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BJ's Restaurants (BJRI) Q4 Earnings: What's in the Cards?

BJ's Restaurants, Inc.BJRI is scheduled to report fourth-quarter and full-year 2016 results on Feb 23, after the market closes .

Last quarter, BJ's Restaurants posted a 6.25% negative earnings surprise. However, the company's trailing four-quarter average earnings surprise is a positive 4.94%.

Let's see how things are shaping up for this announcement.

BJ's Restaurants, Inc. Price and EPS Surprise

BJ's Restaurants, Inc. Price and EPS Surprise | BJ's Restaurants, Inc. Quote

Factors Likely to Influence Q4 Results

Menu innovation, promotional offerings and aggressive marketing and operational strategies have remained strong points for the company in the past and should drive sales in the fourth quarter as well. Also, the company's investments in technology-driven initiatives are expected to improve the speed of service and thereby enhance guest experience and profitability.

The company's Project Q initiative, which reduced average kitchen hours and led to labor efficiencies, has resulted in strong margins in the past few quarters and is expected to continue doing so. Further, the company is committed to raise its operating margins through cost-containment initiatives.

However, higher labor costs due to higher wages and expenses incurred to execute the initiatives are expected to keep profits under pressure. Furthermore, the company anticipates social and political issues, increasing global uncertainty and weakening consumer confidence to hurt traffic and pull down the sales.

In fact, gauging the current discouraging macro environment, the company has decided to put off new openings for some time, which may further dent sales growth.

Earnings Whispers

Our proven model does not conclusively show that BJ's Restaurants is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP : BJ's Restaurants has an Earnings ESP of -2.50%. This is because the Most Accurate estimate stands at 39 cents, whereas the Zacks Consensus Estimate is pegged higher at 40 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : BJ's Restaurants has a Zacks Rank #3 which increases the predictive power of ESP. However, the company's negative Earnings ESP makes surprise prediction difficult.

Notably, we caution you against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Jack in the Box Inc. JACK has an Earnings ESP of +2.42% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

SpartanNash Company SPTN has an Earnings ESP of +2.04% and a Zacks Rank #2.

The Priceline Group Inc. PCLN has an Earnings ESP of +0.46% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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