BJ's Restaurants Inc.
) recently announced the opening of a new restaurant at Puyallup,
Wash. The opening marks the first of the company's 17 targeted
openings for 2013. The total targeted openings include the
shifting of one of the company's small format "Pizza and Grill"
restaurants to a new site in Eugene, Ore.
The latest restaurant, which is located in suburban Seattle,
is spread across approximately 8,500 square feet and accommodates
around 270 guests. We expect the variety of menu offered at the
new unit and contemporary ambience to attract guests. The new
Puyallup unit is the third BJ's restaurant in the state of
We have noticed that BJ's Restaurants has mainly expanded in its
existing markets in California and Texas in the last three years
citing plenty of growth opportunities. In California, the company
currently has 61 restaurants while Texas boasts 28 units.
Now the company is considering other potential new markets for
entry in 2013 and 2014 to realize untapped opportunities.
According to management, in the long run, there exists the
possibility of opening at least 425 outlets in the U.S.
Washington is a relatively newer market with just 3 BJ's
Restaurants. As per the National Restaurant Association, the
restaurant industry in Washington plays a vital role in the
state's revenues. According to this research site, Washington's
restaurants are expected to record $10.9 billion in sales in
While the aforesaid strategy is a positive, there is a flip side
to it. Penetration into new markets will involve some risk for
BJ's Restaurants. There will be an attendant headwind of higher
pre-opening costs compared with matured trade areas, in which the
company already has support infrastructure. BJ's Restaurants
enjoys less tenant improvement allowance and lower construction
period rent in its existing markets.
BJ's Restaurants currently carries a Zacks Rank 4 (Sell). Some
other restaurant industry stocks with a favorable Zacks Rank
Red Robin Gourmet Burgers Inc.
Burger King Worldwide Inc.
Cracker Barrel Old Country Store Inc.
). While Red Robin and Cracker Barrel retain a Zacks Rank #1
(Strong Buy), Burger King carries a Zacks Rank #2 (Buy).
BJ'S RESTAURANT (BJRI): Free Stock Analysis
BURGER KING WWD (BKW): Free Stock Analysis
CRACKER BARREL (CBRL): Free Stock Analysis
RED ROBIN GOURM (RRGB): Free Stock Analysis
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