BJ's Restaurants Q1 Earnings Call Highlights

Key Points

• BJ’s delivered its seventh consecutive quarter of sales and traffic growth with same-store sales up 2.4% and traffic up 2.2%, outpacing Black Box casual-dining benchmarks and showing early second-quarter momentum.
• Profitability improved as revenue rose 2.9% to $358.1M, restaurant-level operating margin was 16%, and adjusted EBITDA increased to $37.7M (margin 10.5%, +30 bps), though management noted cost pressures from beef inflation and higher workers’ compensation.
• The company reiterated full-year guidance while deploying free cash flow to growth and balance-sheet repair—$15.8M capex (five remodels), repurchased ~151,000 shares for $5.3M, repaid $23M of debt, and cut net funded debt to $39.3M, with plans for incremental unit growth through 2028.

BJ's Restaurants NASDAQ: BJRI reported fiscal first-quarter 2026 results highlighted by continued traffic-driven comparable sales growth and margin expansion, while management pointed to early second-quarter momentum and reiterated full-year guidance.

Sales and traffic gains extend multi-quarter streak

Chief Executive Officer and President Lyle Tick said the company delivered its seventh consecutive quarter of sales and traffic growth, with same-store sales up 2.4% primarily driven by 2.2% traffic growth. He added that BJ’s outperformed Black Box casual dining benchmarks by roughly 120 basis points on sales and close to 400 basis points on traffic.

Chief Financial Officer Todd Wilson said total revenue increased 2.9% year over year to $358.1 million. Average check rose 0.2% in the quarter, and Wilson said the traffic-led growth reflects “the continued strength of our brand and our increasing guest frequency.”

Tick also cited “approximately 70 basis points of weather-related headwinds” in the quarter, adding that teams managed the volatility while growing sales and protecting margins.

Margins, costs, and profitability

On profitability, management reported stable restaurant-level margins and year-over-year growth in profit dollars. Tick said restaurant-level operating margins were 16%, while Wilson said restaurant-level operating profit totaled $57.2 million, up $1.6 million from the prior year.

Adjusted EBITDA rose to $37.7 million from $35.4 million a year ago, with adjusted EBITDA margin at 10.5%, an increase of 30 basis points, according to both executives.

Wilson provided detail on key cost lines:

• Cost of sales: 25.1% of sales, up 10 basis points year over year, which Wilson attributed primarily to “anticipated beef inflation,” partially offset by reduced food waste and progress in a “gross to net” initiative.
• Labor expense: 36.3% of sales, up 20 basis points year over year, which Wilson said was “driven entirely by higher workers’ compensation costs resulting from rising medical expenses,” despite fewer claims. He said the company expects this to “begin to normalize in the back half of the year.”
• Occupancy and operating expense: 22.7% of sales, down 30 basis points, reflecting a shift of marketing spending into the second quarter and improved channel mix with more focus on social and digital.
• G&A: $22 million, or 6.1% of sales, down 20 basis points.

Wilson noted depreciation expense increased 110 basis points year over year “largely due to a one-time catch-up entry,” adding that excluding that item, the underlying increase was 30 basis points, tied to remodel and new unit investment.

Menu, marketing, and guest experience initiatives

Tick said BJ’s strategic priorities remain focused on “building a winning culture, improving our food, enhancing our atmosphere, and driving wow hospitality and executional consistency.” He also pointed to improvements since the third quarter of 2024, including Net Promoter Score up roughly 10% and team member retention better than pre-pandemic levels, with turnover tracking more than 12 percentage points below Black Box industry benchmarks on a trailing 12-month basis.

On product initiatives, Tick said total beverage sales stabilized in the quarter behind growth in non-alcoholic beverages. He highlighted a “successful seasonal beer offering” called Waterfall beer, described as a collaboration with Sapporo Breweries.

Tick also discussed menu tests and rollouts:

• Chicken sandwiches: Renovations tested positively and are expected to roll out as the company moves into Q3.
• Wagyu burger: A premium burger with a custom blend patty moved into a full-system limited time feature and is expected to become part of the menu lineup as the company moves into Q3.
• Pizza: Tick said pizza category sales are up about 20% since its introduction, with encouraging signs it is improving repeat visits among guests who try it.
• Burgers: Since launching the All-American Smash Burger in June 2025, he said the burger category is delivering roughly 30% more sales than prior to the launch.

During Q&A, Tick said the company’s Mike’s Hot Honey pizza limited-time offering performed well, calling it the third-highest performing pizza in the lineup, and said the company had moved into a new pizza LTO featuring a burrata pizza. When asked where increased pizza and burger sales were coming from, Tick said the company has seen “a little bit of movement” away from some items in its “steaks and Slow-Roasted category” and in “some of our specialty entrees.”

On value and marketing, Tick said BJ’s delivered first-quarter results with roughly 20% lower media spend year over year while maintaining performance. He added the company plans for full-year marketing spend to be flat year over year, with a strategic shift of spending from the first quarter into the second quarter to support its high-volume “celebration season.”

Capital allocation and balance sheet

Wilson said strong performance generated significant free cash flow that BJ’s used for capital investment, buybacks, and debt repayment. The company spent $15.8 million in capital expenditures, including completing five remodels, repurchased approximately 151,000 shares for $5.3 million, and repaid $23 million of debt.

Wilson said net funded debt ended the quarter at $39.3 million, down from $61.2 million at the end of 2025.

Guidance reiterated; check outlook and unit growth plans discussed

Wilson said the company is reiterating all metrics in its full-year 2026 guidance. He added that comparable sales and traffic “to start the second quarter are off to a strong start” and continue to beat the Black Box benchmark.

In response to an analyst question on average check expectations within the company’s 1% to 3% same-store sales guidance range, Wilson said BJ’s model assumes check “in a range of, call it, flat to +1” for the year. Tick and Wilson pointed to initiatives such as the Wagyu Burger, chicken sandwich updates, and testing a premium tier for the Pizookie Meal Deal as potential contributors to check and mix over time.

Wilson also said the company expects commodity inflation to peak in Q2, likely pushing Q2 cost of sales marginally higher than Q1. He said a mid-year menu update and planned pricing actions are expected to “fully offset the inflation impact in the second half of the year.” He added that occupancy and operating expenses are expected to be about 23% of sales in Q2 as BJ’s reinvests marketing spending.

On development, Tick said two planned openings later this year—Buckeye, Arizona and Joliet, Illinois—will reflect a new prototype with an improved guest experience. In Q&A, he outlined a longer-term view of unit growth, saying BJ’s expects to open “a couple this year,” “mid-single digits next year,” and to move “towards double digits as we go into 2028 and beyond,” while emphasizing a “concentric circle” approach expanding from existing markets.

Wilson said construction is underway for Joliet, and the company expects to break ground in Buckeye in coming weeks. Pre-opening expenses are expected to be nominal in Q2 and Q3, with about 80% concentrated in Q4 as the restaurants open; he reiterated a target of roughly $700,000 in pre-opening costs per opening.

About BJ's Restaurants NASDAQ: BJRI

BJ's Restaurants, Inc is a publicly traded casual dining chain known for its deep‐dish pizzas, California‐style thin crust offerings and in‐house craft beer selections. Operating under the BJ's Restaurant & Brewhouse brand, the company combines a microbrewery concept with full‐service dining, offering an extensive menu that includes appetizers, salads, pasta dishes, sandwiches and the signature Pizookie dessert.

Founded in 1978 in Orange County, California, BJ's Restaurants began as BJ's Chicago Pizzeria, bringing a Chicago‐style pizza experience to the West Coast.

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