BJ’s Restaurants Revenue Climbs

BJ’s Restaurants Inc. (BJRI: 20.76 -0.40 -1.89%) sustained its growth momentum in the top-line in fourth-quarter 2009. Given the economic conditions and lower consumer discretionary spending, the company hinted at sluggish recovery in the restaurant industry in fiscal 2010.

Revenue for the quarter jumped 13.5% to $112.6 million. Despite a double-digit increase in the top-line, the rate of rise in the bottom-line decelerated from third-quarter 2009, (when earnings had climbed 50%) hurt by higher expenses. Cost of sales rose 11.7%, labor and benefits grew 13.4%, occupancy and operating costs climbed 14.6%, general and administrative expenses increased 7.1%, depreciation and amortization jumped 17.9%, and restaurant opening expenses surged 58.8%.

 

The quarterly earnings of 12 cents a share surpassed the Zacks Consensus Estimate of 10 cents and rose 9.1% from 11 cents posted in the prior-year quarter. However, on a reported basis, including one-time items, earnings dropped 25% to 6 cents a share from 8 cents delivered in the year-ago quarter.

 

The quarterly earnings of 12 cents a share outperformed the Zacks Consensus Estimate by 20%. In the preceding three quarters of fiscal year 2009, the earnings had outperformed the Zacks Consensus Estimate in the first and second quarters by 27.3% and 6.7%, respectively, but had underperformed by 7.7% in third-quarter 2009.

 

The current Zacks Consensus Estimate for first-quarter 2010 is 15 cents a share, which had remained stagnant for the past 30 days. Of the 16 analysts covering the stock, two analysts have changed their estimates in the last 30 days. Since they moved in opposite directions, the effect remains neutral on the Zacks Consensus Estimate.

 

BJ’s Restaurants, which competes with Red Robin Gourmet Burgers Inc. (RRGB: 19.93 +0.47 +2.42%) and Buffalo Wild Wings Inc. (BWLD: 42.94 -5.46 -11.28%) in the casual dining segment, said comparable-restaurant sales for the quarter dropped 0.2% compared to a decline of 0.7% experienced in the prior-year quarter.

 

With about 92 restaurants, there remain ample growth opportunities. However, in response to a sluggish economy, the company has slowed its unit growth. In fiscal year 2009, 10 BJ’s Restaurants were opened compared to 15 in 2008. In fiscal year 2010, management plans to open 10 to 11 restaurants. During the quarter under review, five new restaurants were opened.