BJ's Restaurants Inc. (BJRI, Financial), the operator of casual dining restaurants, declined 22.7% in the quarter as the company reported weak sales. Trends for most all mid-tier restaurant chains were very soft this summer, as consumers seemed to be spending on cars and home furnishings, not eating out. BJ's was unable to buck the trend it has in the past. We remain optimistic that the company can grow its chain four-fold in units, and increase margins so it should be able to compound earnings at a fast pace going forward. However, in this weak comp environment, earnings growth is constrained and the stock's multiple has contracted.
From Ron Baron’s Baron Funds third quarter 2013 report.
From Ron Baron’s Baron Funds third quarter 2013 report.
