BJRI BJs Restaurants Inc

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.

 
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