BJ's Restaurants, Inc. (BJRI) - Q2 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, and the twenty-six weeks ended on that date. BJ's Restaurants, Inc. operates 219 full-service, company-owned restaurants across 31 U.S. states. The company differentiates itself through a high-quality menu, craft beer production, and a high-energy dining atmosphere.
Key Financial Metrics
| Metric | 13 Weeks Ended June 30, 2026 | 26 Weeks Ended June 30, 2026 | 26 Weeks Ended July 1, 2025 (Prior Year) |
|---|---|---|---|
| Revenues | $388.9 million | $747.0 million | $713.6 million |
| Net Income | $18.8 million | $27.8 million | $35.7 million |
| Diluted EPS | $0.86 | $1.27 | $1.54 |
| Operating Income | $18.4 million | $29.1 million | $36.2 million |
| Operating Margin | 4.7% | 3.9% | 5.1% |
| Net Cash from Operations | N/A | $74.0 million | $66.9 million |
| Cash and Equivalents | $14.4 million (Balance Sheet) | $14.4 million (Balance Sheet) | $23.8 million (Dec 30, 2025) |
| Long-Term Debt | $44.0 million | $44.0 million | $85.0 million (Dec 30, 2025) |
| Working Capital | ($132.4 million) | ($132.4 million) | ($112.9 million) |
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 6.4% ($23.3M) for the quarter and 4.7% ($33.4M) for the year-to-date period. This was driven by a 6.5% increase in comparable restaurant sales, primarily due to an 8.3% increase in guest traffic, partially offset by a 1.8% decrease in average check.
- Profitability Decline: Net income decreased 15.4% for the quarter and 22.1% year-to-date. Operating margins compressed from 5.8% to 4.7% (quarter) and 5.1% to 3.9% (YTD).
- Cost Pressures: Cost of sales increased as a percentage of revenue (25.5% vs. 24.8% prior year) due to approximately 5% inflation in commodity costs, led by beef. General and administrative expenses rose significantly (21.1% quarterly increase) due to $1.4M in legal/leadership transition costs and higher stock-based compensation.
- Asset Impairment: Loss on disposal and impairment of assets increased to $1.0M for the quarter and $2.8M YTD, compared to $0.2M and $0.4M in the prior year, related to asset disposals and closed locations.
- Debt Reduction: Long-term debt decreased from $85.0M to $44.0M, reducing interest expense. The company has $155.4M available under its $215M credit facility.
Outlook, Risks, and Management Commentary
- Capital Allocation: The company continues to prioritize shareholder returns through a share repurchase program. Approximately $7.7M was spent on repurchases YTD, with $85.5M remaining under the $675M authorized program.
- Investment in Infrastructure: Capital expenditures increased to $39.1M YTD, primarily driven by restaurant maintenance and remodels ($34.0M) rather than new openings ($4.0M).
- Tax Rate: The effective tax rate was 1.0% YTD, significantly lower than the statutory rate, primarily due to FICA tax tip credits.
- Risks: Key risks include commodity price volatility (specifically beef), labor cost inflation, and potential disruptions in supply chains. The company does not use financial instruments to hedge commodity prices.
- Liquidity: Management believes current cash, operating cash flows, and credit facility availability are sufficient to meet needs for the next 12 months.
Investor Verification Checklist
- Commodity Inflation Impact: Verify the sustainability of the 5% commodity cost inflation and the company's ability to pass these costs to consumers via menu pricing without further eroding average check.
- One-Time Expenses: Assess the impact of the $1.4M in legal and leadership transition expenses on future G&A trends.
- Asset Quality: Review the details of the $2.8M impairment loss to understand if it signals broader issues with the restaurant portfolio or specific underperforming locations.
- Debt Covenant Compliance: Confirm continued compliance with credit facility covenants, particularly given the negative working capital position typical of the industry.
- Traffic vs. Check Mix: Monitor the trend of rising guest traffic versus declining average check to ensure volume growth does not permanently dilute profitability.