In Line 3Q for BJ's Restaurants - Analyst Blog
October 25 2011 - 4:15AM
Zacks
BJ’s Restaurants
Inc. (BJRI) reported third-quarter 2011 adjusted earnings
of 24 cents per share, in line with the Zacks Consensus Estimate
and higher than the prior-year earnings of 20 cents.
The upside was attributable to double-digit growth in the top line
and strong comparable restaurant sales growth.
On a GAAP basis, quarterly earnings
were 22 cents including 2 cents a share related to a lawsuit
settlement expense.
Inside the Headline
Numbers
Revenues in the reported quarter
climbed 17% year over year to $151.0 million. The increase was
attributable to solid increases in both comparable restaurant sales
and new restaurant openings.
BJ’s sustained its top-line growth
momentum in the third quarter on the back of operating
efficiencies, innovative offerings and expansion, which have helped
the casual dining restaurant operator to drive traffic.
Comparable restaurant sales grew
6.5% compared with 6.7% in the prior-year quarter.
Operating margin was flat year over
year at 5.8%, reflecting a 50-bp plunge in labor and benefits
costs, 10 bp drop in cost of sales, flat occupancy and operating
costs and 30-bp fall in general and administrative expenses, offset
by a 20 bps spike in depreciation and amortization and 50 bp rise
in restaurant opening.
Store Update
The company opened 4 restaurants
during the third quarter of 2011.
BJ’s is one of the few casual
dining chains that has been expanding even in a weak economy. For
fiscal 2011, the company plans to open 13 restaurants compared with
10 in fiscal 2010. The company’s plan is to debut 4 new restaurants
in the fourth quarter, of which one has already been introduced and
3 will be unveiled before Thanksgiving.
The chain plans to open as many as
15 new restaurants in 2012.
Financial
Position
BJ’s ended the quarter with cash
and cash equivalents of $40.3 million and shareholders equity of
$318.8 million. As of September 27, 2011, BJ’s long-term debt
liability was nil.
Outlook
We expect estimates to go up in the
coming days as the company posted strong results. We see the
company as well positioned to sustain its growth momentum and
generate improved earnings in future.
However, menu pricing is slightly
lagging the company’s cost pressures and it plans to take some
pricing action shortly.
One of BJ’s primary competitors,
Darden Restaurants Inc. (DRI) posted first quarter
2011 earnings of 78 cents per share, in line with our consensus
estimate, but down 3% from the year-ago quarter earnings.
BJ’s Restaurants currently retains
a Zacks #3 Rank, which translates into a short-term Hold rating. We
are also maintaining our long-term Neutral recommendation on the
stock.
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
DARDEN RESTRNT (DRI): Free Stock Analysis Report
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