BJ's 2010 Expansion Almost Complete - Analyst Blog

BJ’s Restaurants Inc. (BJRI) announced that it has opened a new restaurant in Puente Hills, California. This new restaurant, covering 8,500 square feet, accommodates a seating arrangement for 280 guests.

The company will be able to drive higher traffic in its new restaurant situated in the Southern California market. With a strategic location at the south of Puente Hills East shopping center and east of the Puente Hills Mall, BJ’s enjoys a strong brand awareness and guest loyalty. The menu offers a plethora of variety, apart from its signature deep-dish pizzas and famous handcrafted beers and Pizookie dessert. To make their dining experience more enjoyable, the restaurant also offers the privilege to watch television programs to its guests.

Orange Country, California based company slowed down its unit growth, given the sluggish economy. In fiscal year 2009, BJ’s opened 10 restaurants compared with 15 in 2008. In fiscal 2010, BJ’s planned to open 10 restaurants, of which 9 have already been opened in Forth Worth, Texas; Escondido, California; two in San Antonio, Texas; Daytona Beach, Florida; Tucson, Arizona; Colorado Springs, Colorado; Sparks, Nevada; and Puente Hills, California. The company’s tenth and final restaurant will open in the Houston market in Woodlands, Texas before the end of November. BJ’s is almost on the verge of completing its expansion goal for 2010 and is now looking forward to its development pipeline for 2011.

We believe with its newly opened restaurants in 2010, BJ’s has been able to gain market share as there is a gradual improvement in the restaurant industry. Of late, the restaurant industry has faced extremely tough challenges due to the economic turmoil that resulted in weak labor and tight credit markets and lower discretionary spending.

With about 101 restaurants, the company is well positioned to sustain its growth momentum while generating improved earnings spurred by operating efficiencies and innovative offerings. However, unfavorable consumer spending pattern and increased competition from other casual dining operators such as California Pizza Kitchen Inc. (CPKI), Red Robin Gourmet Burgers Inc. (RRGB) and Buffalo Wild Wings Inc. (BWLD) still remain concerns.