BJ's Restaurants, Inc. Q3 FY2025 earnings call

Key Points

• Fifth consecutive quarter of sales and traffic growth, and fourth consecutive quarter of profit expansion.
• Q3 had 0.5% same-store sales growth, with the latter part of the quarter averaging +1.5% comp growth, accelerating into Q4.
• Restaurant level operating margins were 12.5% and EBITDA margins 6.4%, improving year-over-year.
• Progress on strategic priorities:
  • Team member experience: Rolled out new company values, comprehensive manager and team member training to be fully implemented in Q1 2026.
  • Handcrafted food and beverage: Launching pizza refresh next week, 2 exciting seasonal Pizookies in November, and continuing menu simplification.
  • Wow Hospitality: Focus on improving guest satisfaction, throughput, and efficiency, with new training driving consistent experience.
  • Technology initiatives: AI-driven activity-based labor model rolled out to 30% of system by start of 2026, and remodel program continuing.
• Continued work on simplification, removing menu items and SKUs, and improving guest and team member experience.

In the third quarter, BJ's Restaurants achieved 0.5% same-store sales growth, with the latter part of the quarter averaging roughly +1.5% comp growth. Profit-wise, restaurant level operating margins were 12.5% and EBITDA margins were 6.4%, representing improvements of 80 and 70 basis points year-over-year. Sales for the third quarter were $330 million, a 1.4% increase versus the prior year, driven by traffic growth. The Pizookie Meal Deal continued to be a key value platform, contributing to traffic and frequency improvements.

Guidance

• Reiterated full year top line guidance of approximately 2%.
• Restaurant-level operating profit guidance: $211 million to $219 million.
• Adjusted EBITDA guidance: $132 million to $140 million.
• Capital expenditures guidance: $65 million to $75 million.
• Updated share repurchase expectations to $65 million to $80 million depending on market conditions.

Risks

• General risks associated with forward-looking statements, including potential material differences between actual results and projections due to new information, future events, or market conditions. Also, risks related to market competition, consumer spending patterns, and operational challenges that could impact financial performance.

Q: What drove the acceleration in traffic?

A: Lyle Tick mentioned a combination of foundational improvements in guest metrics, satisfaction, value, growth of the Pizookie Meal Deal, and increased social dialogue and influencer engagement, including the Spooky Pizookie's social phenomenon.

Q: Any surprises in the business since starting as CEO?

A: Lyle Tick stated he's pleased with the performance and progress, not particularly surprised, and excited about the future direction.

Q: Thoughts on fourth quarter same-store sales guidance?

A: Lyle Tick said they're looking at about 2% to 2.5% growth, landing around 2% for the year.

Q: Remodels and new unit growth plans?

A: Lyle Tick mentioned continuing the remodel program, with a moderated pace in 2026 to test the refreshed prototype, and planning to open 2 new locations in the back half of 2026, focusing on building out from existing footprints in concentric circles.

Q: Pizza launch impact on check?

A: Daniel Duran said test locations saw a slight uptick in average check, with about a 10% uplift in pizza incidence, and the launch will be driven by social PR, influencer, and in-restaurant merchandising.

Q: Share repurchase philosophy?

A: Brad Richmond said there's plenty of capacity on the balance sheet, and they'll continue repurchasing as market conditions allow, keeping some dry powder for new unit growth and remodels.

Q: Pricing power and check pressure?

A: Lyle Tick said they'll be judicious with pricing, focusing on the value equation, and seeing value scores and guest metrics rise, which supports potential pricing opportunities while monitoring traffic and metrics.