Stock Story -
American restaurant chain BJ’s Restaurants (NASDAQ:BJRI) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 1.2% year on year to $337.3 million. It made a GAAP profit of $0.32 per share, improving from its profit of $0.15 per share in the same quarter last year.
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BJ's (BJRI) Q1 CY2024 Highlights:
- Revenue: $337.3 million vs analyst estimates of $335.4 million (small beat)
- EPS: $0.32 vs analyst estimates of $0.15 ($0.17 beat)
- Gross Margin (GAAP): 15%, up from 12.6% in the same quarter last year
- Same-Store Sales were down 1.7% year on year (beat vs. expectations of down 2.3% year on year)
- Store Locations: 217 at quarter end, increasing by 1 over the last 12 months
- Market Capitalization: $750.4 million
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 DiningSit-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 GrowthBJ'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 3.3% over the last five years was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.
This quarter, BJ's reported a rather uninspiring 1.2% year-on-year revenue decline to $337.3 million in revenue, in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 3.5% over the next 12 months, an acceleration from this quarter.
Same-Store Sales BJ's demand within its existing restaurants has generally risen over the last two years but lagged behind the broader sector. On average, the company's same-store sales have grown by 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 same-store sales fell 1.7% year on year. This decline was a reversal from the 9% year-on-year increase it posted 12 months ago. We'll be keeping a close eye on the company to see if this turns into a longer-term trend.
Key Takeaways from BJ's Q1 Results We were impressed that BJ's beat analysts' same store sales, gross margin, and EPS expectations this quarter. Zooming out, we think this was a great quarter that shareholders will appreciate. The stock is up 4.6% after reporting and currently trades at $34.25 per share.
