BJ's Consolidates in Las Vegas - Analyst Blog
June 23 2011 - 8:00AM
Zacks
California-based BJ’s
Restaurants, Inc (BJRI) recently announced the opening of
a new restaurant in Las Vegas, Nevada. This is the fifth of the
company’s targeted 12 to 13 new openings for fiscal 2011. The
company intends to drive market share through expansion and the
opening of the new restaurant is in line with this strategy.
The newly opened
restaurant
covers approximately 8,500 square feet and is capable of
accommodating around 280 guests. It is located in the 1 million
square feet Centennial Center in northwest Las Vegas and is
expected to benefit immensely from its strategic positioning.
Apart from serving lip-smacking
dishes, which include its signature deep-dish pizzas, the much
coveted Pizookie dessert and its own hand-crafted beers, the restaurant also
provides the guests with the option of watching
television.
The company is strengthening its
footprint in Las Vegas as it was able to easily drive
traffic in its
other two restaurants situated in the Las Vegas suburbs of
Henderson and Summerlin. The guests are fond of BJ’s cuisine. The
opening of the new restaurant marks BJ's fifth restaurant in
Nevada.
BJ’s currently operates 107
restaurants and almost half of the restaurants are located
in California. The company remains committed to its expansion
strategy and for the next two years expects double-digit capacity
increase per year in the approximate range of 12% to 13%.
Currently, 8 outlets are under construction and 50% of new stores
will be conversions of old retail locations.
We believe BJ’s is well positioned
to sustain its growth momentum while generating improved earnings
spurred by operating efficiencies and innovative offerings. As the
economy revives and expansion re-accelerates, we expect the company
to witness further improvement in earnings along with profit
margins in the coming quarters buoyed by positive sales leverage,
efficiencies and price increases, which will more than offset cost
escalation.
We maintain a Zacks #3 Rank on
BJ’s, which translates into a short-term Neutral recommendation.
However, one of its closest competitors Red Robin
Gourmet Burger
Inc. (RRGB) holds a Zacks #1 Rank,
which translates into a short-term Strong Buy rating given the
company’s efforts to turn its business around in 2011.
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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