Stock Story -
American restaurant chain BJ’s Restaurants (NASDAQ:BJRI) reported results in line with analysts' expectations in Q2 CY2024, with revenue flat year on year at $349.9 million. It made a GAAP profit of $0.72 per share, improving from its profit of $0.50 per share in the same quarter last year.
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BJ's (BJRI) Q2 CY2024 Highlights:
- Revenue: $349.9 million vs analyst estimates of $349.2 million (small beat)
- EPS: $0.72 vs analyst estimates of $0.53 (37.1% beat)
- Gross Margin (GAAP): 15.5%, up from 14.5% in the same quarter last year
- Locations: 216 at quarter end, in line with the same quarter last year
- Same-Store Sales were flat year on year (4.7% in the same quarter last year)
- Market Capitalization: $839.5 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 3.1% over the last five years was weak as its restaurant footprint remained unchanged, implying that growth was driven by more sales at existing, established dining locations.
This quarter, BJ's grew its revenue by 0.1% year on year, and its $349.9 million in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 2.9% over the next 12 months, an acceleration from this quarter.
Same-Store SalesSame-store sales growth is an important metric that tracks organic growth and demand for a restaurant's established locations.
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 3.6% year on year. Given its flat restaurant base over the same period, this performance stems from increased foot traffic or larger order sizes per customer at existing locations.
In the latest quarter, BJ's year on year same-store sales were flat. By the company's standards, this growth was a meaningful deceleration from the 4.7% year-on-year increase it posted 12 months ago. We'll be watching BJ's closely to see if it can reaccelerate growth.
Key Takeaways from BJ's Q2 ResultsWe enjoyed seeing BJ's exceed analysts' EPS expectations this quarter. Overall, this quarter seemed fairly positive and shareholders should feel optimistic. The stock remained flat at $37.30 immediately following the results.
