BJRI — BJ's Restaurants, Inc.

BJ's Restaurants Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $358.1 million, up 2.9% year-over-year.
• Same-Store Sales: Increased by 2.4%, driven by 2.2% traffic growth and a 0.2% rise in average check.
• Restaurant-Level Operating Profit: $57.2 million, a $1.6 million increase from the previous year, maintaining a margin of 16%.
• Adjusted EBITDA: $37.7 million, representing a 30 basis point increase to 10.5% of sales.
• Cost of Sales: 25.1%, slightly improved from 25.5% in Q4 2025, with operational improvements mitigating beef inflation impacts.
• Labor Expense: 36.3% of sales, a 20 basis point increase year-over-year, primarily 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

• Sales Growth: Marked the seventh consecutive quarter of sales and traffic growth, with notable Valentine's Day performance where half of the restaurants set new daily sales records.
• Marketing Efficiency: Reduced media spend by approximately 20% year-over-year while optimizing marketing strategies.
• Menu Innovations: Successful launches of new items, including a premium Wagyu burger and refreshed chicken sandwiches, contributing to increased guest satisfaction and sales.
• Guest Experience: Improvement in Net Promoter Score by roughly 10% and better team member retention compared to pre-pandemic levels.
• Unit Development: Two new restaurant openings planned for later in 2026 in Buckeye, Arizona, and Joliet, Illinois, with a focus on refining prototypes for better guest experiences.

3. Forward Guidance and Outlook

• 2026 Full-Year Guidance: Reiterated expectations for comparable restaurant sales growth of 1% to 3%.
• Second Quarter Expectations: Anticipated peak in commodity inflation, with plans for a mid-year menu update to optimize product mix and offset inflation impacts.
• Marketing Strategy: Increased focus on the celebration season in Q2, with expectations for strong sales performance.

4. Bad News, Challenges, or Points of Concern

• Weather-Related Headwinds: Approximately 70 basis points of sales volatility attributed to adverse weather conditions.
• Labor Costs: Rising workers' compensation costs are a concern, although management expects normalization in the latter half of the year.
• Flat Average Check Growth: Average check growth was flat in Q1, raising questions about future contributions to same-store sales growth.
• Competitive Pressures: Ongoing need to monitor consumer behavior and competitive dynamics in the casual dining sector.

5. Notable Q&A Insights

• Average Check Growth: Management indicated a potential for average check growth to improve as new menu initiatives take hold, with expectations of a range from flat to +1% for the year.
• Unit Growth Strategy: Plans for mid-single-digit unit growth in the near term, aiming for double digits by 2028, with a focus on optimizing existing markets before expanding into new areas.
• Consumer Resilience: Management noted strong consumer resilience despite economic pressures, with consistent performance across Q1 and into Q2.
• Pizookie Meal Deal: Positive reception and plans for tiering options to enhance customer engagement and drive additional sales.

Overall, BJ's Restaurants reported a solid Q1 2026 performance, with strong sales growth and strategic initiatives in place to enhance guest experience and operational efficiency, despite facing some challenges related to labor costs and weather impacts. The company remains optimistic about its growth trajectory and market positioning.