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BJ's Restaurants Opens Outlet in Ohio, Eyes Sales Growth
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BJ’s Restaurants, Inc. (BJRI - Free Report) announced the opening of its 5th and last restaurant in 2018. The company launched a restaurant in Cincinnati, OH, which marks 12th BJ’s outlet in the state. Situated on the Edmondson Road, an open-air shopping destination, the restaurant seats roughly 230 guests and serves the company’s signature menu offerings.
The company’s expansion strategies, coupled with major sales-building efforts, have been reaping benefits of late. Subsequently, shares of BJ’s Restaurants have gained 71.5% over the past year, outperforming the industry’s rally of 12.4%.
Sales-Building Initiatives — Key Growth Driver
The restaurant launch is part of BJ’s Restaurants’ strategies to drive incremental revenues. In 2019, the company plans to open seven to nine restaurants. Beside expansion, the company implemented other initiatives like increased focus on productivity and efficiency, along with a plan of balanced restaurant opening that would drive operating results.
In 2017, the restaurant crew mastered advanced cooking methods and also became skillful in taking orders via hand-held ordering tablets. In fact, results of these initiatives have been positive so far. Notably, in the third quarter of 2018, off-premise sales increased to 8.7% of the company’s revenues. Further, BJ’s Restaurants also expects this channel to grow by at least 50% over the next several years.
Additionally, the restaurant developed a robust pipeline of new menu items, focusing on its EnLIGHTened menu category, featuring its new super food options. Moving ahead, the company plans to introduce new flavors and improve the quality of its menu items.
Our Take
We believe that the continual expansion strategy would help the company further bolster top-line growth. However, while several other restaurateurs —including Yum! Brands (YUM - Free Report) , McDonald’s (MCD - Free Report) and Domino’s (DPZ - Free Report) — are capitalizing on the emerging market potential, BJ’s Restaurants seems to be slow on this front. We believe that the company needs to spread its presence beyond the United States in order to offset the impact of cutthroat competition in the saturated domestic market.
Nevertheless, expansion and innovation across delivery, menu and digital offerings led third-quarter 2018 revenues to grow 9.4% year over year. Comparable restaurant sales in the quarter increased 6.9%, which marked highest growth in the last 29 quarters. The uptick was driven by a 2.6% increase in guest traffic and rise in average check.
Moreover, according to the Zacks Consensus Estimate, revenues for both 2018 and 2019 are likely to increase by 8% and 5%, respectively.
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BJ's Restaurants Opens Outlet in Ohio, Eyes Sales Growth
BJ’s Restaurants, Inc. (BJRI - Free Report) announced the opening of its 5th and last restaurant in 2018. The company launched a restaurant in Cincinnati, OH, which marks 12th BJ’s outlet in the state. Situated on the Edmondson Road, an open-air shopping destination, the restaurant seats roughly 230 guests and serves the company’s signature menu offerings.
The company’s expansion strategies, coupled with major sales-building efforts, have been reaping benefits of late. Subsequently, shares of BJ’s Restaurants have gained 71.5% over the past year, outperforming the industry’s rally of 12.4%.
Sales-Building Initiatives — Key Growth Driver
The restaurant launch is part of BJ’s Restaurants’ strategies to drive incremental revenues. In 2019, the company plans to open seven to nine restaurants. Beside expansion, the company implemented other initiatives like increased focus on productivity and efficiency, along with a plan of balanced restaurant opening that would drive operating results.
In 2017, the restaurant crew mastered advanced cooking methods and also became skillful in taking orders via hand-held ordering tablets. In fact, results of these initiatives have been positive so far. Notably, in the third quarter of 2018, off-premise sales increased to 8.7% of the company’s revenues. Further, BJ’s Restaurants also expects this channel to grow by at least 50% over the next several years.
Additionally, the restaurant developed a robust pipeline of new menu items, focusing on its EnLIGHTened menu category, featuring its new super food options. Moving ahead, the company plans to introduce new flavors and improve the quality of its menu items.
Our Take
We believe that the continual expansion strategy would help the company further bolster top-line growth. However, while several other restaurateurs —including Yum! Brands (YUM - Free Report) , McDonald’s (MCD - Free Report) and Domino’s (DPZ - Free Report) — are capitalizing on the emerging market potential, BJ’s Restaurants seems to be slow on this front. We believe that the company needs to spread its presence beyond the United States in order to offset the impact of cutthroat competition in the saturated domestic market.
Nevertheless, expansion and innovation across delivery, menu and digital offerings led third-quarter 2018 revenues to grow 9.4% year over year. Comparable restaurant sales in the quarter increased 6.9%, which marked highest growth in the last 29 quarters. The uptick was driven by a 2.6% increase in guest traffic and rise in average check.
Moreover, according to the Zacks Consensus Estimate, revenues for both 2018 and 2019 are likely to increase by 8% and 5%, respectively.
BJ’s Restaurants currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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