Personal Finance
EPS

Why Did BJ's Restaurants, Inc. Shares Gain 15% in February?

A cookie with ice cream on top.

Sometimes investors hang their hats on the slightest bit of good news. That appears to be what happened in February when shares in BJ's Restaurants (NASDAQ: BJRI) jumped after the chain reported its fourth-quarter earnings.

What happened

The restaurant chain saw its total revenue fall by 1.7% in Q4, but that number was deceptive as last year's quarter contained an extra week. If you exclude that week, sales actually rose by 6.9% compared to the year-ago period. In addition, comparable-restaurant sales rose by 1.6% for the quarter.

Net income came in at $23.5 million, with earnings per share (EPS) of $1.12. That included a tax benefit of $15.7 million due to changes in United States tax law. Without the tax benefit, income would have been $7.8 million, with EPS of $0.37.

A cookie with ice cream on top.

BJ's "Pizookie" is basically a cookie served with ice cream. Image source: BJ's Restaurants.

So what

CEO Greg Trojan was happy with the results. In his remarks in the earnings release, he basically said that the company was operating according to plan.

"This past year we undertook a series of challenging initiatives to continue our quest to be the leading casual dining concept," he said. "Our team members embraced this challenge as they learned and mastered new cooking methods, became proficient at taking orders on handheld devices and reorganized their processes to bring efficiencies to our growing off-premise revenue stream."

While the actual profits were small, investors were clearly happy with the company. Shares in the restaurant chain closed January at $37.75, then climbed to $43.50 at the end of February, a 15% gain, according to data provided by S&P Global Market Intelligence .

Now what

In 2017, BJ's rolled out a new slow-roast menu. It also added delivery at many of its locations. So far, those initiatives have been successful, but it's still very early in the game to know if they will work long-term.

The Q4 results show that the chain may have turned a corner, but things could easily still go south. These are encouraging numbers, but certainly not proof of a long-term turnaround.

10 stocks we like better than BJ's Restaurants

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and BJ's Restaurants wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool recommends BJ's Restaurants. The Motley Fool has a disclosure policy .

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.

In This Story

EPS BJRI

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More