BJ’s Restaurants, Inc. (BJRI) sustained its growth momentum in the top-line in first-quarter 2010 on the heels of operating efficiencies, improved kids menu and lunch offerings, which has helped the casual dining restaurant operator drive traffic that remains in positive territory for the first time since the third-quarter of 2007.
Management also hinted that traffic remains positive as the company enters the second quarter. Revenues for the quarter under review jumped 18.8% year-over-year to $121.7 million.
The Huntington Beach, California-based BJ’s Restaurants said that the quarterly earnings of 16 cents a share outdid the Zacks Consensus Estimate by a penny, and rose 14.3% from 14 cents posted in the prior-year quarter. We believe that the company is well positioned to sustain its growth momentum while generating improved earnings.
BJ’s Restaurants, which competes with Red Robin Gourmet Burgers Inc. (RRGB) and Buffalo Wild Wings, Inc. (BWLD) in the casual dining segment, said comparable-restaurant sales for the quarter grew substantially by 4.4%, on a drop of 0.2% registered in fourth-quarter 2009 and a decline of 0.1% witnessed in the prior-year quarter.
Restaurant operating cash flow climbed 16.9% to $22.2 million, whereas restaurant operating cash-flow margin contracted 30 basis points to 18.2%, reflecting a 30-basis point increase in labor and benefits costs to 35.7% and a 20-basis point rise in occupancy and operating costs to 21.4%, partially offset by a 10-basis point dip in cost of sales to 24.7%.
With under 100 restaurants, there remain ample growth opportunities. However, in response to a sluggish economy, the company has slowed its unit growth. In fiscal year 2009, 10 BJ’s Restaurants were opened compared to 15 in 2008. In fiscal year 2010, management plans to open 10 to 11 restaurants. During the quarter under review, two new restaurants were opened.
BJ’s Restaurants ended the quarter with cash and cash equivalents of $22.4 million, long-term debt of $2.5 million and shareholders equity of $260.8 million.
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