Last quarter, the company posted a positive earnings surprise of 37.50%. However, it missed on earnings in two of the trailing four quarters, bringing the average positive surprise to 11.75%.
BJ's Restaurants, Inc. Price and EPS Surprise
Let's see how things are shaping up for this announcement.
Factors Likely to Influence Q1 Results
In order to navigate the challenging macro environment, BJ's Restaurants has been undertaking several major sales building initiatives. By implementing these strategies, the company aims to differentiate its food quality and uniqueness, improve speed of service, and refine its brand messaging and media strategies along with improving value to guests and leveraging its broad menu in the takeout and delivery channel. This should bolster the company's performance in the to-be-reported quarter
In fact, menu innovation, promotional offerings and aggressive marketing and operational strategies have remained strong points for the company in the past and should further drive sales in the first quarter as well.
Notably, 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 in the first quarter as well. BJ's Restaurants is also committed toward raising its operating margins through cost-containment initiatives.
However, higher labor costs and expenses incurred to execute the initiatives are expected to keep profits under pressure. Furthermore, gauging the current discouraging macro environment, the company has decided to put off new openings for some time, which may further dent sales growth in the quarter.
Our proven model does not 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. That is not the case here, as elaborated below.
Zacks ESP: BJ's Restaurants has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 34 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: BJ's Restaurants currently carries a Zacks Rank #3, which when combined with an ESP of 0.00% makes surprise prediction difficult.
Note that we caution 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 restaurant companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Restaurant Brands International, Inc. QSR has an Earnings ESP of +5.71% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .
Red Robin Gourmet Burgers, Inc. RRGB has an Earnings ESP of +17.24% and a Zacks Rank #3.
Wingstop, Inc. WING has an Earnings ESP of +6.67% and a Zacks Rank #3.
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