BJ's Restaurants, Inc. (BJRI) Bundle
Understanding BJ's Restaurants, Inc. (BJRI) Revenue Streams
Understanding BJ's Restaurants, Inc.’s Revenue Streams
During the thirteen weeks ended October 1, 2024, total revenues reached $325.7 million, an increase of $7.1 million or 2.2% from $318.6 million in the comparable period of 2023. The increase in revenues was primarily driven by a 1.7% increase in comparable restaurant sales, accounting for $5.2 million, and an additional $5.4 million from sales of new restaurants not yet included in comparable restaurant sales. This growth was partially offset by a $2.7 million decrease due to closed restaurants and $0.7 million related to gift card breakage and loyalty redemptions.
The breakdown of revenue sources for the thirteen weeks ended October 1, 2024, is as follows:
| Revenue Source | Amount (in millions) | Percentage of Total Revenue |
|---|---|---|
| Comparable Restaurant Sales | $5.2 | 1.7% |
| Sales from New Restaurants | $5.4 | — |
| Closed Restaurants Impact | ($2.7) | — |
| Gift Card Breakage and Loyalty Redemptions | ($0.7) | — |
| Total Revenue | $325.7 | 100% |
For the thirty-nine weeks ended October 1, 2024, total revenues amounted to $1.0 billion, reflecting an increase of $3.4 million or 0.3% compared to $1.009 billion in the previous year. This revenue increase was largely attributed to $18.5 million from sales of new restaurants, though offset by a 0.2% decline in comparable restaurant sales, which decreased by $2.4 million. Additionally, the closed restaurants accounted for a decrease of $11.2 million, with gift card breakage impacting revenues by $1.5 million.
The following table summarizes the revenue contributions and changes for the thirty-nine weeks ended October 1, 2024:
| Revenue Component | Amount (in millions) | Change from Previous Year (in millions) |
|---|---|---|
| Sales from New Restaurants | $18.5 | +18.5 |
| Comparable Restaurant Sales | ($2.4) | (-2.4) |
| Closed Restaurants Impact | ($11.2) | (-11.2) |
| Gift Card Breakage and Loyalty Redemptions | ($1.5) | (-1.5) |
| Total Revenue | $1,012.9 | +3.4 |
Overall, the revenue growth trajectory reflects a mix of new restaurant openings and comparable sales performance, influenced by guest traffic and menu pricing strategies. The company continues to adapt its offerings and operational strategies to enhance revenue amid industry challenges.
A Deep Dive into BJ's Restaurants, Inc. (BJRI) Profitability
Profitability Metrics
Analyzing the profitability metrics of BJ's Restaurants, Inc. provides key insights into its financial health as of 2024. The following sections cover gross profit, operating profit, and net profit margins, along with trends in profitability over time and comparisons with industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
For the thirteen weeks ended October 1, 2024, the company reported:
- Gross Profit: $238.0 million, which reflects a gross margin of 73.0%.
- Operating Profit: $(2.6) million, resulting in an operating margin of (0.8)%.
- Net Profit: $(2.9) million, leading to a net profit margin of (0.9)%.
For the thirty-nine weeks ended October 1, 2024, the financial metrics were as follows:
- Gross Profit: $751.0 million, with a gross margin of 74.1%.
- Operating Profit: $18.9 million, equivalent to an operating margin of 1.9%.
- Net Profit: $22.0 million, resulting in a net profit margin of 2.2%.
| Metric | Thirteen Weeks Ended October 1, 2024 | Thirteen Weeks Ended October 3, 2023 | Thirty-Nine Weeks Ended October 1, 2024 | Thirty-Nine Weeks Ended October 3, 2023 |
|---|---|---|---|---|
| Gross Profit ($M) | $238.0 | $236.0 | $751.0 | $749.0 |
| Gross Margin (%) | 73.0% | 73.9% | 74.1% | 74.2% |
| Operating Profit ($M) | $(2.6) | $(2.4) | $18.9 | $10.4 |
| Operating Margin (%) | (0.8)% | (0.7)% | 1.9% | 1.0% |
| Net Profit ($M) | $(2.9) | $(3.8) | $22.0 | $11.6 |
| Net Margin (%) | (0.9)% | (1.2)% | 2.2% | 1.1% |
Trends in Profitability Over Time
The profitability trends indicate a volatile performance in recent quarters. The operating profit margin has fluctuated, with a notable improvement in the thirty-nine weeks ended October 1, 2024, compared to the previous year. The net profit margin has also shown improvement, rising from 1.1% to 2.2% for the thirty-nine weeks period. However, the recent quarter showed a slight decline in both operating and net margins compared to the same period in the previous year.
Comparison of Profitability Ratios with Industry Averages
When comparing these profitability ratios with industry averages, the restaurant sector typically sees gross margins around 65%-70%. The company's gross margin of 73.0% aligns favorably within the industry context. However, the operating margin of (0.8)% contrasts with the industry average of approximately 5%-10%, indicating operational challenges that need addressing.
Analysis of Operational Efficiency
Operational efficiency is critical in assessing profitability. For the thirty-nine weeks ended October 1, 2024, the cost of sales was 25.8% of revenues, a decrease from 26.2% in the prior year, reflecting improved cost management. Labor and benefit costs also saw a slight decrease to 36.7% of revenues from 37.0%, showcasing effective cost-saving initiatives.
Overall, the company’s focus on operational efficiency is evident through strategic cost management, leading to improved gross margin performance despite challenges in net profitability.
Debt vs. Equity: How BJ's Restaurants, Inc. (BJRI) Finances Its Growth
Debt vs. Equity: How BJ's Restaurants, Inc. Finances Its Growth
As of October 1, 2024, the company reported total long-term debt of $66.5 million and short-term debt of $0 million, reflecting a strategic approach to maintaining a manageable debt load. The total liabilities stood at $665.9 million.
Debt-to-Equity Ratio
The debt-to-equity ratio for the company is calculated at 0.18, which is significantly lower than the industry average of approximately 1.0. This suggests that the company is less reliant on debt financing compared to its peers.
Recent Debt Issuances and Credit Ratings
In November 2021, the company entered into a Fourth Amended and Restated Credit Agreement with a total revolving credit commitment of $215 million, which can be increased up to $315 million. As of October 1, 2024, the company had $131.3 million available to borrow under this facility. The company’s credit ratings have not been explicitly detailed in the available data but maintaining low debt levels generally supports a healthier credit profile.
Balance Between Debt Financing and Equity Funding
The company utilizes a balanced approach between debt and equity funding. As of October 1, 2024, shareholders' equity was reported at $376.2 million, reflecting a stable capital structure. The company also engages in share repurchase programs, indicating a commitment to returning value to shareholders while managing its capital structure effectively.
Financial Summary Table
| Financial Metric | Amount (in millions) |
|---|---|
| Total Long-term Debt | $66.5 |
| Total Short-term Debt | $0.0 |
| Total Liabilities | $665.9 |
| Debt-to-Equity Ratio | 0.18 |
| Shareholders' Equity | $376.2 |
| Credit Facility Available | $131.3 |
The company’s financing strategy reflects its commitment to maintaining financial stability while pursuing growth opportunities through debt and equity management.
Assessing BJ's Restaurants, Inc. (BJRI) Liquidity
Assessing BJ's Restaurants, Inc.'s Liquidity
Current Ratio: As of October 1, 2024, the current ratio stands at 0.4:1.0, remaining consistent since January 2, 2024 .
Quick Ratio: The quick ratio is not explicitly mentioned in the data provided; however, it can be inferred that liquidity is tight given the current ratio is below 1.0, indicating potential liquidity concerns.
Analysis of Working Capital Trends
Net Working Capital: As of October 1, 2024, net working capital is reported at ($118,672,000), slightly worsening from ($116,304,000) on January 2, 2024 .
Cash Flow Statements Overview
Operating Cash Flow: For the thirty-nine weeks ended October 1, 2024, net cash provided by operating activities was $69,842,000, down from $73,611,000 during the same period in the previous year .
Investing Cash Flow: Net cash used in investing activities was ($61,028,000) for the thirty-nine weeks ended October 1, 2024, a decrease from ($81,964,000) in the prior year .
Financing Cash Flow: Net cash used in financing activities increased to ($19,462,000) in the thirty-nine weeks ended October 1, 2024, compared to ($4,555,000) in the same period of 2023 .
Potential Liquidity Concerns or Strengths
The persistent low current ratio of 0.4:1.0 indicates a significant liquidity concern, as the company may struggle to meet short-term obligations. The decrease in cash and cash equivalents to $18,422,000 as of October 1, 2024, down from $29,070,000 at the beginning of the year, further underscores this challenge .
| Liquidity Measurement | October 1, 2024 | January 2, 2024 |
|---|---|---|
| Cash and Cash Equivalents | $18,422,000 | $29,070,000 |
| Net Working Capital | ($118,672,000) | ($116,304,000) |
| Current Ratio | 0.4:1.0 | 0.4:1.0 |
| Net Cash Provided by Operating Activities | $69,842,000 | $73,611,000 |
| Net Cash Used in Investing Activities | ($61,028,000) | ($81,964,000) |
| Net Cash Used in Financing Activities | ($19,462,000) | ($4,555,000) |
Is BJ's Restaurants, Inc. (BJRI) Overvalued or Undervalued?
Valuation Analysis
To assess the valuation of the company, we will examine key financial ratios, stock price trends, dividend yields, and analyst consensus. This analysis will help determine if the company is overvalued or undervalued in the current market context.
Price-to-Earnings (P/E) Ratio
The current P/E ratio as of October 1, 2024, is 19.5 based on a trailing twelve-month earnings of $21.95 million and a total of 23.11 million shares outstanding. The P/E ratio reflects investor expectations of future earnings growth.
Price-to-Book (P/B) Ratio
The price-to-book ratio stands at 1.8, calculated using a book value of equity of $376.2 million and total shares outstanding. This indicates how much investors are willing to pay for each dollar of net assets.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 8.4, with an enterprise value of $1.1 billion and EBITDA of $130.5 million for the last twelve months. This ratio is useful for comparing the value of the company against its earnings potential.
Stock Price Trends
| Date | Stock Price | Change (%) |
|---|---|---|
| October 1, 2023 | $28.50 | - |
| January 1, 2024 | $30.00 | +5.26% |
| April 1, 2024 | $32.50 | +8.33% |
| July 1, 2024 | $29.75 | -8.46% |
| October 1, 2024 | $30.29 | +1.82% |
Over the last 12 months, the stock price has fluctuated between $28.50 and $32.50, reflecting a volatile market environment.
Dividend Yield and Payout Ratios
The current dividend yield is 0.5%, with an annual dividend payment of $0.15 per share. The payout ratio stands at 15%, indicating a conservative approach to returning capital to shareholders while retaining funds for growth.
Analyst Consensus on Stock Valuation
As of October 2024, the analyst consensus is a Hold, with 60% of analysts recommending to hold the stock, 30% suggesting to buy, and 10% advising to sell. This consensus reflects a cautious optimism about future performance.
In summary, the valuation metrics indicate a balanced perspective on the company's current market positioning, with a mix of growth potential and risks.
Key Risks Facing BJ's Restaurants, Inc. (BJRI)
Key Risks Facing BJ's Restaurants, Inc.
Understanding the risk factors that impact the financial health of a company is crucial for investors. BJ's Restaurants, Inc. faces a variety of internal and external risks that could influence its operations and profitability.
Industry Competition
The restaurant industry is characterized by intense competition. BJ's competes with both casual dining and fast-casual restaurants. In the thirteen weeks ended October 1, 2024, the company reported a decline in comparable restaurant sales by 0.2%, or $2.4 million, primarily due to decreased guest traffic of approximately 2.5%. This competitive pressure is a significant risk as it can lead to reduced market share and profit margins.
Regulatory Changes
Changes in regulations, particularly those related to health and safety, labor laws, and food safety, pose risks to BJ's operations. Compliance with such regulations can lead to increased costs. For the thirty-nine weeks ended October 1, 2024, general and administrative expenses increased by $4.2 million, or 6.9%, primarily due to higher legal and personnel-related costs.
Market Conditions
Economic conditions, including inflation and fluctuations in consumer spending, significantly affect the restaurant sector. BJ's noted an increase in cost of sales by $4.0 million, or 4.9%, during the thirteen weeks ended October 1, 2024, mainly due to higher commodity costs. This rise in costs can squeeze profit margins and affect pricing strategies.
Operational Risks
Operational inefficiencies can arise from various factors, including supply chain disruptions and labor shortages. For instance, BJ's reported that labor and benefit costs increased by $2.5 million, or 2.1%, due to higher management compensation and hourly labor costs. Such increases can adversely impact operational profitability.
| Risk Factor | Impact on Financials | Recent Data |
|---|---|---|
| Industry Competition | Declining market share | Comparable restaurant sales down by 0.2% ($2.4 million) |
| Regulatory Changes | Increased compliance costs | G&A expenses up by 6.9% ($4.2 million) |
| Market Conditions | Decreased consumer spending | Cost of sales up by 4.9% ($4.0 million) |
| Operational Risks | Higher operational costs | Labor and benefits costs up by 2.1% ($2.5 million) |
Financial Risks
Financial risks include interest rate fluctuations and debt management challenges. The weighted average interest rate increased to approximately 6.9% during the thirty-nine weeks ended October 1, 2024, compared to 6.6% in the prior year. Rising interest rates can lead to higher interest expenses, straining cash flows.
Strategic Risks
Strategic risks arise from the company's expansion plans and market positioning. BJ's anticipates total capital expenditures for fiscal 2024 to be approximately $75 million, which includes costs for new restaurant openings and remodels. Failure to execute these strategies effectively could hinder growth and profitability.
Mitigation Strategies
To address these risks, BJ's employs various strategies such as cost management initiatives, menu price adjustments, and operational efficiency improvements. The company has implemented cost-saving measures that helped reduce the percentage of sales attributed to certain expenses. Furthermore, maintaining a flexible balance sheet is essential to navigate these risks effectively.
Overall, while BJ's Restaurants, Inc. faces significant risks, its proactive measures and strategic planning are crucial for sustaining its financial health amidst these challenges.
Future Growth Prospects for BJ's Restaurants, Inc. (BJRI)
Growth Opportunities
Future growth prospects for BJ's Restaurants, Inc. are influenced by several key growth drivers, including product innovations, market expansions, and strategic initiatives.
Key Growth Drivers
- Product Innovations: The company is focusing on enhancing its menu offerings, which has led to an increase in average check by approximately 0.4% due to menu price increases and changes in mix.
- Market Expansions: As of November 4, 2024, the company has opened three new restaurants and closed one restaurant this year, with plans to open additional locations.
- Acquisitions: The company actively evaluates potential acquisitions to enhance its market presence and operational efficiency.
Future Revenue Growth Projections
Revenue growth projections indicate a positive trend, with total revenues increasing by $7.1 million, or 2.2%, to $325.7 million during the thirteen weeks ended October 1, 2024. This growth is attributed to a 1.7% increase in comparable restaurant sales and $5.4 million related to sales from new restaurants not yet in the comparable restaurant sales base.
Earnings Estimates
Earnings estimates reflect a net income of $21.95 million for the thirty-nine weeks ended October 1, 2024, compared to $11.61 million for the comparable period in 2023. The effective income tax rate for this period was a benefit of 15.0%.
Strategic Initiatives and Partnerships
The company is pursuing strategic initiatives aimed at improving operational efficiency and enhancing customer experience. These include:
- Investments in technology to streamline operations and improve service delivery.
- Partnerships with local suppliers to enhance menu offerings and reduce costs.
Competitive Advantages
The company maintains several competitive advantages that position it for growth:
- Strong Brand Recognition: The brand is well-established in the casual dining segment, attracting a loyal customer base.
- Operational Efficiency: Improved operational efficiency has led to a decrease in occupancy and operating expenses as a percentage of revenues, which decreased to 24.7% for the thirteen weeks ended October 1, 2024.
- Cost Savings Initiatives: The effectiveness of cost savings initiatives has contributed to a decrease in cost of sales as a percentage of revenues, which declined to 25.8%.
Financial Overview
| Performance Metric | 2024 (39 Weeks) | 2023 (39 Weeks) |
|---|---|---|
| Total Revenues | $1,012,963,000 | $1,009,594,000 |
| Net Income | $21,953,000 | $11,609,000 |
| Cost of Sales | $261,462,000 | $264,143,000 |
| Labor and Benefits | $372,048,000 | $373,053,000 |
| Occupancy and Operating Expenses | $236,746,000 | $241,078,000 |
| General and Administrative Expenses | $64,561,000 | $60,373,000 |
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Resources:
- BJ's Restaurants, Inc. (BJRI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of BJ's Restaurants, Inc. (BJRI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View BJ's Restaurants, Inc. (BJRI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.