BJ’s Restaurants Inc.'s same-store sales increased a better-than-expected 1.2 percent in the fourth quarter, the company said Thursday in an earnings preview.
The Huntington Beach, Calif.-based operator said it expects revenue to rise 7.1 percent for the quarter ended Dec. 30, to $213.9 million, compared with $199.8 million the same quarter last year. The company’s full earnings report is scheduled for release on Feb. 18.
Greg Trojan, BJ’s president and CEO, said he was pleased with the company’s “solid top-line finish” to the 2014 fiscal year.
“BJ’s positive comparable-restaurant-sales momentum reflects the success of several companywide initiatives focusing on affordability, food quality and innovation, speed and hospitality, coupled with the great everyday execution from our restaurant team members,” Trojan said in a statement. “Our better-than-expected 1.2-percent positive comparable-restaurant sales in the 2014 fourth quarter, combined with our productivity and expense management initiatives, is expected to result in another strong quarter of improved margins and profitability growth.”
However, Wall Street analysts expressed concern in reports late Thursday that revenue was below their projections, despite the same-store sales results.
Christopher O’Cull, director and equity research analyst for KeyBanc Capital Markets Inc., said revenue fell shy of the expected $214.4 million, which he said could be a result of smaller prototype units opened in the second half of 2014.
O’Cull speculated that the same-store sales increase was likely driven by 1-percent traffic growth. A year ago, BJ’s same-store sales declined 2.7 percent.
Sharon Zackfia, head of the consumer group at William Blair, estimated traffic was only slightly positive “as the company’s average price increase of roughly 2-percent was likely largely offset by ongoing negative mix shift stemming from the introduction of more value-oriented items last February.”
BJ’s has been working to beef up its mid-priced menu category with burgers starting at $6.95 and other value-positioned offerings, a move that officials say has chipped away at the average ticket.
At the same time, BJ’s rolled out last year a new mobile ordering and payment initiative, and trimmed its menu to reduce complexity and improve speed of service.
BJ’s opened 11 new restaurants in 2014, and at least 15 new units are planned for 2015. The chain currently has 156 locations, and Trojan reiterated that BJ’s could eventually reach 425 restaurants nationwide.
BJ’s, known for its signature deep-dish pizza and craft beers, operates under the BJ’s Restaurant & Brewery, BJ’s Restaurant & Brewhouse, BJ’s Pizza & Grill and BJ’s Grill brands.
Contact Lisa Jennings at [email protected].
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