It has been about a month since the last earnings report for BJ's Restaurants (BJRI Quick QuoteBJRI - Free Report) . Shares have added about 38% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is BJ's Restaurants due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

BJ's Restaurants Q2 Earnings Beat Estimates, Decline Y/Y

BJ's Restaurants reported second-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. However, the metrics declined on a year-over-year basis.

Earnings & Revenues

Adjusted net loss of 99 cents per share was narrower than the Zacks Consensus Estimate of a loss of $1.81. In the year-ago period, the company had reported adjusted earnings of 68 cents per share.

Total quarterly revenues of $128 million beat the consensus estimate of $126 million by 1.3%. However, the top line declined 57.5% on a year-over-year basis. Lower comparable restaurant sales led to the decline. However, total restaurant operating weeks increased approximately 1.3% from the prior-year quarter. Comparable restaurant sales declined 57.2% against 2% growth in the year-ago quarter.

Expenses & Operating Margins

Labor costs, as a percentage of sales, increased 420 basis points (bps) year over year to 40.2%. Occupancy and operating costs (as a percentage of sales) were 35.8% compared with 21.4% in the year-ago quarter. General and administrative expenses (as a percentage of sales) increased 600 bps to 11.3% in the quarter. Restaurant-level operating margin came in at (1%) against 17% in the year-ago quarter.

Store Count

Throughout May and June, BJ’s Restaurants reopened majority (or 95%) of its dining rooms with capacity limitations. However, entering July, counties across California ordered rollbacks of their dine-in re-opening plans. Resultantly, 70% of its dining rooms are operating with limited capacity.

With respect to unit expansion, BJ's Restaurants chief executive officer, Greg Trojan stated, “While we have canceled or delayed all but one of our remaining new restaurant openings for fiscal 2020 due to the effects of the COVID-19 pandemic, we remain confident in the long-term opportunity to expand the BJ’s concept to at least 425 restaurants nationally.”

As of Jun 30, 2020, BJ’s Restaurants owned and operated 209 casual dining restaurants (in 29 states), out of which one is temporarily closed due to the COVID-19 crisis.

Balance Sheet

As of Jun 30, 2020, cash and cash equivalents totaled $86.7 million compared with $22.4 million on Dec 31, 2019. Total debt increased to $166.8 million as of Jun 30, 2020, from $143 million at 2019-end.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 11.37% due to these changes.

VGM Scores

At this time, BJ's Restaurants has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, BJ's Restaurants has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.