BJRI - BJ's Restaurant posts stronger than expected profits eyes price increases

BJ’s Restaurant ( NASDAQ: BJRI ) shares rose sharply in Thursday’s extended session as Q4 profits outpaced expectations.

The California-based restaurant chain reported an 18.2% rise in revenue from the prior year to $344.2M and $0.17 in earnings per share. Analysts had anticipated $0.06 in earnings per share on $343.69M in revenue. Comparable restaurant sales increased 6.6% from the prior year, below the 7.98% consensus estimate.

“Despite ongoing inflationary pressures, fourth quarter restaurant margins improved year over year by 250 basis points to 12.1%, excluding the benefits from changes in gift card breakage estimates in 2022 and the Employee Retention Tax Credit in 2021,” CEO Greg Levin commented. “Our restaurant level margin growth was driven by higher sales, additional progress with our margin enhancement initiatives and, to a lesser extent, the extra operating week in fiscal 2022.”

He added that the company is focused on defending profits into 2023 through pricing actions and “additional margin improvement initiatives.” Levin said that first quarter sales and traffic trends are proving positive thus far and he expects first quarter comparable restaurant sales to be in the high single-digits.

“In 2023, our capital allocation strategy will continue to prioritize high-return investments, including a mix of new restaurant growth, restaurant remodels and other sales building and margin-enhancing initiatives,” Levin concluded. “We are excited about the opportunities to expand and enhance the BJ’s concept in the near-term and remain confident in the long-term potential to grow to at least 425 restaurants while delivering an attractive margin profile and creating significant shareholder value.”

Shares of BJ’s Restaurants ( BJRI ) rose 1.2% shortly after the print .

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