BJRI Expands in Washington - Analyst Blog
April 03 2013 - 7:50AM
Zacks
BJ's Restaurants Inc. (BJRI) recently announced
the opening of a new restaurant at Puyallup, Wash. The opening
marks the first of the company’s 17 targeted openings for 2013. The
total targeted openings include the shifting of one of the
company’s small format "Pizza and Grill" restaurants to a new site
in Eugene, Ore.
The latest restaurant, which is located in suburban Seattle, is
spread across approximately 8,500 square feet and accommodates
around 270 guests. We expect the variety of menu offered at the new
unit and contemporary ambience to attract guests. The new Puyallup
unit is the third BJ’s restaurant in the state of Washington.
We have noticed that BJ’s Restaurants has mainly expanded in its
existing markets in California and Texas in the last three years
citing plenty of growth opportunities. In California, the company
currently has 61 restaurants while Texas boasts 28 units.
Now the company is considering other potential new markets for
entry in 2013 and 2014 to realize untapped opportunities. According
to management, in the long run, there exists the possibility of
opening at least 425 outlets in the U.S.
Washington is a relatively newer market with just 3 BJ’s
Restaurants. As per the National Restaurant Association, the
restaurant industry in Washington plays a vital role in the state’s
revenues. According to this research site, Washington’s restaurants
are expected to record $10.9 billion in sales in 2013.
While the aforesaid strategy is a positive, there is a flip side to
it. Penetration into new markets will involve some risk for BJ’s
Restaurants. There will be an attendant headwind of higher
pre-opening costs compared with matured trade areas, in which the
company already has support infrastructure. BJ’s Restaurants enjoys
less tenant improvement allowance and lower construction period
rent in its existing markets.
BJ’s Restaurants currently carries a Zacks Rank 4 (Sell). Some
other restaurant industry stocks with a favorable Zacks Rank
include Red Robin Gourmet Burgers Inc. (RRGB),
Burger King Worldwide Inc. (BKW) and
Cracker Barrel Old Country Store Inc. (CBRL).
While Red Robin and Cracker Barrel retain a Zacks Rank #1 (Strong
Buy), Burger King carries a Zacks Rank #2 (Buy).
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
BURGER KING WWD (BKW): Free Stock Analysis Report
CRACKER BARREL (CBRL): Free Stock Analysis Report
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
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