Productivity efforts paid off for BJ’s Restaurants Inc. in the second quarter, generating record operating margins and a surge in profits, the company said on Thursday.
Net income for the second quarter ended June 30 rose 55.4 percent, to $12.4 million, or 48 cents per share, from $8 million, or 28 cents per share, in the same period a year ago. Revenue grew 5.8 percent, to $232 million, from $219.4 million. Same-store sales increased 0.5 percent.
Project Q, an effort to improve productivity inside BJ’s restaurants, drove profit growth. Greg Trojan, BJ’s CEO, said restaurant-level operating margins were 20.9 percent of sales in the quarter, a record for the chain and an improvement of 230 basis points over the same period last year.
“Our record second-quarter results further demonstrate the progress we are making in driving top-line sales and improving our operating margins,” Trojan said. Profit growth “clearly highlights the strong operating leverage in our model and provides a solid platform for continued bottom line growth,” he said.
New menu items, including quinoa bowls and two new light entrees, helped generate sales in the period, Trojan said.
BJ’s opened five new restaurants in the second quarter, and is on pace to add 16 new units this year. The chain has 165 restaurants in 21 states, and the ability to expand to as many as 425 units nationwide, Trojan said.
BJ’s repurchased $39.8 million worth of shares in the quarter. Since April 2014, it has repurchased 3.8 million shares for $146.5 million. The company plans to buy another $50 million worth of shares, bringing the total repurchasing program to $200 million.
“BJ’s operating initiatives combined with our long-term strategy of increasing restaurant operating weeks by at least 10 percent annually have established strong earnings momentum and a visible foundation for sustainable long-term growth,” Trojan said. “With significant and improving cash flow from operations and a healthy balance sheet, we have the financial flexibility to execute on multiple initiatives to enhance shareholder value.”
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