BJ's Restaurants, Inc. (BJRI) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the thirteen-week period ended March 31, 2026. BJ's Restaurants, Inc. operates a single segment of full-service, company-owned restaurants across 31 states in the U.S. As of May 5, 2026, the company owned and operated 219 locations. The company is a large accelerated filer with 21,016,924 shares of common stock outstanding as of May 1, 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenues | $358.1 million | $348.0 million |
| Net Income | $9.0 million | $13.5 million |
| Diluted EPS | $0.41 | $0.58 |
| Operating Cash Flow | $43.0 million | $4.6 million |
| Long-Term Debt | $62.0 million | $85.0 million |
| Cash and Equivalents | $22.7 million | $19.0 million |
| Operating Margin | 3.0% | 4.3% |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 2.9% ($10.1 million), driven by a 2.4% increase in comparable restaurant sales (due to 2.2% higher guest traffic and 0.2% higher average check) and $1.7 million from new restaurants.
- Profitability Decline: Net income decreased 33.1% to $9.0 million. Operating income fell 28.9% to $10.6 million, primarily due to a $4.5 million increase in depreciation and amortization (including a $2.7 million catch-up adjustment) and a $1.7 million loss on disposal and impairment of assets.
- Cost Pressures: Cost of sales rose to 25.1% of revenue (from 25.0%) due to higher commodity costs. Labor and benefits increased to 36.3% of revenue (from 36.1%) driven by higher stock-based compensation and workers' compensation costs.
- Debt Reduction: Long-term debt decreased by $23.0 million as the company repaid borrowings on its credit facility. Outstanding borrowings were $62.0 million with $137.4 million remaining available.
- Cash Flow Improvement: Operating cash flow surged to $43.0 million from $4.6 million year-over-year, largely attributed to the timing of accounts payable payments (specifically, a lack of prepayments for ERP system implementation that occurred in the prior year).
Outlook, Risks, and Management Commentary
- Capital Allocation: The company continues to prioritize shareholder returns, repurchasing approximately 0.2 million shares for $5.3 million during the quarter. $87.9 million remains available under the $675 million authorized repurchase program.
- Capital Expenditures: Total CapEx was $15.8 million, with $14.3 million allocated to maintenance, remodels, and productivity initiatives. The company expects to fund future CapEx through cash on hand, operating cash flow, and its credit facility.
- Risks: Key risks include exposure to floating interest rates on the $215 million credit facility, volatility in food and commodity prices, and potential supply chain disruptions. The company does not use financial instruments to hedge commodity prices.
- Legal: The company is subject to ordinary course litigation regarding operational, employment, and real estate issues. Management believes these will not have a material adverse effect on financial position.
Investor Verification Checklist
- Depreciation Adjustment: Verify the nature and one-time status of the $2.7 million depreciation catch-up adjustment impacting operating income.
- Asset Impairment: Review details regarding the $1.7 million loss on disposal and impairment of assets to assess if this indicates broader asset quality issues.
- Commodity Inflation: Monitor the trajectory of cost of sales as a percentage of revenue, given the noted increase in commodity costs.
- Share Count Reduction: Confirm the impact of ongoing share repurchases on future earnings per share (EPS) dilution/accretion.
- Working Capital Timing: Assess whether the significant increase in operating cash flow is sustainable or primarily a result of the timing of accounts payable payments.