Industry Overview - U.S. retail sales have experienced fluctuations due to tariff fears and high inflation, yet spending at restaurants and bars remains strong [1] - Sales at U.S. restaurants reached $99.4 billion in April, reflecting a 1.2% month-over-month increase after a 3% rise in March, indicating consumer willingness to dine out [3][4] - Inflation is showing signs of cooling, with the consumer price index (CPI) rising 0.2% in April and a year-over-year increase of 2.3%, the smallest since February 2021 [5] Economic Factors - Easing trade war tensions and a temporary pause on tariffs announced by President Trump have contributed to a more favorable outlook for the restaurant industry [6] - The Federal Reserve's potential resumption of rate cuts could further benefit the restaurant sector [6] Investment Opportunities - Recommended restaurant stocks include BJ's Restaurants, Inc. (BJRI), Wingstop (WING), and CAVA Group, Inc. (CAVA), all of which have seen positive earnings estimate revisions in the last 60 days and carry a Zacks Rank 2 (Buy) [2] - BJRI has an expected earnings growth rate of 23.8% for the current year, with a 9% improvement in earnings estimates over the past 60 days [7] - WING's expected earnings growth rate is 6.3%, with a 6.3% improvement in earnings estimates over the past 60 days [8] - CAVA's expected earnings growth rate is 38.1%, with a 5.5% improvement in earnings estimates over the past 60 days [10]

Company Overview - BJ's Restaurants (BJRI) is part of the Retail-Wholesale sector, which includes 207 companies and is currently ranked 9 in the Zacks Sector Rank [2] - BJRI has a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] Performance Analysis - Over the past 90 days, the Zacks Consensus Estimate for BJRI's full-year earnings has increased by 23.1%, reflecting positive analyst sentiment [4] - BJRI has achieved an 18.3% return year-to-date, significantly outperforming the Retail-Wholesale sector's average return of 1.5% [4] - In the Retail-Restaurants industry, which consists of 39 stocks, BJRI is performing better as the industry average has seen a decline of 0.4% this year [6] Comparative Analysis - Another stock in the Retail-Wholesale sector, Canada Goose (GOOS), has a year-to-date return of 6.4% and also holds a Zacks Rank of 2 (Buy) [5] - Canada Goose belongs to the Retail-Apparel and Shoes industry, which has experienced a decline of 8.8% this year, indicating that BJRI is outperforming its peers in a more favorable industry context [6] Investment Outlook - Both BJ's Restaurants and Canada Goose are highlighted as stocks to watch for continued solid performance in the Retail-Wholesale sector [7]

Core Viewpoint - Momentum investing focuses on buying stocks that are trending upwards, contrasting with the traditional strategy of buying low and selling high. This approach can lead to significant gains but carries risks if stocks lose momentum after their valuations exceed growth potential [1]. Group 1: Momentum Investing Strategy - Momentum investing involves buying high and selling higher, appealing to investors who prefer fast-moving stocks [1]. - Identifying the right entry point for momentum stocks is challenging, as they may lose momentum if their valuations outpace future growth [1]. Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy. The Zacks Momentum Style Score helps identify such stocks [2]. - BJ's Restaurants (BJRI) is highlighted as a strong candidate, with a price increase of 25.9% over the past four weeks, indicating growing investor interest [3]. Group 3: BJRI Stock Performance - BJRI has demonstrated sustained momentum, gaining 9% over the past 12 weeks, with a beta of 1.47, suggesting it moves 47% more than the market [4]. - The stock has a Momentum Score of B, indicating a favorable time to invest for potential success [5]. Group 4: Earnings Estimates and Valuation - BJRI has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [6]. - The stock is trading at a Price-to-Sales ratio of 0.68, suggesting it is undervalued, as investors pay only 68 cents for each dollar of sales [6]. Group 5: Additional Investment Opportunities - Besides BJRI, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7]. - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in the identification of potential winning stocks [8].

Core Insights - The Zacks Retail – Restaurants industry is facing a challenging macroeconomic environment but is experiencing sales growth due to menu price hikes and expansion efforts [1][3] - Key players like CAVA Group, Wingstop, and BJ's Restaurants are well-positioned to benefit from current trends [1] Industry Overview - The industry includes various types of restaurants, from casual to fine dining, and also encompasses quick-service and specialty coffee operations [2] - Operators are increasingly focusing on digital innovation and partnerships with delivery platforms to enhance sales [5] Current Trends - The industry is grappling with persistent inflation and reduced consumer purchasing power, leading to declining traffic [3] - Despite these challenges, restaurant sales reached $99.1 billion in April, showing resilience as consumers continue to dine out [4] - Off-premise sales, including delivery and takeout, are becoming a significant growth driver [6] Performance Metrics - The Zacks Restaurant industry has underperformed the S&P 500, growing 8% over the past year compared to the S&P 500's 11.7% increase [9] - The industry's forward 12-month P/E ratio is 26.55X, higher than the S&P 500's 21.89X and the sector's 23.95X [12] Company Highlights - **CAVA Group**: Expected to open 64-68 new restaurants in fiscal 2025, with anticipated same-restaurant sales growth of 6-8% and a profit margin of 24.8%-25.2% [14] - **Wingstop**: Leveraging AI technology for operational improvements, with projected sales and earnings growth of 16.6% and 6.3% respectively in 2025 [18] - **BJ's Restaurants**: Benefiting from increased guest traffic and sales-driving initiatives, with expected sales and earnings growth of 3.2% and 23.8% respectively in 2025 [22]

Retail Sales Overview - U.S. retail sales increased by 0.1% in April following a revised 1.7% increase in March, contrary to economists' expectations of no change [1] - The March increase was influenced by consumers making purchases in anticipation of tariff announcements [1] Sector Performance - The largest increases in April were in food services and drinking places (1.2%), building material and garden equipment supplies (0.8%), furniture (0.3%), and electronics and appliances stores (0.3%) [2] - Sales excluding food services, auto dealers, building materials stores, and gasoline stations decreased by 0.2%, below the revised 0.5% gain in March and forecasts of a 0.3% rise [2] Winning Areas Food Services and Drinking Places - Sales in this sector rose by 1.2% sequentially in April and 7.8% year over year [4] - AdvisorShares Restaurant ETF (EATZ) focuses on companies deriving at least 50% of their revenue from the restaurant business [4] - BJ's Restaurants (BJRI) operates high-end casual dining restaurants and has a Zacks Rank 1 (Strong Buy) [5] Building Material & Garden Equipment & Supplies Dealers - This segment experienced a 0.8% sequential sales gain and a 3.2% year-over-year increase [6] - Broad-based retail ETFs like Consumer Discretionary Select Sector SPDR ETF (XLY) and VanEck Retail ETF (RTH) are relevant for this sector [6] - Vulcan Materials (VMC) is the largest supplier of construction aggregates in the U.S. and has a Zacks Rank 2 (Buy) [7] Electronics & Appliance Stores - Sales in this category increased by 0.3% sequentially in April and 0.1% year over year [8] - The rise in electronics sales is expected to benefit semiconductor funds and stocks [8] - VanEck Vectors Semiconductor ETF (SMH) tracks companies involved in semiconductor production and charges 35 bps in fees [8] - Universal Electronics (UEIC) is a leader in universal control and sensing technologies for smart homes and has a Zacks Rank 3 [9]

Company Overview - BJ's Restaurants (BJRI) currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 2 (Buy), suggesting favorable market performance expectations [4] Price Performance - BJRI shares have increased by 13.67% over the past week, outperforming the Zacks Retail - Restaurants industry, which rose by 1.74% [6] - Over the past month, BJRI's price change is 24.95%, significantly higher than the industry's 9.53% [6] - In the last quarter, BJRI shares rose by 6.55%, and over the past year, they gained 11.09%, while the S&P 500 saw declines of -7.56% and gains of 9.65%, respectively [7] Trading Volume - The average 20-day trading volume for BJRI is 499,399 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Estimates - In the past two months, four earnings estimates for BJRI have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.67 to $1.79 [10] - For the next fiscal year, four estimates have moved upwards, while one has been revised downwards [10] Conclusion - Given the strong price performance, positive earnings outlook, and high Momentum Style Score, BJRI is positioned as a promising investment opportunity [12]

Investors interested in Retail - Restaurants stocks are likely familiar with BJ's Restaurants (BJRI) and Chipotle Mexican Grill (CMG) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies w ...

Revenue and Sales Performance - Total revenues increased by $10.6 million, or 3.2%, to $348.0 million for the thirteen weeks ended April 1, 2025, compared to $337.3 million for the same period in 2024[79] - Comparable restaurant sales rose by 1.7%, or $5.7 million, driven by a guest traffic increase of approximately 2.7%, despite a 1.0% decrease in average check[79] Cost and Expense Management - Cost of sales increased by $1.9 million, or 2.2%, to $86.8 million, with cost of sales as a percentage of revenues decreasing to 25.0% from 25.2%[80] - Labor and benefit costs rose by $0.6 million, or 0.5%, to $125.7 million, with labor and benefit costs as a percentage of revenues decreasing to 36.1% from 37.1%[81] - Occupancy and operating expenses increased by $3.1 million, or 4.0%, to $79.9 million, with occupancy and operating expenses as a percentage of revenues increasing to 23.0% from 22.8%[82] - General and administrative expenses decreased by $1.2 million, or 5.4%, to $21.8 million, with general and administrative expenses as a percentage of revenues decreasing to 6.3% from 6.8%[84] - Depreciation and amortization increased by $0.4 million, or 2.3%, to $18.3 million, remaining consistent at 5.3% of revenues[85] - Restaurant opening expenses decreased by $0.2 million, or 25.8%, to $0.4 million due to the timing of openings[86] Profitability and Income - Net income for the thirteen weeks ended April 1, 2025, was 3.9%, compared to 2.3% for the same period in 2024[78] Capital Expenditures and Future Plans - The company expects to accelerate restaurant openings in 2026, with capital expenditures in 2025 dependent on the development of a robust pipeline for new locations[91] - Total capital expenditures for the thirteen weeks ended April 1, 2025, were $16.7 million, down from $21.9 million in the same period in 2024[96] - The company plans to remodel up to 30 existing locations in fiscal 2025 and anticipates total capital expenditures of approximately $65 million to $75 million for the fiscal year[96] Cash Flow and Financing Activities - Net cash provided by operating activities was $4.6 million for the thirteen weeks ended April 1, 2025, a decrease of $17.7 million from $22.3 million for the same period in 2024[95] - Net cash used in investing activities was $16.6 million for the thirteen weeks ended April 1, 2025, a decrease of $5.2 million from $21.9 million in the prior year[96] - Net cash provided by financing activities was $4.9 million for the thirteen weeks ended April 1, 2025, an increase of $15.6 million from a net cash outflow of $10.7 million in the prior year[97] - The company has a $215 million Credit Facility, with $85.5 million outstanding as of April 1, 2025, which carries a floating interest rate[104] - A hypothetical 1% change in interest rates under the Credit Facility would have an approximate $0.6 million annual impact on net income[105] Operational Challenges and Strategies - Inflation has affected operations and new restaurant construction, with the company partially offsetting these costs through menu price increases and improved purchasing practices[99] - The company has successfully upgraded to a new Enterprise Resource Planning (ERP) system, which impacted accounts payable and operating cash flow[95] - The company does not participate in off-balance sheet arrangements and is not involved with unconsolidated entities as of April 1, 2025[98]

Core Insights - BJ's Restaurants (NASDAQ: BJRI) has released its earnings report, showing resilience despite softer consumer spending early in the year [1] Financial Performance - The company is performing well in the current economic climate, which is notable given the challenges faced by the restaurant industry [1] Industry Context - The report highlights the broader context of consumer spending trends affecting the restaurant sector, indicating that BJ's Restaurants is managing to hold its ground [1]

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead ...