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BJ's Restaurants says discounting hurt 4Q profit

NEW YORK (AP) -- Shares of BJ's Restaurants Inc. fell on Friday after it said a key measure of revenue fell, and it predicted fourth-quarter earnings that would be less than analysts had expected.

THE SPARK: BJ's said sales at restaurants open at least a year fell 2.7 percent during the quarter that ended Dec. 31. During the same period a year earlier that revenue had risen 3 percent. That's a key metric for retailers and restaurant operators, because it filters out comparisons with new restaurants or those that closed during the past year.

BJ's said the decline was because the number of people eating there fell 2.3 percent, and their average tab fell by 0.4 percent as more discounts and promotions were used than in the prior year.

It said it expects net income of 5 cents to 7 cents per share, not counting any non-cash charges. Analysts surveyed by FactSet had been expecting a profit of 10 cents per share.

THE BIG PICTURE: A late Thanksgiving reduced the number of shopping days between then and Christmas, and shoppers held out for discounts. Several big retailers have cut profit forecasts for the fourth quarter.

BJ's sales met its expectations during the first part of the quarter, but then it saw a "significant softening" in sales at restaurants open at least a year beginning in mid-November through the end of the year, said Greg Trojan, the company's president and CEO. Also, sales in Texas and the Ohio Valley were hurt by severe weather in December, he said.

BJ's owns and operates 146 casual dining restaurants — including 29 locations in Texas and four in Ohio — under several different brands.

SHARE ACTION: Down $1.85, or 6.1 percent, to $28.66 in morning trading. They're near their 52-week low of $25.50.