[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements and related disclosures for the specified periods [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Presents BJ's Restaurants, Inc.'s unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and shareholders' equity, at specific dates | Assets (in thousands) | July 2, 2024 (Unaudited) | January 2, 2024 | | :-------------------- | :----------------------- | :-------------- | | Cash and cash equivalents | $16,185 | $29,070 | | Accounts and other receivables, net | $15,616 | $19,469 | | Inventories, net | $13,380 | $13,245 | | Prepaid expenses and other current assets | $14,869 | $21,237 | | **Total current assets** | **$60,050** | **$83,021** | | Property and equipment, net | $529,190 | $525,190 | | Operating lease assets | $347,456 | $350,091 | | Goodwill | $4,673 | $4,673 | | Equity method investment | $4,477 | $4,770 | | Deferred income taxes, net | $54,978 | $50,147 | | Other assets, net | $43,312 | $40,562 | | **Total assets** | **$1,044,136** | **$1,058,454** | | | | | | Liabilities and Shareholders' Equity | | | | Current liabilities: | | | | Accounts payable | $50,617 | $60,641 | | Accrued expenses | $88,858 | $101,295 | | Current operating lease obligations | $32,279 | $37,389 | | **Total current liabilities** | **$171,754** | **$199,325** | | Long-term operating lease obligations | $409,015 | $414,114 | | Long-term debt | $63,500 | $68,000 | | Other liabilities | $13,378 | $11,254 | | **Total liabilities** | **$657,647** | **$692,693** | | Shareholders' equity: | | |\ | Capital surplus | $72,037 | $77,036 | | Retained earnings | $314,452 | $288,725 | | **Total shareholders' equity** | **$386,489** | **$365,761** | | **Total liabilities and shareholders' equity** | **$1,044,136** | **$1,058,454** | [Unaudited Consolidated Statements of Operations](index=3&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income for the specified interim periods | (In thousands, except per share data) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Revenues | $349,927 | $349,670 | $687,261 | $690,950 | | Total costs and expenses | $336,706 | $339,458 | $665,782 | $678,122 | | Income from operations | $13,221 | $10,212 | $21,479 | $12,828 | | Net income | $17,157 | $11,932 | $24,880 | $15,413 | | Net income per share: | | | | | | Basic | $0.74 | $0.51 | $1.07 | $0.66 | | Diluted | $0.72 | $0.50 | $1.04 | $0.64 | [Unaudited Consolidated Statements of Shareholders' Equity](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Details changes in the company's shareholders' equity, including net income and share repurchases, over specified periods | (In thousands) | Shares (23,138 as of July 2, 2024) | Common Stock Amount | Capital Surplus | Retained Earnings | Total | | :------------- | :--------------------------------- | :------------------ | :-------------- | :---------------- | :---- | | Balance, January 2, 2024 | 23,184 | $— | $77,036 | $288,725 | $365,761 | | Net income | — | — | — | 24,880 | 24,880 | | Balance, July 2, 2024 | 23,138 | $— | $72,037 | $314,452 | $386,489 | [Unaudited Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Reports the company's cash inflows and outflows from operating, investing, and financing activities for the specified periods | Cash Flows (in thousands) | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------ | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | $42,532 | $41,600 | | Net cash used in investing activities | $(41,349) | $(52,908) | | Net cash used in financing activities | $(14,068) | $(7,512) | | Net decrease in cash and cash equivalents | $(12,885) | $(18,820) | | Cash and cash equivalents, beginning of period | $29,070 | $24,873 | | Cash and cash equivalents, end of period | $16,185 | $6,053 | [Notes to Unaudited Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the accounting policies and specific line items within the financial statements [1. BASIS OF PRESENTATION](index=7&type=section&id=1.%20BASIS%20OF%20PRESENTATION) Explains the basis for preparing the unaudited consolidated financial statements in accordance with U.S. GAAP and SEC rules - The unaudited consolidated financial statements include BJ's Restaurants, Inc. and its wholly-owned subsidiaries, prepared in accordance with U.S. GAAP for interim financial information and SEC rules. Management's estimates and assumptions are used, and actual results may differ[14](index=14&type=chunk) [2. REVENUE RECOGNITION](index=8&type=section&id=2.%20REVENUE%20RECOGNITION) Describes the company's policies for recognizing revenue from food and beverage sales, gift cards, and loyalty programs - Revenues are primarily from food and beverage sales, including takeout, delivery, and catering. Gift card sales are recognized upon redemption, with estimated breakage recognized proportionally to historical redemption patterns. The 'BJ's Premier Rewards Plus' loyalty program defers revenue until points are redeemed[15](index=15&type=chunk) Gift Card and Deferred Loyalty Liability (in thousands) | Liability (in thousands) | July 2, 2024 | January 2, 2024 | | :----------------------- | :----------- | :-------------- | | Gift card liability | $10,285 | $14,380 | | Deferred loyalty revenue | $2,771 | $2,510 | Revenue Recognized (in thousands) | Revenue Recognized (in thousands) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | From gift card liability | $2,039 | $2,186 | $7,903 | $8,430 | | From guest loyalty program | $996 | $1,227 | $5,313 | $5,309 | [3. LEASES](index=8&type=section&id=3.%20LEASES) Outlines the company's accounting treatment for operating leases, primarily for restaurant locations and office space - All material operating leases for restaurant locations and office space are classified as operating leases. The Company has elected to account for lease and non-lease components as a single lease component for office and beverage gas equipment[17](index=17&type=chunk)[18](index=18&type=chunk) Lease Costs (in thousands) | Lease Costs (in thousands) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------- | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Lease cost | $14,442 | $14,788 | $28,831 | $29,684 | | Variable lease cost | $997 | $1,417 | $1,792 | $2,407 | | **Total lease costs** | **$15,439** | **$16,205** | **$30,623** | **$32,091** | [4. LONG-TERM DEBT](index=10&type=section&id=4.%20LONG-TERM%20DEBT) Details the company's credit facility, outstanding debt, interest rates, and compliance with debt covenants - The Company's Credit Facility matures on November 3, 2026, providing **$215 million** in revolving loan commitments. As of July 2, 2024, **$63.5 million** was outstanding, with **$134.3 million** available to borrow. The weighted average interest rate for the twenty-six weeks ended July 2, 2024, was approximately **6.9%**, up from **6.6%** in the prior year[19](index=19&type=chunk) - Interest expense and commitment fees under the Credit Facility were approximately **$2.7 million** for the twenty-six weeks ended July 2, 2024, compared to **$2.2 million** for the prior year period. The Company was in compliance with all covenants as of July 2, 2024[19](index=19&type=chunk) [5. NET INCOME PER SHARE](index=10&type=section&id=5.%20NET%20INCOME%20PER%20SHARE) Provides the calculation of basic and diluted net income per share, including the impact of equity awards Net Income Per Share Data (in thousands, except per share data) | (In thousands, except per share data) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Net income | $17,157 | $11,932 | $24,880 | $15,413 | | Weighted-average shares outstanding – basic | 23,309 | 23,539 | 23,313 | 23,510 | | Dilutive effect of equity awards | 612 | 432 | 641 | 451 | | Weighted-average shares outstanding – diluted | 23,921 | 23,971 | 23,954 | 23,961 | | Net income per share: | | | | | | Basic | $0.74 | $0.51 | $1.07 | $0.66 | | Diluted | $0.72 | $0.50 | $1.04 | $0.64 | - Approximately **1.0 million** equity awards for the twenty-six weeks ended July 2, 2024, and **0.9 million** for the prior year period, were excluded from diluted EPS calculation as they were anti-dilutive[21](index=21&type=chunk) [6. STOCK-BASED COMPENSATION](index=11&type=section&id=6.%20STOCK-BASED%20COMPENSATION) Describes the company's equity incentive plan, valuation methods for awards, and the recognition of stock-based compensation expense - The Company's stock-based compensation plan is the BJ's Restaurants, Inc. 2024 Equity Incentive Plan. Awards include incentive stock options, non-qualified stock options, and service-, performance-, and market-based RSUs. Fair values are determined using Black-Scholes for options and Monte Carlo for market-based RSUs[22](index=22&type=chunk) Stock-Based Compensation (in thousands) | Stock-Based Compensation (in thousands) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Labor and benefits | $529 | $410 | $1,037 | $1,276 | | General and administrative | $2,237 | $2,368 | $4,206 | $4,144 | | Capitalized | $79 | $95 | $163 | $189 | | **Total stock-based compensation** | **$2,845** | **$2,873** | **$5,406** | **$5,609** | - As of July 2, 2024, total unrecognized stock-based compensation expense was approximately **$3.1 million** for non-vested stock options (expected over three years), **$12.8 million** for service-based RSUs (expected over three to five years), and **$2.2 million** for market-based and performance-based RSUs (expected over three years)[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) [7. INCOME TAXES](index=15&type=section&id=7.%20INCOME%20TAXES) Discusses the effective income tax rate and unrecognized tax benefits for the specified periods - The effective income tax rate for the twenty-six weeks ended July 2, 2024, was a benefit of **11.7%**, a decrease from **35.0%** for the comparable prior-year period. This benefit is primarily due to significant Federal Insurance Contributions Act (FICA) tax tip credits[29](index=29&type=chunk) Unrecognized Tax Benefits (in thousands) | Unrecognized Tax Benefits (in thousands) | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :--------------------------------------- | :---------------------------------- | :---------------------------------- | | Beginning gross unrecognized tax benefits | $967 | $1,249 | | Increases for tax positions taken in the current year | $51 | $22 | | Decreases due to lapse of statute of limitations | $— | $(236) | | Ending gross unrecognized tax benefits | $1,018 | $1,035 | [8. LEGAL PROCEEDINGS](index=15&type=section&id=8.%20LEGAL%20PROCEEDINGS) Summarizes the company's involvement in various lawsuits and administrative proceedings common to the foodservice industry - The Company is subject to various lawsuits and administrative proceedings common to the foodservice industry, including claims from guests and team members. Management believes the final disposition of these claims will not materially adversely affect financial position, results of operations, or liquidity[31](index=31&type=chunk) [9. SHAREHOLDERS' EQUITY](index=17&type=section&id=9.%20SHAREHOLDERS'%20EQUITY) Details share repurchase activities and the company's policy regarding cash dividends - During the twenty-six weeks ended July 2, 2024, the Company repurchased and retired approximately **255,000 shares** of common stock for **$8.8 million** at an average price of **$34.70** per share. In February 2024, the Board approved a **$50 million** increase to the share repurchase program, leaving approximately **$52.2 million** available as of July 2, 2024[32](index=32&type=chunk) - The Company currently does not pay cash dividends, with any future payments subject to Board approval[33](index=33&type=chunk) [10. RELATED PARTY TRANSACTIONS](index=17&type=section&id=10.%20RELATED%20PARTY%20TRANSACTIONS) Discloses transactions and relationships with related parties, including an equity method investment - The Company holds a **20%** equity method investment in a company where its recently retired CEO and current Board member has a less than **1%** interest. For the twenty-six weeks ended July 2, 2024, a net loss of **$293,000** related to this investment was recorded, compared to **$100,000** in the prior year[34](index=34&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition and results of operations, covering business overview, revenue/expense analysis, liquidity, cash flows, and critical accounting policies [STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE](index=17&type=section&id=STATEMENT%20REGARDING%20FORWARD-LOOKING%20DISCLOSURE) Warns that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ - This section contains forward-looking statements about performance trends, growth plans, and business goals, identified by words like 'believe,' 'expect,' 'intend.' These statements are subject to risks and uncertainties that could cause actual results to differ materially[35](index=35&type=chunk) [GENERAL](index=17&type=section&id=GENERAL) Provides an overview of BJ's Restaurants' operations, including its restaurant count, menu offerings, and revenue recognition practices - BJ's Restaurants operates **216** casual dining restaurants in **31** states as of August 5, 2024, offering a broad menu including deep-dish pizza, slow-roasted entrees, and craft beers. Revenues are derived from food and beverage sales, including takeout, delivery, and catering, with gift card and loyalty program revenues recognized upon redemption[36](index=36&type=chunk)[37](index=37&type=chunk) - Comparable restaurant sales include restaurants open for at least **18 months**. Key cost components include cost of sales (food/beverage), labor and benefits (wages, taxes, stock-based compensation), occupancy and operating expenses (rent, utilities, marketing), general and administrative expenses (corporate functions), depreciation and amortization, and restaurant opening expenses[37](index=37&type=chunk) [RESULTS OF OPERATIONS](index=20&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including revenues, costs, and income from operations, for the reported periods Operating Results as Percentages of Total Revenues | (Expressed as percentages of total revenues) | Thirteen Weeks Ended July 2, 2024 | Thirteen Weeks Ended July 4, 2023 | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | :---------------------------------- | :---------------------------------- | | Revenues | 100.0 % | 100.0 % | 100.0 % | 100.0 % | | Cost of sales | 25.7 % | 25.9 % | 25.4 % | 26.3 % | | Labor and benefits | 36.1 % | 36.2 % | 36.6 % | 36.9 % | | Occupancy and operating | 22.7 % | 23.4 % | 22.8 % | 23.3 % | | General and administrative | 5.9 % | 6.1 % | 6.3 % | 5.9 % | | Depreciation and amortization | 5.2 % | 5.1 % | 5.2 % | 5.1 % | | Restaurant opening | 0.1 % | 0.1 % | 0.1 % | 0.2 % | | Loss on disposal and impairment of assets, net | 0.6 % | 0.3 % | 0.4 % | 0.5 % | | Total costs and expenses | 96.2 % | 97.1 % | 96.9 % | 98.1 % | | Income from operations | 3.8 % | 2.9 % | 3.1 % | 1.9 % | | Net income | 4.9 % | 3.4 % | 3.6 % | 2.2 % | [Thirteen Weeks Ended July 2, 2024 Compared to Thirteen Weeks Ended July 4, 2023](index=20&type=section&id=Thirteen%20Weeks%20Ended%20July%202,%202024%20Compared%20to%20Thirteen%20Weeks%20Ended%20July%204,%202023) Compares the company's financial performance for the thirteen-week periods, highlighting changes in revenues, costs, and income - Total revenues increased by **$0.3 million (0.1%)** to **$349.9 million**, driven by new restaurant sales (**$6.0 million**) offset by a **0.6%** decline in comparable restaurant sales (**$2.0 million**) and **$3.3 million** from closed restaurants. Comparable sales decreased due to a **3.0%** drop in guest traffic, partially offset by a **2.4%** increase in average check[42](index=42&type=chunk) - Cost of sales decreased by **$0.8 million (0.9%)** to **$89.8 million**, improving to **25.7%** of revenues (from **25.9%**) due to lower commodity costs and cost savings. Labor and benefits decreased by **$0.2 million (0.2%)** to **$126.3 million**, improving to **36.1%** of revenues (from **36.2%**) due to improved labor efficiency[42](index=42&type=chunk) - Occupancy and operating expenses decreased by **$2.3 million (2.9%)** to **$79.6 million**, improving to **22.7%** of revenues (from **23.4%**) due to lower facility and marketing expenses. Income from operations increased to **$13.2 million** from **$10.2 million** in the prior year[42](index=42&type=chunk)[7](index=7&type=chunk) [Twenty-Six Weeks Ended July 2, 2024 Compared to Twenty-Six Weeks Ended July 4, 2023](index=22&type=section&id=Twenty-Six%20Weeks%20Ended%20July%202,%202024%20Compared%20to%20Twenty-Six%20Weeks%20Ended%20July%204,%202023) Compares the company's financial performance for the twenty-six-week periods, detailing changes in revenues, costs, and income - Total revenues decreased by **$3.7 million (0.5%)** to **$687.3 million**, primarily due to a **1.1%** decline in comparable restaurant sales (**$7.6 million**) and **$8.5 million** from closed restaurants, partially offset by **$13.1 million** from new restaurants. Comparable sales decreased due to a **4.4%** drop in guest traffic, partially offset by a **3.3%** increase in average check[45](index=45&type=chunk) - Cost of sales decreased by **$6.7 million (3.7%)** to **$174.8 million**, improving to **25.4%** of revenues (from **26.3%**) due to lower commodity costs and cost savings. Labor and benefits decreased by **$3.5 million (1.4%)** to **$251.3 million**, improving to **36.6%** of revenues (from **36.9%**) due to improved labor efficiency[45](index=45&type=chunk)[46](index=46&type=chunk) - General and administrative expenses increased by **$2.7 million (6.6%)** to **$43.6 million**, rising to **6.3%** of revenues (from **5.9%**) due to increased legal fees (**$1.7 million**) related to shareholder cooperation agreements and corporate expenses. Income from operations increased to **$21.5 million** from **$12.8 million** in the prior year[46](index=46&type=chunk)[7](index=7&type=chunk) [LIQUIDITY AND MATERIAL CASH REQUIREMENTS](index=25&type=section&id=LIQUIDITY%20AND%20MATERIAL%20CASH%20REQUIREMENTS) Discusses the company's financial resources, working capital, and strategies for funding operations and growth initiatives Liquidity Measurements (in thousands) | Liquidity Measurements (in thousands) | July 2, 2024 | January 2, 2024 | | :------------------------------------ | :----------- | :-------------- | | Cash and cash equivalents | $16,185 | $29,070 | | Net working capital | $(111,704) | $(116,304) | | Current ratio | 0.3:1.0 | 0.4:1.0 | - The Company aims to improve shareholder return through new restaurant expansion, existing restaurant enhancements, and share repurchases, maintaining a flexible balance sheet. Current cash, operations, and credit availability are expected to meet capital and working capital needs for at least the next twelve months[48](index=48&type=chunk) [CASH FLOWS](index=25&type=section&id=CASH%20FLOWS) Analyzes the company's cash generation and usage across operating, investing, and financing activities Cash Flows (in thousands) | Cash Flows (in thousands) | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :------------------------ | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | $42,532 | $41,600 | | Net cash used in investing activities | $(41,349) | $(52,908) | | Net cash used in financing activities | $(14,068) | $(7,512) | | Net decrease in cash and cash equivalents | $(12,885) | $(18,820) | - Operating cash flows increased by **$0.9 million** to **$42.5 million**, driven by improved net income and timing of receivables, offset by timing of payables and accrued expenses. Investing cash flows decreased by **$11.6 million** to **$41.3 million** used, primarily due to the timing of new restaurant construction and remodels[50](index=50&type=chunk)[51](index=51&type=chunk) Capital Expenditures (in thousands) | Capital Expenditures (in thousands) | Twenty-Six Weeks Ended July 2, 2024 | Twenty-Six Weeks Ended July 4, 2023 | | :---------------------------------- | :---------------------------------- | :---------------------------------- | | New restaurants | $15,406 | $20,970 | | Restaurant maintenance and remodels, and key productivity initiatives | $25,391 | $31,050 | | Restaurant and corporate systems | $552 | $892 |\ | **Total capital expenditures** | **$41,349** | **$52,912** | - The Company plans to open **three** new restaurants in fiscal 2024, with total capital expenditures estimated at **$70 million to $75 million**, funded by cash, operations, and the line of credit[52](index=52&type=chunk) [Financing Cash Flows](index=27&type=section&id=Financing%20Cash%20Flows) Focuses on the cash flows related to debt, equity, and other financing activities - Net cash used in financing activities increased by **$6.6 million** to **$14.1 million** for the twenty-six weeks ended July 2, 2024, primarily due to increased payments on the line of credit[53](index=53&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=27&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) States the absence of any off-balance sheet arrangements or transactions with unconsolidated entities - As of July 2, 2024, the Company is not involved in any off-balance sheet arrangements or transactions with unconsolidated entities or financial partnerships[54](index=54&type=chunk) [IMPACT OF INFLATION](index=27&type=section&id=IMPACT%20OF%20INFLATION) Discusses how inflation affects operations and construction, and the company's mitigation strategies - Inflation has impacted operations and new restaurant construction. The Company has partially offset these effects through menu price increases, cost savings, and efficiency improvements, but there's no assurance this will continue. Macroeconomic conditions affecting consumer spending could limit future price increases[55](index=55&type=chunk) [SEASONALITY AND ADVERSE WEATHER](index=27&type=section&id=SEASONALITY%20AND%20ADVERSE%20WEATHER) Explains how seasonal factors and adverse weather conditions can influence the company's business and quarterly results - The business is affected by weather and seasonal factors, including holidays and severe weather, which can impact sales volumes. Quarterly results are also significantly influenced by the timing of new restaurant openings and associated expenses[56](index=56&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=27&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Highlights the key accounting policies that require significant management estimates and judgments - Financial statements require estimates and assumptions based on current facts and historical experience. Management continuously reviews these estimates, acknowledging that actual results may differ materially. No significant changes to critical accounting policies occurred during the twenty-six weeks ended July 2, 2024[57](index=57&type=chunk)[58](index=58&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Discusses the Company's exposure to market risks, specifically interest rate risk and food, supplies, and commodity price risks, and outlines strategies for managing these risks [Interest Rate Risk](index=29&type=section&id=Interest%20Rate%20Risk) Addresses the company's exposure to fluctuations in interest rates, particularly concerning its floating-rate credit facility - The Company is exposed to interest rate risk through its **$215 million** Credit Facility, which has a floating interest rate. With **$63.5 million** currently outstanding, a hypothetical **1%** change in interest rates would impact net income by approximately **$0.5 million** annually[60](index=60&type=chunk) [Food, Supplies and Commodity Price Risks](index=29&type=section&id=Food,%20Supplies%20and%20Commodity%20Price%20Risks) Discusses the company's vulnerability to volatile food, supplies, and commodity prices and its mitigation strategies - The Company faces volatility in food, supplies, and commodity prices due to market factors and government regulation. To mitigate this, it enters into fixed-price purchase commitments (typically up to one year) for some commodities and maintains flexibility to adjust menu prices or items. The Company does not use financial instruments to hedge commodity prices[61](index=61&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the second fiscal quarter [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as assessed by management - The CEO and CFO concluded that, as of July 2, 2024, the Company's disclosure controls and procedures are designed and effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[62](index=62&type=chunk) [Changes in Internal Control Over Financial Reporting](index=29&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports that no material changes occurred in the company's internal control over financial reporting during the second fiscal quarter - There have been no material changes in the Company's internal control over financial reporting during the second fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[63](index=63&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report under Item 5 - No other information is reported under Item 5[63](index=63&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8 of the Unaudited Consolidated Financial Statements for a summary of legal proceedings - For a summary of legal proceedings, refer to Note 8 of the Notes to Unaudited Consolidated Financial Statements in Part I, Item 1 of this report[64](index=64&type=chunk) [Item 1A. Risk Factors](index=31&type=page&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes have occurred from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended January 2, 2024[65](index=65&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's share repurchase activities, including the total value of shares repurchased since inception, recent repurchases during the twenty-six weeks ended July 2, 2024, and the remaining authorization under the share repurchase program - As of July 2, 2024, the Company has cumulatively repurchased approximately **$497.8 million** in shares since the program's inception in 2014. During the twenty-six weeks ended July 2, 2024, **$8.8 million** in shares were repurchased and retired[66](index=66&type=chunk) - In February 2024, the Board of Directors approved a **$50 million** increase to the share repurchase program, leaving approximately **$52.2 million** available under the authorized **$550 million** program as of July 2, 2024[66](index=66&type=chunk) Share Repurchase Details | Period (1) | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of the Publicly Announced Plans | Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :--------------------------------------------------------------------------- | | 01/03/24 - 01/30/24 | — | $— | — | $11,055,206 | | 01/31/24 - 02/27/24 | — | $— | — | $61,055,206 | | 02/28/24 - 04/02/24 | — | $— | — | $61,055,206 | | 04/03/24 - 04/30/24 | — | $— | — | $61,055,206 | | 05/01/24 - 05/28/24 | 86,960 | $34.54 | 86,960 | $58,051,544 | | 05/29/24 - 07/02/24 | 167,665 | $34.78 | 167,665 | $52,220,358 | | **Total** | **254,625** | | **254,625** | | [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate organizational documents, stock certificates, and certifications from the Chief Executive Officer and Chief Financial Officer - Exhibits include Amended and Restated Articles of Incorporation and Bylaws, Certificate of Amendment of Articles of Incorporation, Specimen Common Stock Certificate, Section 302 and 906 Certifications of CEO and CFO, and Inline XBRL documents[68](index=68&type=chunk)[69](index=69&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) Confirms the official signing and submission of the report by authorized executives - The report was duly caused to be signed on behalf of BJ's Restaurants, Inc. on August 5, 2024, by Gregory S. Levin (Chief Executive Officer and President), Thomas A. Houdek (Senior Vice President and Chief Financial Officer), and Jacob J. Guild (Senior Vice President and Chief Accounting Officer)[70](index=70&type=chunk)

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Core Viewpoint - BJ's Restaurants, Inc. reported Q2 results that exceeded Wall Street expectations, showcasing improved profitability despite a challenging industry backdrop and cost inflation [5][10][15]. Financial Performance - Revenues for Q2 2024 were reported at $349.9 million, slightly above the previous year's $349.7 million, with comparable restaurant sales declining by 0.6% [20]. - Income from operations increased to $13.2 million from $10.2 million in the prior year's Q2, reflecting effective cost management [8][10]. - Total costs and expenses were $336.7 million, down from $339.5 million year-on-year, indicating improved cost control [4]. Cost Management Initiatives - The company has implemented significant cost management initiatives, aiming for $50 million in savings from general and administrative expenses, labor, and purchasing [9]. - Occupancy and operating costs were effectively managed, showing a 0.7 percentage point decrease year-on-year [8]. Growth Strategy - BJ's has grown its total units from 29 in 2000 to 216 by Q2 2024, with a long-term goal of reaching 425 units [7]. - The company plans to focus on restaurant-level improvements and has remodeled several locations based on customer feedback [7][19]. Future Outlook - Long-term targets include annual sales growth of 7-10% and EPS growth of 12-15%, with expectations for an acceleration in new unit openings from 2025 [19]. - The stock is estimated to be slightly undervalued, with a fair value estimate of $39.71, 8% above the current stock price [12][23].

In the quarter under review, the company reported adjusted earnings per share (EPS) of 72 cents, beating the Zacks Consensus Estimate of 49 cents. In the year-ago quarter, it recorded an adjusted EPS of 50 cents. BJRI opened one new restaurant have opened one new restaurant in Brookfield, Wisconsin and is set to open two more in August and September 2024. The new locations will feature a new prototype, costing approximately $1 million less than the previous design, offering greater operational efficiency an ...

Financial Data and Key Metrics Changes - The company reported total sales of $349.9 million for Q2 2024, with comparable sales slightly negative at 0.6% [19][53] - Adjusted EBITDA increased to $36.1 million, a 13% rise year-over-year, with a margin of 10.3% [20][54] - Restaurant-level cash flow margin improved to 15.5%, up 100 basis points from the previous year [29][44] - Net income for the quarter was $17.2 million, with diluted net income per share of $0.72, both up over 40% from a year ago [54] Business Line Data and Key Metrics Changes - The company initiated an enhanced service model in April, aimed at improving pace and throughput in restaurants [21][24] - Food costs increased by more than 2% quarter-over-quarter, driven by inflation on key items such as chicken wings and avocados [32][135] - Labor and benefits expenses were 36.1% of sales, which was 10 basis points favorable compared to the same quarter last year [32] Market Data and Key Metrics Changes - The company experienced month-over-month improvement in comparable sales throughout Q2, driven by consumer affinity for the BJ's concept [19] - The average weekly sales per restaurant exceeded $124,000, with a record of over $141,000 during the week including Mother's Day [30][53] - The company expects Q3 comparable sales to be in the 1% to 2% range, considering recent trends and seasonal patterns [84] Company Strategy and Development Direction - The long-term model aims for 8% to 10% top-line sales growth through a combination of over 5% unit growth and low to mid-single-digit comparable restaurant sales [27] - The company is focused on enhancing brand awareness and operational excellence through various initiatives, including remodels and new restaurant prototypes [18][25] - The company plans to continue investing in marketing to drive traffic and brand awareness, with an expected increase in marketing costs for Q3 [58][172] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer demand remains stable, with adjustments needed due to external factors like minimum wage increases [2][19] - The company is optimistic about closing the gap to 2019 margin levels by year-end, despite challenges in the operating environment [34][167] - Management highlighted the importance of maintaining quality while pursuing growth, indicating a cautious approach to unit expansion [71][100] Other Important Information - The company completed 19 remodels year-to-date and plans to complete approximately five more by the end of the year [49] - The new restaurant prototype is expected to cost about $1 million less to build, enhancing operating efficiencies [26] - The company repurchased approximately 255,000 shares at a cost of $8.8 million during the quarter [57] Q&A Session Summary Question: Can you elaborate on the restaurant-level margin levels compared to 2019? - Management indicated that they aim to close the gap to 2019 levels, with a focus on improving operational efficiencies [4][167] Question: What are the dynamics affecting labor costs and training investments? - Management acknowledged that the new service model introduced one-time training costs, impacting margins slightly [32][62] Question: How do you view the sales outlook for Q3, considering the calendar shifts? - Management expects Q3 comparable sales to be modestly positive, with some challenges due to the holiday calendar [64][84] Question: What is the company's strategy for unit growth moving forward? - Management emphasized a cautious approach to unit growth, aiming for quality over quantity, with a goal of gradually increasing to 5% growth [71][100] Question: How is the company addressing food cost inflation? - Management noted that food costs have increased, particularly for chicken wings and avocados, and they are monitoring these trends closely [32][135]

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. View all Key Company Metrics for BJ's Restaurants here>>> The reported revenue compares to the Zacks Consensus Estimate of $350.18 million, representing a surprise of -0.07%. The company delivered an EPS surprise of +46.94%, with the consensus EPS estimate being $0.49. Comparable restau ...

BJ's Restaurants (BJRI) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.50 per share a year ago. These figures are adjusted for non-recurring items. Over the last four quarters, the company has surpassed consensus EPS estimates three times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary ...

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) BJ's Restaurants reported a slight revenue increase to $349.9 million, with net income up 44.5% to $17.2 million and diluted EPS at $0.72, driven by improved operating margins Q2 2024 Key Financial Metrics vs. Q2 2023 | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $349.9 million | $349.7 million | +0.1% | | Comparable Restaurant Sales | -0.6% | +4.7% | -5.3 p.p. | | Net Income | $17.2 million | $11.9 million | +44.5% | | Diluted Net Income per Share | $0.72 | $0.50 | +$0.22 | | Adjusted EBITDA | $36.1 million | $31.8 million | +13.5% | - After a soft start in April, comparable restaurant sales trends improved throughout the second quarter, with approximately half of the restaurants setting sales records around Mother's Day, Father's Day, and graduations[2](index=2&type=chunk) - Productivity initiatives led to a **100 basis point** year-over-year increase in restaurant-level operating margins, which reached **15.5%**[2](index=2&type=chunk) [Business Update & Outlook](index=1&type=section&id=Business%20Update%20%26%20Outlook) The company is expanding with new, cost-effective restaurant prototypes and remodels, targeting $70-$75 million in 2024 capital expenditures, prioritizing growth and shareholder returns - The company opened one new restaurant in H1 2024 and plans to open two more in H2 2024. Future restaurants will use a new prototype that costs approximately **$1 million less** to build[3](index=3&type=chunk) - By the end of 2024, about **50% of BJ's restaurants** will either be a newer prototype or have been recently remodeled, enhancing the brand's appeal[3](index=3&type=chunk) - Capital allocation priorities are focused on growth initiatives and returning capital to shareholders. In Q2 2024, the company repurchased **255,000 shares for $8.8 million**, with **$52 million** remaining under its repurchase program[17](index=17&type=chunk)[18](index=18&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents detailed unaudited financial results for Q2 and H1 2024, including statements of operations, balance sheet data, and key operating metrics [Unaudited Consolidated Statements of Operations](index=2&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Q2 2024 total revenues were $349.9 million, with improved cost management leading to increased income from operations of $13.2 million and net income of $17.2 million, or $0.72 diluted EPS Q2 Statement of Operations Highlights (in thousands) | Account | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues | $349,927 | $349,670 | | Cost of Sales | $89,836 | $90,614 | | Labor and Benefits | $126,309 | $126,522 | | Income from Operations | $13,221 | $10,212 | | Net Income | $17,157 | $11,932 | | Diluted EPS | $0.72 | $0.50 | Six Months Statement of Operations Highlights (in thousands) | Account | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | | Total Revenues | $687,261 | $690,950 | | Income from Operations | $21,479 | $12,828 | | Net Income | $24,880 | $15,413 | | Diluted EPS | $1.04 | $0.64 | [Selected Consolidated Balance Sheet Information](index=3&type=section&id=Selected%20Consolidated%20Balance%20Sheet%20Information) As of July 2, 2024, the company reported total assets of $1.044 billion, total debt of $63.5 million, and shareholders' equity of $386.5 million, an increase from fiscal 2023 Balance Sheet Data (in thousands) | Account | July 2, 2024 | 2023 Year-End | | :--- | :--- | :--- | | Total Assets | $1,044,136 | $1,058,454 | | Total Debt | $63,500 | $68,000 | | Shareholders' Equity | $386,489 | $365,761 | [Operating Data](index=4&type=section&id=Operating%20Data) Q2 2024 comparable restaurant sales declined by 0.6%, a shift from prior year growth, with a 1.1% decline for the first six months, and one new restaurant opened, totaling 216 locations Key Operating Metrics | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Comparable restaurant sales % change | (0.6)% | 4.7% | (1.1)% | 6.8% | | Restaurants opened during period | - | 1 | 1 | 2 | | Restaurants open at period-end | 216 | 216 | 216 | 216 | [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section presents non-GAAP financial measures, including Restaurant Level Operating Margin and Adjusted EBITDA, with detailed reconciliations to GAAP measures, offering insights into core business trends - The company uses non-GAAP measures like Restaurant Level Operating Margin and Adjusted EBITDA as supplemental tools to evaluate performance, highlighting trends that may not be apparent from GAAP measures alone[10](index=10&type=chunk)[11](index=11&type=chunk)[26](index=26&type=chunk) [Restaurant Level Operating Margin](index=4&type=section&id=Restaurant%20Level%20Operating%20Margin) Q2 2024 non-GAAP Restaurant Level Operating Margin improved by 100 basis points to **15.5%**, reaching **$54.2 million**, demonstrating enhanced restaurant-level efficiency Reconciliation to Restaurant Level Operating Margin (in thousands) | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Income from operations | $13,221 | $10,212 | $21,479 | $12,828 | | **Restaurant level operating margin** | **$54,216** | **$50,622** | **$104,718** | **$93,546** | | *as a % of revenues* | *15.5%* | *14.5%* | *15.2%* | *13.5%* | [Adjusted EBITDA](index=5&type=section&id=Adjusted%20EBITDA) Q2 2024 Adjusted EBITDA increased **13.4%** to **$36.1 million** (10.3% of revenues), reflecting higher net income and non-cash expense adjustments Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income | $17,157 | $11,932 | $24,880 | $15,413 | | **Adjusted EBITDA** | **$36,078** | **$31,828** | **$65,470** | **$56,844** | | *as a % of revenues* | *10.3%* | *9.1%* | *9.5%* | *8.2%* | [Other Information](index=1&type=section&id=Other%20Information) This section provides supplementary company details, investor relations activities, and legal disclaimers, including a corporate profile, earnings call information, and forward-looking statements - BJ's Restaurants, Inc. is a national brand founded in 1978 that owns and operates over **200 casual dining restaurants** across **31 states**[5](index=5&type=chunk)[20](index=20&type=chunk) - The company conducted a conference call and live audio webcast on **July 25, 2024**, to discuss the financial results[28](index=28&type=chunk) - The report includes forward-looking statements concerning expected sales, margins, and growth initiatives, which are subject to various business and economic risks[6](index=6&type=chunk)

HUNTINGTON BEACH, Calif., July 25, 2024 (GLOBE NEWSWIRE) -- BJ's Restaurants, Inc. (NASDAQ: BJRI) today reported financial results for its fiscal 2024 second quarter ended Tuesday, July 2, 2024. Fiscal Second Quarter 2024 Compared to Fiscal Second Quarter 2023 Total revenues increased 0.1% to $349.9 million Comparable restaurant sales declined 0.6% Total restaurant operating weeks increased 0.4% Net income of $17.2 million, compared to $11.9 million; diluted net income per share of $0.72, compared to $0.50 ...

Restaurant companies' second-quarter 2024 results are likely to be bolstered by increased menu prices, higher average check sizes and expansion initiatives. Many restaurant companies benefited from partnerships with delivery services and digital platforms. The industry players are likely to have benefited from the rise in off-premise sales, including delivery, takeout, drive-thru, catering, meal kits, and off-site options like kiosks and food trucks in the second quarter. Many operators also tested ghost or ...