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BJ's Restaurants (BJRI) Shares Up 21% YTD: More Room to Run?
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BJ's Restaurants, Inc. (BJRI - Free Report) is poised to benefit from its off-premise services, expansion efforts and menu rationalization. Also, focus on remodelling initiative bodes well.
So far this year, shares of BJ's Restaurants have gained 20.6% compared with the industry’s 9.8% growth. The price performance was backed by a solid earnings surprise history. BJ's Restaurants earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Earnings estimates for 2023 have moved up 2.9% in the past 60 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong Buy). This indicates robust fundamentals and an expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Driving Growth
The company’s off-premise sales continue to drive growth and more than doubled in comparison with the pre-pandemic level. Offerings such as individually-portioned group meals, expanded family feast and bundle offerings have been a major contributor to its off-premise sales.
Image Source: Zacks Investment Research
The company is working on several initiatives to boost its off-premise experience. To this end, BJRI initiated the piloting of a digital order tracker and integrated it with the digital curbside check-in portal. The initiative provides real-time progress information for guests ordering take-out, curbside and white-label delivery. The company is optimistic in this regard and anticipates the initiative to reduce friction throughout the guest experience and optimize all channels, including take-out, curbside pickup and delivery, thereby paving a path for growth in the upcoming periods.
The company continues to open additional restaurants to support top-line growth and margin improvements. Year to date (through Apr 4, 2023), the company has opened two new restaurants (in Orland Park, IL and San Antonio, TX) and reported average weekly sales of approximately $150,000. The company stated that its new restaurants (from 2022 and 2023-to date) have delivered average weekly sales of more than 20% than those of its other restaurants. The company expects to open three additional new restaurants in fiscal 2023.
Increased focus on remodelling initiative bodes well. Year to date (through Apr 27, 2023), the company completed 14 remodels and reported solid performance with respect to the same. Following the less expensive remodels, restaurants are increasing their weekly revenues by more than $1500 on average. The remodels include additional booths, better lighting, artwork and other improvements. The business also recorded significant contributions from renovations with broader scopes, including the modifications to the bars. Backed with increased visitation, the business plans to move forward with remodels based on the particular restaurant. The company intends to expand its remodel initiative to more than 30 restaurants in fiscal 2023.
BJ’s Restaurants continues to focus on menu rationalization to drive growth. To provide value options for its customers while maintaining a higher price strategy with its craveable and distinctive proteins, the company — up to this point — has maintained its daily brew house specials lunch menu and happy hour prices. Moving ahead, management plans to introduce a new menu featuring 10% fewer items. The initiative is likely to pave a path for improvement in daily execution, reduction in inventory and streamlining of kitchen operations.
Other Top Picks
Some other top-ranked stocks in the Retail-Wholesale sector include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1. PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 43.8% in the past year.
The Zacks Consensus Estimate for PLAY’s 2023 sales and earnings per share (EPS) indicates a rise of 16.9% and 28%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 69.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 97.9% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27.7%, respectively, from the year-ago period’s levels.
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BJ's Restaurants (BJRI) Shares Up 21% YTD: More Room to Run?
BJ's Restaurants, Inc. (BJRI - Free Report) is poised to benefit from its off-premise services, expansion efforts and menu rationalization. Also, focus on remodelling initiative bodes well.
So far this year, shares of BJ's Restaurants have gained 20.6% compared with the industry’s 9.8% growth. The price performance was backed by a solid earnings surprise history. BJ's Restaurants earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Earnings estimates for 2023 have moved up 2.9% in the past 60 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong Buy). This indicates robust fundamentals and an expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Driving Growth
The company’s off-premise sales continue to drive growth and more than doubled in comparison with the pre-pandemic level. Offerings such as individually-portioned group meals, expanded family feast and bundle offerings have been a major contributor to its off-premise sales.
Image Source: Zacks Investment Research
The company is working on several initiatives to boost its off-premise experience. To this end, BJRI initiated the piloting of a digital order tracker and integrated it with the digital curbside check-in portal. The initiative provides real-time progress information for guests ordering take-out, curbside and white-label delivery. The company is optimistic in this regard and anticipates the initiative to reduce friction throughout the guest experience and optimize all channels, including take-out, curbside pickup and delivery, thereby paving a path for growth in the upcoming periods.
The company continues to open additional restaurants to support top-line growth and margin improvements. Year to date (through Apr 4, 2023), the company has opened two new restaurants (in Orland Park, IL and San Antonio, TX) and reported average weekly sales of approximately $150,000. The company stated that its new restaurants (from 2022 and 2023-to date) have delivered average weekly sales of more than 20% than those of its other restaurants. The company expects to open three additional new restaurants in fiscal 2023.
Increased focus on remodelling initiative bodes well. Year to date (through Apr 27, 2023), the company completed 14 remodels and reported solid performance with respect to the same. Following the less expensive remodels, restaurants are increasing their weekly revenues by more than $1500 on average. The remodels include additional booths, better lighting, artwork and other improvements. The business also recorded significant contributions from renovations with broader scopes, including the modifications to the bars. Backed with increased visitation, the business plans to move forward with remodels based on the particular restaurant. The company intends to expand its remodel initiative to more than 30 restaurants in fiscal 2023.
BJ’s Restaurants continues to focus on menu rationalization to drive growth. To provide value options for its customers while maintaining a higher price strategy with its craveable and distinctive proteins, the company — up to this point — has maintained its daily brew house specials lunch menu and happy hour prices. Moving ahead, management plans to introduce a new menu featuring 10% fewer items. The initiative is likely to pave a path for improvement in daily execution, reduction in inventory and streamlining of kitchen operations.
Other Top Picks
Some other top-ranked stocks in the Retail-Wholesale sector include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1. PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 43.8% in the past year.
The Zacks Consensus Estimate for PLAY’s 2023 sales and earnings per share (EPS) indicates a rise of 16.9% and 28%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 9.5%. The stock has rallied 69.7% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests growth of 13.4% and 4.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 97.9% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 9.9% and 27.7%, respectively, from the year-ago period’s levels.