BJ's Restaurants Soar 12% As Q3 Profit Tops View

(RTTNews) - Shares of BJ's Restaurants, Inc. (BJRI) soared nearly 12 percent in extended trading on Thursday after the casual dining restaurants operator reported a profit for the third quarter that topped analysts expectations, while quarter revenues missed their estimates.

Profit for the quarter surged 78 percent from last year, reflecting improved operating margins and revenues growth.

"The 2014 third quarter represented the third consecutive quarter of progress following the implementation of our initiatives aimed at reigniting sales and improving our operating performance," President and CEO Greg Trojan said in a statement.

The Huntington Beach, California-based company reported net income of $6.48 million or $0.23 per share for the third quarter, sharply higher than $3.65 million or $0.13 per share in the prior-year quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 9.7 percent to $206.45 million from $188.25 million in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of $208.25 million.

Total restaurant operating weeks increased 10.4 percent to 1,961 from last year's 1,777.

Comparable restaurant sales increased 0.3 percent, driven by a 0.7 percent increase in guest counts or traffic, partially offset by a lower average check.

"Our sales driving initiatives are focused around affordability, food quality and innovation, speed and hospitality. Progress in each of these areas drove positive comparable restaurant sales for the first time in five quarters," Trojan stated.

Restaurant level margins for the quarter expanded 130 basis points to 17.6 percent, driven by sales momentum combined with our cost containment and Project Q initiatives, which is focused on improving kitchen productivity while enhancing our food quality and consistency.

Operating margin improved 200 basis points to 3.9 percent from last year's 1.9 percent as total costs and expenses, as a percentage of total revenues, declined 200 basis points.

During the third quarter, BJ's opened three new restaurants in Oviedo, Florida, Denton, Texas and Cedar Park, Texas. The company also earlier this month, in the fourth quarter, opened a new restaurant in Richmond, Virginia.

"With nine new restaurants opened year to date and an approximate 12% year-over-year increase in operating weeks, BJ's is on track to achieve another solid year of double digit operating week growth," Trojan added.

The company noted that it currently anticipates that the benefit of the new 2014 restaurant openings coupled with its planned opening of at least 15 new restaurants next year will further expand its operating weeks by about 10 percent in fiscal 2015.

The company added that its development team is also now focused on finalizing a plan for restaurant openings in fiscal 2015 and is building a solid pipeline for fiscal 2016.

FSL closed Thursday's regular trading session at $33.20, down $2.03 or 5.76% on a volume of 0.87 million shares. However, the stock soared $3.82 or 11.51% in after-hours trading.