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Will High Costs Hurt BJ's Restaurants (BJRI) in Q4 Earnings?

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BJ's Restaurants, Inc. (BJRI - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 20, after market close. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 80%. Its earnings beat estimates in two of the trailing four quarters.

How Are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 44 cents, which suggests a decline from 49 cents registered in the year-ago quarter. For quarterly revenues, the consensus mark is pegged at nearly $292 million. The figure suggests 3.9% increase from the prior-year quarter’s reported figure.

Let’s take a look at how BJ's Restaurants’ revenues and earnings will shape up in the to-be-reported quarter.

BJ's Restaurants, Inc. Price and EPS Surprise

 

BJ's Restaurants, Inc. Price and EPS Surprise

BJ's Restaurants, Inc. price-eps-surprise | BJ's Restaurants, Inc. Quote

 

Factors at Play

BJ's Restaurants fourth-quarter top line is likely to have benefited from menu innovation, enhanced loyalty program, digitalization, focus on productivity and efficiency along with restaurant opening.

Owing to initiatives such as advanced cooking methods and modification of restaurant services, the company is expected to have witnessed off-premise sales growth in the to-be-reported quarter. Moreover, its promotional offers along with bundled lunch offerings are likely to have boosted sales and driven guest traffic.

However, despite various positives such as cost-saving initiatives, higher marketing expenses and costs related to sales-boosting initiatives are expected to have put pressure on BJ’s Restaurants’ margins in the to be reported quarter. The company is also facing high general and administrative expenses.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for BJ's Restaurants this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. This is not the case here, as you will see below.

Earnings ESP: BJ's Restaurants has an Earnings ESP of 3.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combinations

Here are some companies in the Zacks Retail And Wholesale sector that investors may consider as our model shows that these have the right combination of elements to post earnings beat in the fourth quarter:

Rite Aid Corporation (RAD - Free Report) has an Earnings ESP of +33.33% and a Zacks Rank #1.

Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +0.79% and a Zacks Rank #2.

The Wendy's Company (WEN - Free Report) has an Earnings ESP of +8.00% and a Zacks Rank #3.

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