BJ’s Restaurants Inc. (BJRI) reported second quarter earnings of 23 cents per share, which outdid the Zacks Consensus Estimate of 20 cents, and rose 44% from 16 cents posted in the prior-year quarter. The better-than-expected results were driven by comparable-store sales growth and higher traffic.
Revenues for the quarter under review soared 21% year-over-year to $130.5 million and also outperformed the Zacks Consensus Estimate of $127.0 million. The upside in revenues was helped by 13% more operating weeks as compared to the year ago quarter. Comparable-restaurant sales for the quarter grew substantially by 5.3%, on a drop of 1.3% witnessed in the prior-year quarter.
BJ’s sustained its growth momentum in the top-line in second-quarter 2010 on the heels of operating efficiencies and innovative offerings, which have helped the casual dining restaurant operator to drive traffic.
Operating margin climbed 70 basis points from the year-ago quarter to 6.5%, reflecting a 10 basis point drop in both labor and benefits costs and occupancy and operating costs, 20 basis points’ fall in general and administrative expenses and a 60-basis point dip in cost of sales.
Financial Position
BJ’s ended the quarter with cash and cash equivalents of $32.7 million, and shareholders equity of $269.3 million. As of June 29, 2010, BJ’s long term debt liability was nil.
Outlook
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 restaurants. In the first half of 2010, BJ’s has opened 4 restaurants and plans to open 4 and 2 new restaurants in the third quarter and fourth quarter, respectively.
We believe that the company is well-positioned to sustain its growth momentum while generating improved earnings.
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