What Happened?

Shares of american restaurant chain BJ’s Restaurants (NASDAQ:BJRI) jumped 10.9% in the pre-market session after the company delivered exceptional fourth-quarter 2024 results, which blew past analysts' same-store sales expectations, enabling it to post revenue and EBITDA beats. A big part of that came from strong guest traffic, thanks to promos like the Pizookie Meal Deal and holiday party offerings, which helped drive a 5.5% increase in comparable restaurant sales. Restaurant-level operating profit margin improved meaningfully reflecting efficiency initiatives and stronger sales leverage. That, in turn, fueled a surge in adjusted EBITDA, helping the company outperform Wall Street's profit forecasts. That said, earnings still came in below expectations. Looking ahead, management expects sales growth to slow a bit to around 2%–3% in 2025. But on the bright side, their full-year EBITDA guidance was stronger than expected. Zooming out, we think this was a solid quarter.

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What The Market Is Telling Us

BJ’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for BJ's and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 10 months ago when the stock gained 15.4% on the news that the company reported first-quarter results that beat analysts' same-store sales, gross margin, and EPS expectations. The results could have been better as same-store sales fell 1.7% due to heavier-than-usual winter weather in January. This affected restaurant traffic, which fell approximately 9% in January before recovering to negative mid-single digits in February and March. As these headwinds are mostly concentrated in the first quarter, management expects second-quarter comp sales to be only slightly negative due to less pricing partly offset by improving traffic trends. The second quarter is expected to benefit from key events, including Mother's Day, Father's Day, and graduation celebrations. Zooming out, we think this was a great quarter that shareholders will appreciate.

BJ's is up 5.4% since the beginning of the year, and at $37.84 per share, it is trading close to its 52-week high of $38.44 from November 2024. Investors who bought $1,000 worth of BJ’s shares 5 years ago would now be looking at an investment worth $974.76.

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