BJ’s Restaurants Inc. saw tightening pandemic dining restrictions, especially in its home state of California, squeeze what had been improving same-store sales trends in the fourth quarter, the company said late Thursday in a business update.
The Huntington Beach, Calif.-based casual-dining brand on Friday said it had completed a $30 million “at-the-market,” or ATM, stock offering, which it increased from a stated $25 million just a day earlier.
So far in BJ’s first quarter, same-store sales were down 36.2% in the week ended Jan. 5, down 38.4% in the week ended Jan. 12 and down 36.9% in the week ended Jan. 19.
In the fourth quarter ended Dec. 29, same-store sales were down 20.6% in the period ended Oct. 27, down 27% in the period ended Nov. 24 and down 45.3% in the period ended Dec. 29. For the entire quarter, the company said, same-store sales were down 32.3%.
BJ’s has its largest share of open restaurants, or 62, in California, which in December imposed severe restrictions on both indoor and outdoor dining because of a coronavirus surge.
“BJ’s fourth quarter results were impressive in light of the increasing restrictions on our dining room capacity,” said Greg Trojan, BJ’s CEO, in a statement. “October results were strong with weekly sales per restaurant averaging over $83,000 and comparable restaurant sales of [negative] 20.6%, despite being limited to only outdoor seating and off-premise sales at 34 of our 62 California restaurants for at least part of the month and dining=room capacity limitations at our remaining 175 restaurants.”
Trojan noted that a number of states in November in December rolled back dine-in re-openings because of rising COVID-19 cases.
“Sales in November and December averaged $77,600 and $60,300 per restaurant week, respectively, which equated to comparable restaurant sales of [negative] 27.0% in November and [negative] 45.3% in December,” Trojan said. “Despite these challenges, the productivity and efficiency initiatives implemented at the start of the pandemic allowed us to generate positive cash flow from operations for the quarter.”
So far in 2021, he said, sales have been improving, “which we believe reflects both high levels of pent-up guest demand and the easing of certain capacity restrictions.”
Trojan said BJ’s has several sales-building initiatives underway, including a subscription-based beer club, which it began testing in 2019, and a virtual brand focused on slow-roasted and other protein products.
“Both of these sales driving initiatives are performing well in early test,” Trojan said. “We also plan to continue leveraging the strong quality and value of the BJ’s brand through our catering business, which we believe offers significant upside for our off-premise sales channel.”
In preliminary results for the fourth quarter, BJ’s said revenues totaled $197 million.
The company expected impairment charges in the fourth quarter of between $2.5 million and $4.5 million, which were “related primarily to handheld tablets disposal costs and an impairment charge related to one or two restaurants.”
In its $30 million ATM equity offering, BJ’s said it intended to use the share-sale proceeds for working capital and other general corporate purposes, new restaurant expansion and to strengthen its balance sheet.
Alexander Slagle, an analyst with Jefferies, said in a note to investors said the offering “adds helpful flexibility” to the company’s finances.
In May, BJ’s agreed to sell $70 million in common shares to Boston-based Act III Holdings LLC, an investment fund run by former Panera Bread CEO Ron Shaich and T. Rowe Price Associates Inc.
BJ’s, founded in 1978, owns and operates 210 casual-dining restaurants in 29 states.
Updated Jan. 22, 2021: This story has been updated with BJ's completion of the $30 million stock offering.
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