BJ’s(BJRI) - 2025 Q3 - Quarterly Results

Executive Summary & Business Update This section summarizes BJ's Restaurants' Q3 2024 financial results, strategic initiatives, and capital allocation Fiscal Third Quarter 2024 Highlights BJ's Restaurants reported 2.2% revenue growth and 1.7% comparable sales increase in Q3 2024, recording a $2.9 million net loss Fiscal Third Quarter 2024 vs. Fiscal Third Quarter 2023 Key Financials (in millions) | Metric | Q3 2024 | Q3 2023 | Change | | :--------------------------- | :------------------ | :------------------ | :---------- | | Total revenues | $325.7 million | $318.6 million | +2.2% | | Comparable restaurant sales | +1.7% | N/A | +1.7% | | Total restaurant operating weeks | +0.2% | N/A | +0.2% | | Net loss | $(2.9) million | $(3.8) million | Improved | | Diluted net loss per share | $(0.13) | $(0.16) | Improved | | Adjusted EBITDA | $18.5 million | $19.6 million | -5.6% | - Third quarter 2024 net loss includes a $0.4 million pretax, or $0.02 per share, net leadership transition benefit[2] CEO Commentary & Strategic Outlook CEO Brad Richmond highlighted positive sales and guest traffic, acknowledged cost impacts, and emphasized new leadership's focus on profitability and growth - Sales momentum is building behind the Pizookie Meal Deal, successful product launches, and a large party initiative for the holiday season[2] - Guest traffic exceeded the industry by approximately 570 basis points in Q3 2024[2] - New President and Chief Concept Officer, Lyle Tick, and the CEO are conducting a comprehensive assessment of BJ's strengths and opportunities to usher in renewed growth, focusing on brand awareness, operational/financial discipline, and accelerated new unit openings[3] Restaurant Development & Capital Allocation The company opened two new restaurants in Q3 2024, bringing the year-to-date total to three, prioritizing high-return investments and shareholder returns - Opened two new restaurants in Q3 2024, totaling three new restaurants for the year[4] - Capital allocation strategy prioritizes high-return investments: new restaurant growth, remodels, and share repurchases[4] - Pace of capital programs will be shaped by evaluation of unit productivity, financial return performance, and future concept refinement[4] Share Repurchase Program During Q3 2024, BJ's Restaurants repurchased approximately 268,000 shares for $8.2 million, with $44 million remaining under its $550 million program - Repurchased approximately 268,000 shares of common stock at a cost of approximately $8.2 million during Q3 2024[5] - Approximately $44 million remains available under the authorized $550 million share repurchase program[5] Company Information This section provides company background, investor communication details, and a forward-looking statements disclaimer About BJ's Restaurants, Inc. BJ's Restaurants, a national casual dining brand founded in 1978, operates over 200 restaurants in 31 states offering a diverse menu - BJ's is a national brand with brewhouse roots, known for its broad menu, including slow-roasted entrees, EnLIGHTened Entrees, deep-dish pizza, and the Pizookie dessert[7] - Winner of the 2024 Vibe Vista Award for Best Overall Beverage Program and the most decorated restaurant-brewery in the country, pioneering craft brewing since 1996[7] - Founded in 1978, BJ's owns and operates over 200 restaurants in 31 states, offering dine-in, take-out, delivery, and large party catering[7] Investor Conference Call & Webcast BJ's Restaurants, Inc. held a conference call and live audio webcast on October 31, 2024, to discuss its fiscal third quarter 2024 earnings - Conference call and live audio webcast for Q3 2024 earnings held on October 31, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)[6] - Accessible on the 'Investors' page of http://www.bjsrestaurants.com, with a recording archived for 30 days[6] Forward-Looking Statements Disclaimer This section disclaims forward-looking statements, highlighting risks and uncertainties that may cause actual results to differ from projections - Statements not purely historical are 'forward-looking' and covered by safe harbors, involving known and unknown risks, uncertainties, and other factors[8] - Factors causing differences include inability to raise menu prices, manage new openings, construction delays, wage inflation, competitive labor markets, minimum wage increases, credit market disruptions, food quality concerns, regional impacts (CA, TX, FL), industry competition, commodity costs, government regulations, and loss of key personnel[8] - The company undertakes no obligation to update or alter its forward-looking statements[8] Consolidated Financial Statements This section presents unaudited consolidated statements of operations, selected balance sheet information, and key operating data Unaudited Consolidated Statements of Operations The unaudited consolidated statements of operations present the financial performance for the fiscal third quarter and nine months ended October 1, 2024, and October 3, 2023 Unaudited Consolidated Statements of Operations (Dollars in thousands) | Metric (Dollars in thousands) | Q3 2024 | % of Rev | Q3 2023 | % of Rev | 9 Months 2024 | % of Rev | 9 Months 2023 | % of Rev | | :---------------------------- | :---------- | :------- | :---------- | :------- | :------------ | :------- | :------------ | :------- | | Revenues | $325,702 | 100.0% | $318,644 | 100.0% | $1,012,963 | 100.0% | $1,009,594 | 100.0% | | Cost of sales | 86,673 | 26.6% | 82,652 | 25.9% | 261,462 | 25.8% | 264,143 | 26.2% | | Labor and benefits | 120,718 | 37.1% | 118,198 | 37.1% | 372,048 | 36.7% | 373,053 | 37.0% | | Occupancy and operating | 80,322 | 24.7% | 80,020 | 25.1% | 236,746 | 23.4% | 241,078 | 23.9% | | General and administrative | 20,960 | 6.4% | 19,473 | 6.1% | 64,561 | 6.4% | 60,373 | 6.0% | | Depreciation and amortization | 18,193 | 5.6% | 17,879 | 5.6% | 54,229 | 5.4% | 53,199 | 5.3% | | (Loss) income from operations | (2,608) | (0.8)% | (2,387) | (0.7)% | 18,871 | 1.9% | 10,441 | 1.0% | | Net (loss) income | $(2,927) | (0.9)% | $(3,804) | (1.2)% | $21,953 | 2.2% | $11,609 | 1.1% | | Diluted Net (loss) income per share | $(0.13) | N/A | $(0.16) | N/A | $0.92 | N/A | $0.48 | N/A | Selected Consolidated Balance Sheet Information This section provides key balance sheet figures, including cash and cash equivalents, total assets, total debt, and shareholders' equity, as of October 1, 2024, and January 2, 2024 Selected Consolidated Balance Sheet Information (Dollars in thousands) | Metric (Dollars in thousands) | October 1, 2024 | January 2, 2024 | | :---------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $18,422 | $29,070 | | Total assets | $1,041,784 | $1,058,454 | | Total debt | $66,500 | $68,000 | | Shareholders' equity | $376,175 | $365,761 | Operating Data The operating data provides key performance indicators such as comparable restaurant sales, new restaurant openings, and total restaurant operating weeks for the fiscal third quarter and nine months ended October 1, 2024, and October 3, 2023 Operating Data | Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 | | :-------------------------- | :------ | :------ | :------------ | :------------ | | Comparable restaurant sales % change | 1.7% | 0.4% | (0.2)% | 4.7% | | Restaurants opened during period | 2 | 3 | 3 | 5 | | Restaurants open at period end | 218 | 217 | 218 | 217 | | Restaurant operating weeks | 2,811 | 2,805 | 8,440 | 8,421 | Supplemental Financial Information & Non-GAAP Measures This section details stock-based compensation and reconciles non-GAAP measures like Restaurant Level Operating Margin and Adjusted EBITDA Stock-Based Compensation This section details the stock-based compensation expenses allocated to labor and benefits, and general and administrative costs for the third quarter and nine months ended October 1, 2024, and October 3, 2023 Stock-based Compensation (Dollars in thousands) | Category (Dollars in thousands) | Q3 2024 | % of Rev | Q3 2023 | % of Rev | 9 Months 2024 | % of Rev | 9 Months 2023 | % of Rev | | :------------------------------ | :------ | :------- | :------ | :------- | :------------ | :------- | :------------ | :------- | | Labor and benefits | $727 | 0.2% | $577 | 0.2% | $1,764 | 0.2% | $1,853 | 0.2% | | General and administrative | 185 | 0.1% | 2,092 | 0.7% | 4,392 | 0.4% | 6,236 | 0.6% | | Total stock-based compensation | $912 | 0.3% | $2,669 | 0.8% | $6,156 | 0.6% | $8,089 | 0.8% | Restaurant Level Operating Margin Definition and Use Restaurant Level Operating Margin is a non-GAAP measure, calculated as revenues less direct operating costs, used by management to highlight core business trends - Restaurant level operating margin is a non-GAAP measure equal to revenues less direct operating costs (cost of sales, labor and benefits, occupancy and operating costs)[14] - It primarily includes costs that restaurant level managers can directly control and excludes other essential operating costs[14] - Management uses this measure as a supplemental indicator of restaurant performance to highlight core business trends not apparent from GAAP measures, noting it may not be comparable to similarly titled measures from other companies[13][14] Reconciliation This table provides the reconciliation of (Loss) income from operations to Restaurant Level Operating Margin for the third quarter and nine months ended October 1, 2024, and October 3, 2023 Reconciliation of (Loss) income from operations to Restaurant Level Operating Margin (Dollars in thousands) | Metric (Dollars in thousands) | Q3 2024 | % of Rev | Q3 2023 | % of Rev | 9 Months 2024 | % of Rev | 9 Months 2023 | % of Rev | | :---------------------------- | :---------- | :------- | :---------- | :------- | :------------ | :------- | :------------ | :------- | | (Loss) income from operations | $(2,608) | (0.8)% | $(2,387) | (0.7)% | $18,871 | 1.9% | $10,441 | 1.0% | | General and administrative | 20,960 | 6.4% | 19,473 | 6.1% | 64,561 | 6.4% | 60,373 | 6.0% | | Depreciation and amortization | 18,193 | 5.6% | 17,879 | 5.6% | 54,229 | 5.4% | 53,199 | 5.3% | | Restaurant opening | 1,115 | 0.3% | 1,379 | 0.4% | 2,005 | 0.2% | 2,601 | 0.3% | | Loss on disposal and impairment of assets, net | 329 | 0.1% | 1,430 | 0.4% | 3,041 | 0.3% | 4,706 | 0.5% | | Restaurant level operating margin | $37,989 | 11.7% | $37,774 | 11.9% | $142,707 | 14.1% | $131,320 | 13.0% | Adjusted EBITDA Definition and Use Adjusted EBITDA is a non-GAAP measure, adjusting net (loss) income for specific items, used by management to highlight cash flow and core business trends - Adjusted EBITDA is a non-GAAP financial measure representing net (loss) income adjusted for interest expense, income tax (benefit) expense, depreciation and amortization, leadership transition expenses, stock-based compensation, other (income) expenses, and loss on disposal and impairment of assets[16][17] - Management uses Adjusted EBITDA as a supplemental measure to highlight cash flow and core business trends not otherwise apparent from GAAP financial measures[16] - The company notes that Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies[13][16] Reconciliation This table provides the reconciliation of Net (Loss) Income to Adjusted EBITDA for the third quarter and nine months ended October 1, 2024, and October 3, 2023 Reconciliation of Net (Loss) Income to Adjusted EBITDA (Dollars in thousands) | Metric (Dollars in thousands) | Q3 2024 | % of Rev | Q3 2023 | % of Rev | 9 Months 2024 | % of Rev | 9 Months 2023 | % of Rev | | :---------------------------- | :---------- | :------- | :---------- | :------- | :------------ | :------- | :------------ | :------- | | Net (loss) income | $(2,927) | (0.9)% | $(3,804) | (1.2)% | $21,953 | 2.2% | $11,609 | 1.1% | | Interest expense, net | 1,342 | 0.4% | 1,013 | 0.3% | 4,012 | 0.4% | 3,242 | 0.3% | | Income tax (benefit) expense | (260) | (0.1)% | 401 | 0.1% | (2,863) | (0.3)% | (3,595) | (0.4)% | | Depreciation and amortization | 18,193 | 5.6% | 17,879 | 5.6% | 54,229 | 5.4% | 53,199 | 5.3% | | Leadership transition expenses, net | 1,688 | 0.5% | - | - | 1,688 | 0.2% | - | - | | Stock-based compensation expense | 3,005 | 0.9% | 2,669 | 0.8% | 8,249 | 0.8% | 8,089 | 0.8% | | Stock-based compensation credit (1) | (2,093) | (0.6)% | - | - | (2,093) | (0.2)% | - | - | | Other (income) expenses, net | (763) | (0.2)% | 3 | - | (4,231) | (0.4)% | (815) | (0.1)% | | Loss on disposal and impairment of assets, net | 329 | 0.1% | 1,430 | 0.4% | 3,041 | 0.3% | 4,706 | 0.5% | | Adjusted EBITDA | $18,514 | 5.7% | $19,591 | 6.1% | $83,985 | 8.3% | $76,435 | 7.6% |