BJ’s(US:BJRI)2024-11-04 21:44Revenue and Sales Performance - Total revenues increased by $7.1 million, or 2.2%, to $325.7 million for the thirteen weeks ended October 1, 2024, compared to $318.6 million for the same period in 2023[45] - Comparable restaurant sales rose by 1.7%, or $5.2 million, driven by a 1.3% increase in guest traffic and a 0.4% increase in average check[45] - Total revenues increased by $3.4 million, or 0.3%, to $1.0 billion during the thirty-nine weeks ended October 1, 2024, driven by an $18.5 million increase from new restaurants, despite a 0.2% decline in comparable restaurant sales[47] Cost and Expense Analysis - Cost of sales increased by $4.0 million, or 4.9%, to $86.7 million, with cost of sales as a percentage of revenues rising to 26.6% from 25.9%[45] - Labor and benefit costs increased by $2.5 million, or 2.1%, to $120.7 million, maintaining a consistent percentage of revenues at 37.1%[45] - Occupancy and operating expenses increased by $0.3 million, or 0.4%, to $80.3 million, with the percentage of revenues decreasing to 24.7% from 25.1%[46] - General and administrative expenses rose by $1.5 million, or 7.6%, to $21.0 million, increasing as a percentage of revenues to 6.4% from 6.1%[46] - Cost of sales decreased by $2.7 million, or 1.0%, to $261.5 million, with cost of sales as a percentage of revenues decreasing to 25.8% from 26.2% due to cost savings initiatives[47] - Labor and benefit costs decreased by $1.0 million, or 0.3%, to $372.0 million, with labor costs as a percentage of revenues decreasing to 36.7% from 37.0%[49] - Occupancy and operating expenses decreased by $4.3 million, or 1.8%, to $236.7 million, with expenses as a percentage of revenues decreasing to 23.4% from 23.9%[49] - General and administrative expenses increased by $4.2 million, or 6.9%, to $64.6 million, with expenses as a percentage of revenues increasing to 6.4% from 6.0%[49] Cash Flow and Financial Position - Net cash provided by operating activities was $69.8 million, a decrease of $3.8 million from the prior year[54] - Net cash used in investing activities was $61.0 million, a decrease of $20.9 million from the prior year, primarily due to fewer new restaurant openings[56] - Net cash used in financing activities increased by $14.9 million to $19.5 million, primarily due to an increase in shares repurchased[58] - As of October 1, 2024, the company had cash and cash equivalents of $18.4 million and a current ratio of 0.4:1.0[52] - The company anticipates total capital expenditures for fiscal 2024 to be approximately $75 million, funded by current cash balance, cash flows from operations, and line of credit[57] Market and Economic Factors - Inflation has impacted operations, new restaurant construction, and return on invested capital, with menu price increases partially offsetting these effects[60] - The company has a $215 million Credit Facility, with $66.5 million currently outstanding, and a 1% change in interest rates would affect net income by approximately $0.5 million annually[64] - The business is exposed to food, supplies, and commodity price risks, with costs fluctuating due to market conditions and government regulations[65] - The company attempts to enter into fixed-price purchase commitments for commodities, but may not always be able to do so[65] - Seasonal factors and adverse weather significantly impact restaurant sales volumes, with quarterly results affected by new restaurant openings[61] - The company is exposed to market risks that could lead to material differences in actual results compared to forward-looking statements[63] - The ability to offset inflation effects through menu price increases or cost savings will determine future restaurant profitability[60] - The company believes it has flexibility to adjust menu prices in response to commodity price increases[65] - Macroeconomic conditions affecting consumer discretionary spending may limit the ability to increase menu prices further[60] Taxation - The effective income tax rate for the thirteen weeks ended October 1, 2024, was a benefit of 8.2%, compared to an expense of 11.8% for the same period in 2023[46] Depreciation and Amortization - Depreciation and amortization increased by $0.3 million, or 1.8%, to $18.2 million, remaining consistent at 5.6% of revenues[46] Restaurant Opening Expenses - Restaurant opening expenses decreased by $0.3 million, or 19.1%, to $1.1 million due to the timing of openings[46] Interest Expense - Interest expense, net, increased by $0.3 million to $1.3 million, attributed to a higher average interest rate and outstanding debt balance[46] Accounting Policies - Critical accounting policies require estimates and assumptions that may differ materially from actual results, with no significant changes reported in the last thirty-nine weeks[62]