Q2 2026 BJ's Restaurants Inc Earnings Call Transcript
Key Points
- BJ's Restaurants Inc (BJRI) delivered its eighth consecutive quarter of sales and traffic growth, with same-store sales up 6.5% and traffic up 8.3%, significantly outperforming Black Box casual dining benchmarks.
- Restaurant-level operating margins expanded by 20 basis points to 17.2% despite a 120-basis-point headwind from food inflation, demonstrating strong operational leverage and cost control.
- The company's marketing strategy proved highly effective, with a 67% increase in impressions in Q2 and 146% in the first half, while maintaining flat marketing spend as a percentage of sales year-over-year.
- Menu innovation, particularly the Biscoff seasonal Pizookie, was a major success, doubling Pizookie incidents year-over-year and driving strong guest traffic and sales across all geographies, day parts, and channels.
- BJ's Restaurants Inc (BJRI) raised its full-year guidance for comparable restaurant sales growth to 3%-4% (from 1%-3%) and adjusted EBITDA to $145-$152 million (from $140-$150 million), reflecting confidence in continued momentum.
- The company strengthened its balance sheet, reducing net debt to approximately $30 million from $61 million at the start of the year, positioning it for high-return investments in remodels, new restaurants, and share repurchases.
- Average check compression of 1.8% in Q2, driven by the popularity of value-oriented promotions like the Pizookie Meal Deal and seasonal Pizookies, which attract lower-check guests and weigh on mix.
- Cost of sales increased by 70 basis points to 25.5% due to approximately 5% commodity inflation, led by a 20% increase in beef costs, which pressured margins despite operational improvements.
- General and administrative costs rose 90 basis points to 6.8% year-over-year, including $1.4 million in incremental legal reserve and leadership transition costs, as well as $1.5 million in deferred compensation expenses.
- The company faces ongoing uncertainty from seasonal product performance, as the success of items like the Biscoff Pizookie can create volatility in average check and mix, making financial forecasting more challenging.
- Repair and maintenance expenses increased by approximately $1 million (14% year-over-year) as part of a multi-quarter investment to bring facilities to a 'gold standard,' which will continue to pressure near-term profitability.
- While Q3 is off to a good start, management expects Q3 comparable sales to somewhat outpace Q4 due to the shape of prior-year comparisons, indicating potential deceleration in the back half of the year.
Good afternoon, and welcome to the BJ's Restaurant's second-quarter 2026 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Rana Shermer, Director of SEC Reporting. Please go ahead.
'-
Thank you, Operator. Good afternoon, everyone, and welcome to our fiscal year 2026 second quarter investor conference call and webcast. After the market closed today, we released our financial results for our fiscal 2026 second quarter. You can view the full text of our earnings release on our website at www.bjsrestaurants.com.
I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance
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