BJ’s Restaurants, Inc. (BJRI), reported fourth quarter adjusted earnings of 22 cents per share, in line with the Zacks Consensus Estimate, but soared more than three fold from the prior-year quarter’s 12 cents. The earnings results were driven by comparable-store sales growth, which leaped for the fourth consecutive quarter.
Revenues for the quarter under review soared 18% year over year to $132.9 million, but were in line with the Zacks Consensus Estimate of $133.0 million. The upside in revenues was helped by 12% more operating weeks compared with the year-ago quarter.
The company’s full-year adjusted earnings per share were 80 cents versus 53 cents in full fiscal 2009. Revenues were $513.9 million in full fiscal 2010, representing a year-over-year growth of 20.0%, driven by a 5.6% rise in comparable-restaurant sales and 13% higher operating weeks.
Inside the Headline Numbers
Based in Orange County, California, BJ’s sustained its growth momentum in the top-line in fourth quarter 2010 on the heels of operating efficiencies and innovative offerings, which have helped the casual dining restaurant operator to drive traffic.
Comparable-restaurant sales for the quarter grew substantially by 5.9%, compared to the drop of 0.2% witnessed in the prior-year quarter.
Operating margin climbed 280 basis points from the year-ago quarter to 6.4%, reflecting a 20-basis point (bps) drop in cost of sales, 60-bp plunge in labor and benefits costs, 50-basis point decline in occupancy and operating costs and 10-basis point fall in general and administrative expenses.
Store Update
BJ’s with a chain of about 102 restaurants opened 2 restaurants during the fourth quarter of 2010. Two new restaurants are set to open in the latter half of the first quarter of 2011.
BJ’s is one of the few casual dining chains, which has been expanding in a weak economy. In fiscal 2011, the company plans to open 12 to 13 restaurants compared to 10 restaurants in fiscal 2010.
Financial Position
BJ’s ended the year with cash and cash equivalents of $53.2 million and shareholders equity of $287.8 million. As of September 28, 2010, BJ’s long term debt liability was nil.
Outlook
We believe that the company is well-positioned to sustain its growth momentum while generating improved earnings. Moreover by boasting a unique position in the commoditized hyper-competitive bar and grill segment, a viable business strategy and a debt free balance sheet, BJ’s offer investors one of the strongest growth stories in this space.
One of BJ’s primary competitors, Cheesecake Factory Inc.(CAKE) has reported adjusted earnings of 36 cents per share for its fourth quarter 2010, which surpassed the Zacks Consensus Estimate by a penny. The better-than-expected results were driven by comparable-store sales growth, higher traffic and effective cost management.
BJ’S RESTAURANT (BJRI): Free Stock Analysis Report
CHEESECAKE FACT (CAKE): Free Stock Analysis Report
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