Bad weather and softness among lower-income customers are putting a dent in sales at BJ’s Restaurants.
Same-store sales at the casual-dining chain rose just 0.6% year over year in the fourth quarter. That growth was driven by a price increase of 7% to 8%. And comps were in the negative mid-single digits through the first six weeks of 2024 because of widespread storms and winter weather, executives said Thursday.
“Each week has had some degree of inclement weather that has kept guests at home,” CEO Greg Levin told analysts, according to a transcript from AlphaSense. “I think it’s going to be a little bumpy here in the first quarter.”
Despite those challenges, Levin said BJ’s has outperformed the broader casual-dining segment, citing data from Black Box Intelligence.
Weather has not been the only thing affecting sales at the 216-unit chain. BJ’s has also seen customers visiting less often, particularly lower-income consumers. That echoes a trend highlighted by other chains this year, from McDonald’s to Chili’s.
BJ’s also noted a drop in off-premise sales and transactions. Part of that is by design, as the brand pulled back on promoting third-party delivery. But it could also be a sign of a more cautious consumer. “You're seeing consumers spend less on off-premise than where they were a year ago,” Levin said.
That said, on-premise sales were positive in the single digits in Q4, and BJ’s is directing most of its attention toward growing that business, Levin said.
It is continuing to invest in remodels, for instance, with 20 locations slated for a facelift this year. It’s also planning to spend more on TV advertising to boost brand awareness. But it has also done less discounting in favor of more profitable sales.
Indeed, BJ’s has been intensely focused on improving its bottom line. Last year, it rolled out a series of cost-cutting initiatives, including a smaller menu, that generated $35 million in savings. It expects to add to that total in 2024. And those efforts are bearing fruit: Restaurant margins increased 150 basis points in Q4, to 14.4%.
The Huntington Beach, Calif.-based chain is facing pressure from an activist investor to sell itself. Pleasant Lake Partners, which owns 9.5% of BJ’s shares, argued that the chain is underperforming but would make an attractive acquisition target.
BJ’s stock was up more than 2% late Friday morning.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.