BJ’s Restaurants (NASDAQ:BJRI) raised its full-year sales and profit outlook after fiscal 2026 third-quarter traffic growth helped drive higher revenue and restaurant-level margins.
Revenue rose 8.6% to $358.6 million, while comparable restaurant sales increased 8.1%. Traffic grew 8.3%, partially offset by a 0.2% decline in average check. The company said it marked its ninth consecutive quarter of sales and traffic growth and its eighth consecutive quarter of profit growth.
CEO and President Lyle Tick said the quarter exceeded internal expectations. He attributed the performance to a combination of the company’s Pizookie Meal Deal, seasonal desserts, menu improvements and marketing, alongside operating discipline at its restaurants.
Restaurant-level operating profit rose $11.5 million to $52.9 million, and the corresponding margin expanded 220 basis points to 14.7%. Adjusted EBITDA increased to $31.4 million from $21.1 million a year earlier, with its margin rising 240 basis points to 8.8%.
Higher Outlook, Steady Fourth-Quarter Expectations
BJ’s now expects full-year comparable restaurant sales growth of approximately 4.7%, up from its prior forecast of 3% to 4%. The company also raised its outlook for restaurant-level operating profit to $233 million to $237 million from $228 million to $235 million, and for adjusted EBITDA to $149 million to $154 million from $145 million to $152 million.
CFO Todd Wilson said the guidance increase largely reflects the third-quarter results flowing through to the full year, rather than a significant change in fourth-quarter expectations. Management expects fourth-quarter comparable traffic and sales to grow despite comparisons with a strong period a year earlier.
The outlook includes an approximately 100-basis-point fourth-quarter headwind from unfavorable shifts in Halloween and Christmas, Wilson said. Tick said performance in the quarter to date was in line with expectations and that he felt good about the company’s promotional programs.
BJ’s reduced its full-year capital expenditure forecast to approximately $80 million from a previous range of $85 million to $95 million. Its share repurchase guidance remained at up to $50 million, subject to market conditions.
Menu Changes Support Traffic and Margins
Wilson said third-quarter sales and traffic gains extended across every day of the week, daypart and revenue center. BJ’s exceeded Black Box casual-dining benchmarks for both sales and traffic, with traffic outperformance of more than 800 basis points, he said.
The 0.2% decline in average check was smaller than the 1.8% decline in the second quarter. Wilson said menu renovations were encouraging favorable shifts toward pizza, burgers and chicken sandwiches, while higher-tier steaks and slow-roast offerings showed initial stabilization.
Tick said revamped pizza, burger and chicken sandwich categories were generating higher sales, average checks and dollar margins. The company has reinvested more than $1.5 million in product quality across those categories, he said.
For the holiday season, BJ’s is featuring a 16-ounce Hawaiian ribeye and shareable sides led by truffle mac and cheese. Tick said the national promotion would allow the company to gather information that could help accelerate future menu changes. Seasonal desserts include the Nutella Gone Bananas Pizookie and Biscoff Brown Butter Pizookie.
Cost of sales improved 40 basis points to 25.3% of revenue, while labor expense improved 90 basis points to 36.2%. Wilson said commodity inflation eased to approximately 2% from 5% in the second quarter. He also cited lower comps and discounts as a share of revenue and improved operating execution.
Expansion and Debt Reduction
BJ’s invested $19.9 million in capital expenditures during the quarter and remodeled two restaurants, bringing its year-to-date total to 12. It expects one more remodel in the fourth quarter and plans to accelerate the pace in 2027.
The company, which has 219 existing restaurants, expects to open a location in Joliet, Illinois, in the fourth quarter and another in Buckeye, Arizona, in the first quarter. Tick said investors should think of around four or five openings in 2027, while cautioning that permitting and construction can affect timing.
BJ’s repaid $28 million of debt during the third quarter and ended the period with approximately $4 million in net debt, down from $61 million at the start of the year. It repurchased about $9 million of shares through the third quarter and another $1.6 million in the fourth quarter to date.
About BJ’s Restaurants (NASDAQ:BJRI)
BJ’s Restaurants, Inc (NASDAQ: BJRI) operates and develops casual dining restaurants under the BJ’s Restaurant & Brewhouse brand. Its restaurants offer a broad menu centered on deep-dish pizza, along with appetizers, salads, sandwiches, burgers, entrees, desserts and other American-style dishes.
The company is also known for producing and serving craft beer, including its proprietary BJ’s beers, at many of its locations. Its restaurants typically combine full-service dining with a brewery-inspired atmosphere and offer dine-in, takeout, delivery and catering services, depending on the location.
BJ’s traces its origins to 1978, when the first restaurant opened in Southern California.
