BJRI — BJ's Restaurants, Inc.

BJ's Restaurants Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total Revenue: $358.1 million, a 2.9% increase year-over-year.
• Same-Store Sales: Up 2.4%, driven by 2.2% traffic growth.
• Restaurant-Level Operating Profit: $57.2 million, a $1.6 million increase from last year, with stable margins at 16%.
• Adjusted EBITDA: $37.7 million, representing a 10.5% margin, up 30 basis points year-over-year.
• Cost of Sales: 25.1%, slightly improved from 25.5% in Q4 2025, with inflationary pressures primarily from beef.
• Labor Expense: 36.3% of sales, a 20 basis point increase due to higher workers' compensation costs.
• Net Funded Debt: Reduced to $39.3 million from $61.2 million at the end of 2025.

2. Strategic Updates and Business Highlights:

• The company achieved its seventh consecutive quarter of sales and traffic growth, alongside its sixth consecutive quarter of profit dollar growth.
• Valentine's Day performance was strong, with half of the restaurants setting new daily sales records.
• Marketing spend was reduced by 20% year-over-year, with a strategic shift to support the high-volume celebration season in Q2.
• New menu items, including a premium Wagyu burger and revamped chicken sandwiches, are set to launch in Q3.
• The company is focused on enhancing guest experience and operational efficiency through remodels and menu evolution.

3. Forward Guidance and Outlook:

• BJ's reiterates its full-year guidance for comparable restaurant sales growth of 1% to 3%.
• Anticipates Q2 to be the peak for commodity inflation, with a slight increase in cost of sales expected.
• Plans to implement a midyear menu update to optimize product mix and offset inflation impacts in the second half of the year.
• The company is on track to open new restaurants in Joliet, Illinois, and Buckeye, Arizona, with a goal of mid-single digit openings next year and double digits by 2028.

4. Bad News, Challenges, or Points of Concern:

• The company faced approximately 70 basis points of weather-related headwinds impacting sales.
• Labor costs are a concern, with rising workers' compensation expenses affecting margins, although improvements in labor efficiency are expected.
• The average check remained flat in Q1, raising questions about its contribution to future sales growth.

5. Notable Q&A Insights:

• Management expressed confidence in the potential for average check growth as new menu initiatives take hold.
• The company is still in the early stages of its growth journey, with foundational improvements being made to support future expansion.
• The impact of gas price volatility on consumer behavior was acknowledged, but management noted resilience among their customer base.
• The upcoming World Cup was highlighted as a potential opportunity for increased traffic, with plans for localized marketing efforts.
• The activity-based labor model is being rolled out, with positive early results in guest metrics and operational efficiency.

Overall, BJ's Restaurants reported a solid Q1 performance with continued growth in sales and traffic, while addressing challenges related to costs and labor. The outlook remains positive with strategic initiatives aimed at enhancing guest experience and operational efficiency.