A Close Look at BJ's Restaurants

BJ's Restaurants BJRI is one of the few casual dining chains that has managed to expand in the current economic environment. As of January 9th, the 34-year old Huntington Beach-based company owns and operates 115 restaurants across the Untied States. The BJ'S Restaurant & Brewery brand includes both BJ's Restaurant & Brewhouse and BJ's Pizza and Grill. Standing behind their motto “to be the very definition of ‘WOW' for the casual dining experience,” BJ's opened 13 stores in 2011, 10 in 2010, and the management team is planning to open 15 by the end of 2012. Recent consumer confidence figures have lent credence to the idea that the US economy is showing signs of recovery. If this holds true, BJ's Restaurant may benefit from expansion in the future, even if short term capital expenditure and overhead increases result in declining revenue. BJ's reported preliminary, unaudited revenues of $171.8 million for the fourth quarter of fiscal year 2011. This represented an increase of approximately 29% when compared to the fourth quarter of 2010. So, what is BJ's Restaurants doing correctly in order to be able to expand and profit during trying economic times? BJ's attempts to appeal to a large variety of guests with their menu options. Not only does BJ's cater to vegetarians, they also have an entire gluten free menu. More importantly they attract customers with their price points. BJ's has kept most of their pricing power in reserves during the past couple years, offering a wide range of entrees priced from $8.50 to $19.95. However, BJ's may not be a good investment, as the company may not look good on its financial metrics. BJRI's P/E ratio is much higher than the industry average, which means investors have high expectation for its performance despite slumping 3rd quarter revenue. In addition, fierce competition among casual dining restaurants is expected to continue. What will BJ's do to continue to surprise its customers and increase its growth rate? Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.