BJ's 2011 Unit Growth on Track - Analyst Blog
May 24 2011 - 6:45AM
Zacks
BJ’s Restaurants,
Inc (BJRI), which operates around 105 restaurants, remains
on track to open as many as 12 to 13 new restaurants in fiscal
2011, of which three restaurants have already been opened.
The company opened the first
restaurant of 2011 in Tyler, Texas. The 8,000-square feet
restaurant can accommodate upto 265 guests. The second restaurant
has been opened at Arden Fair Mall in Sacramento, California. The
restaurant is approximately 8,500 square feet and seats around 260
guests.
The third restaurant has been
opened recently in Austin, Texas. The outlet has a space of 8,500
square feet and can accommodate 280 guests at a time. The new
restaurant is the second restaurant of the company in Austin and
the twenty second in Texas.
The Orange County, California-based
company’s newly-opened restaurant is located at the Shops at Arbor
Walk and is expected to benefit immensely from its strategic
positioning.
Apart from its signature deep-dish
pizzas, its own hand-crafted beers and famous Pizookie dessert, the
menu possesses great variety. The guests also have the option of
watching television programs while trying out the various
lip-smacking delicacies in this restaurant.
BJ’s next two restaurants are set
to open in Century City, California and Las Vegas, Nevada before
the end of June 2011.
BJ’s is one of the few casual
dining chains that remains committed to its unit growth plan in
2011 and beyond and believes that there is room for at least 300
outlets in the long run. Looking forward to 2012 and 2013, the
company plans low double-digit capacity increase per year in the
approximate range of 12% to 13%. One third of these openings will
be in BJ restaurant’s market home court of California, while
another third will come up in the Western states, excluding
California and the other third in the Florida market or in a few
new markets. Additionally, 50% of the new stores will be
conversions of old retail locations.
We believe the company should
continue to open new restaurants in order to enhance its market
share as industry peers such as California Pizza
KitchenInc. (CPKI),
Red Robin Gourmet Burgers Inc. (RRGB) and
Buffalo Wild Wings Inc. (BWLD) are also on a
modest expansion mode.
BJ’s is well positioned to sustain
its growth momentum while generating improved earnings spurred by
operating efficiencies and innovative offerings. These also help
the company to drive traffic and post robust same-store sales
growth. The company also boasts of a debt-free balance sheet and
plans to enhance pricing to mitigate input cost pressure.
Additionally, the core Californian market, which had been badly hit
during the housing downturn, has also begun to turnaround. The
gradual development of this market, which is one of the major
operational locations for the company, is an important tailwind for
BJ.
We maintain a Zacks #1 Rank on
BJ’s, which translates into a short-term Strong Buy rating. Our
long-term recommendation also remains Outperform.
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
BUFFALO WLD WNG (BWLD): Free Stock Analysis Report
CALIF PIZZA KIT (CPKI): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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