 cents, narrower than the Zacks Consensus Estimate of a loss of 1 cent. In the year-ago quarter, the company reported an adjusted loss per share of 7 cents.
Total revenues of $318.6 million missed the Zacks Consensus Estimate of $326 million. The top line increased 2.3% on a year-over-year basis. The upside was primarily backed by an increase in average weekly sales (1.5%) and the solid performance of the new restaurants.
BJ's Restaurants, Inc. Price, Consensus and EPS Surprise
BJ's Restaurants, Inc. price-consensus-eps-surprise-chart | BJ's Restaurants, Inc. Quote
Comparable restaurant sales in the fiscal third quarter increased 0.4% year over year compared with a rise of 8.9% reported in the prior-year quarter. Our estimate for the metric was 3.9%. The softness was mainly due to an inclination toward a normal seasonal pattern and lower sales volumes (in August and September).
Expenses & Operating Margins
During the fiscal third quarter, labor costs — as a percentage of sales — came in at 37.1%, down 60 basis points (bps) year over year. Our estimate for the metric was 37.1%.
Occupancy and operating costs (as a percentage of sales) came in at 25.1% compared with 24.7% reported in the year-ago quarter. Our estimate for the metric was 24.2%.
General and administrative expenses (as a percentage of sales) came in at 6.1% in the quarter, flat on a year-over-year basis. Our estimate for the metric was 6.4%.
During the quarter, restaurant-level operating margin came in at 11.9% compared with 10.3% reported in the year-ago quarter. The upside was driven by comps growth, improving operational execution and cost-savings initiatives. Our estimate for restaurant-level operating margin was 12.5%.
Store Count
As of Oct 3, 2023, BJ’s Restaurants owned and operated 217 casual dining restaurants (in 30 states). During the fiscal third quarter, the company opened restaurants in Rochester, New York and Grand Rapids, Michigan and reported solid sales with respect to the same. The company reported weekly average sales of more than $130,000, reflecting a rise of 10% compared with the overall system. It also announced the relocation of the Chandler, AZ restaurant.
The company expects to open four to six new restaurants in fiscal 2024. It also emphasized its remodel initiative.
Balance Sheet
As of Oct 3, 2023, cash and cash equivalents totaled approximately $12 million compared with $6.1 million as of Jul 4, 2023. Total debt as of Oct 3, 2023, amounted to $60 million compared with $53 million reported in the previous quarter.
Zacks Rank & Key Picks
BJ's Restaurants currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
FAT Brands Inc. FAT sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 28.7%, on average. The stock has declined 24% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for FAT Brands’ 2024 sales and EPS suggests rises of 36.3% and 29.6%, 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 18.2% in the past year.
The Zacks Consensus Estimate for LOCO’s 2024 sales and EPS indicates a 3.4% and an 18.7% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. ARCO currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 35%, on average. The stock has gained 25.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests an increase of 8.5% and 16.2%, respectively, from the year-ago period’s levels.
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BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
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FAT Brands Inc. (FAT) : Free Stock Analysis Report
