If casual dining is the most challenged segment in the industry, BJ’s Restaurants Inc. isn’t familiar.
The Huntington Beach, Calif.-based chain, which serves a vast menu of deep-dish pizzas, pastas and roasted meats, saw same-store sales grow 4.5% for the fourth quarter ended Jan. 1. That’s up from 1.6% from the same quarter last year.
Customer visits increased 1.1%, the fifth consecutive quarter of positive traffic for the company.
For the year, comparable restaurant sales increased 5.3%.
“Keeping our concept fresh and contemporary has always been one of the keys to our long-term success,” CEO Greg Trojan said during a conference call with investors.
Specifically, Trojan said the company’s strong yearly performance was driven by its wide-ranging menu offerings that offer “better value for our guests” such as its daily brewhouse specials and happy hour.
Off premise sales are also giving the brand a lift. For the quarter, off-premise sales represented about 9.5% of revenue, the company said.
But recent bad weather across the country, especially in its core California market, has led to a soft start to 2019.
“Los Angeles has received more rain in the first 45 days of 2019 than it received in the entire year of 2018,” CFO Greg Levin said.
Outside California, sales have been hurt by the Polar Vortex in the Midwest, unusually cold temperatures in the East and record snow levels in Washington state. Comparable sales at Oregon and Washington restaurants during the cold snap were down more than 40% in one weekend, the CFO said.
Higher levels of gift card bounce back promotions in January has also contributed to lower check averages, Levin said.
BJ’s expects a rebound as it introduces new items later this year including tri-tip sirloin. It will be added to the company’s premium slow roasted menu. The company is also seeing positive response to the recent introduction of zucchini noodles and a Moroccan chicken dish.
“I personally feel good about the [menu] initiatives we have in place,” Levin said.
Despite the soft start to 2019, Jeffries analyst Alexander Slagle said in a post conference report that BJ’s continues to have momentum. “The business is largely intact as key sales-driving initiatives continue to resonate with guests and drive solid traffic.”
Total revenue for the quarter grew 7.4% to $280.5 million.
The company reported net income of $10.7 million, or 49 cents per share, down from $23.5 million, or $1.12 per share, from the same quarter, last year. The company said the drop from 2017 was due to a one-time tax benefit of $15.7 million. When excluding the tax benefit, profit increased 37.3%, BJ’s said.
The company opened five restaurants in 2018, closing the year with 202 locations.
Contact Nancy Luna at [email protected]
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