BJ's Restaurants Inc (BJRI) Reports Mixed Fiscal 2023 Results Amidst Operational Challenges
Total Revenue: Fiscal 2023 total revenue increased by 3.8% to $1.3 billion, despite a 6.0% decrease in Q4.
Net Income: Annual net income rose significantly to $19.7 million from $4.1 million in the previous year.
Earnings Per Share: Diluted net income per share increased to $0.82 for the fiscal year, up from $0.17.
Comparable Restaurant Sales: Q4 comparable restaurant sales saw a modest increase of 0.6%.
Adjusted EBITDA: Q4 adjusted EBITDA improved to $27.3 million from $26.1 million year-over-year.
Restaurant Openings and Closures: BJRI opened five new restaurants and closed five underperforming ones in fiscal 2023.
Share Repurchases: The company repurchased approximately 0.3 million shares for about $6.7 million in Q4.
On February 15, 2024, BJ's Restaurants Inc (NASDAQ:BJRI) released its 8-K filing, detailing the financial outcomes for its fiscal fourth quarter and the full year of 2023. The company, known for its casual dining restaurants and brewhouse roots, operates solely within the United States and has recently faced both operational successes and challenges.
Fiscal Year and Fourth Quarter Highlights
For the fiscal year 2023, BJRI reported a revenue increase of 3.8% to $1.3 billion, compared to the previous year. This growth is more pronounced when adjusting for the extra operating week in fiscal 2022, with revenues actually increasing by 5.5%. The company's net income saw a substantial rise to $19.7 million, up from $4.1 million, and diluted net income per share increased to $0.82 from $0.17.
However, the fourth quarter painted a mixed picture. Total revenues decreased by 6.0% to $323.6 million, which BJRI attributes to the quarter having one less operating week compared to the same period in the previous year. When adjusted for this difference, revenues in fact increased by 0.9%. Comparable restaurant sales in Q4 saw a slight uptick of 0.6%. Despite the revenue decline in the quarter, net income doubled to $8.1 million, and diluted net income per share rose to $0.34 from $0.17.
Operational Excellence and Strategic Moves
CEO Greg Levin highlighted the company's operational excellence and margin enhancement initiatives, which have led to improved restaurant margins by 150 basis points year-over-year to 14.4% in the fourth quarter. BJRI's menu simplification has yielded labor efficiencies and better team member retention, contributing to improved guest experiences.
Our menu simplification is delivering its anticipated benefits of improved labor efficiencies and higher team member retention," Levin stated, emphasizing the company's commitment to operational excellence and guest satisfaction.
In 2023, BJRI opened five new restaurants, including its first in Illinois, and closed five underperforming locations. The company's new restaurant growth strategy is guided by disciplined capital allocation and a focus on strong returns and robust restaurant economics.
Capital Expenditures and Shareholder Value
BJRI's capital expenditures for 2024 are projected to be around $70 million, which will cover three new restaurants and 20 remodels. The company's share repurchase program was also increased by $50 million, reflecting confidence in its operating cash flow and financial flexibility.
Financial Tables and Metrics
The financial statements reveal key metrics such as a 25.5% cost of sales, a 36.5% labor and benefits cost, and a 23.6% occupancy and operating cost as percentages of total revenues for Q4. These figures are essential for understanding the company's cost structure and operational efficiency.
BJRI's balance sheet shows a healthy financial position with $29.07 million in cash and cash equivalents and total assets of $1.058 billion. The company's total debt stands at $68 million, with shareholders' equity at $365.761 million.
Overall, BJRI's fiscal 2023 results demonstrate resilience and strategic adaptability in a challenging market. The company's focus on operational excellence, menu simplification, and disciplined capital allocation has positioned it for continued success. As BJRI continues to navigate the dynamic restaurant industry, investors and stakeholders will be watching closely to see how these initiatives translate into long-term growth and profitability.
Explore the complete 8-K earnings release (here) from BJ's Restaurants Inc for further details.
This article first appeared on GuruFocus.
