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    BJRI
    Earnings call· Jun 2026(Q2 FY26)

    BJs RESTAURANTS Q2 FY26 earnings call BJRI

    Jul 30, 2026 Source

    Executive summary

    BJ's Restaurants Q2 FY26 — Strong Traffic-Driven Growth and Margin Expansion

    BJ's Restaurants delivered another strong quarter, marked by significant traffic-driven comparable sales growth and expanded restaurant-level operating margins despite commodity inflation and check compression. The company is focused on strategic investments in people, product innovation, and restaurant atmosphere, while strengthening its balance sheet and building a pipeline for future unit growth. Management expressed confidence in continued outperformance against casual dining benchmarks.

    Highlights

    5

    • Same-store sales increased 6.5%, driven by 8.3% traffic growth, significantly outperforming casual dining benchmarks.

    • Restaurant-level operating margins expanded 20 basis points to 17.2%, despite 120 basis points commodity headwind.

    • Adjusted EBITDA increased $2.3 million to $44.4 million, representing an 11.4% margin.

    • Marketing efficiency improved by 20 basis points as a percentage of sales in the first half, delivering a 146% increase in impressions.

    • Net debt was substantially reduced to approximately $30 million at quarter-end, down from $61 million at the start of the year.

    Concerns

    3

    • Food inflation of approximately 5% impacted cost of sales by 120 basis points, led by a 20% increase in beef costs.

    • Average check experienced 1.8% compression, primarily due to the success of seasonal Pizookies and promotional offerings.

    • General and administrative costs increased 90 basis points, including $1.4 million for legal reserve and leadership transition, and a $1.5 million deferred compensation liability.

    Guidance & targets

    12
    CategoryTargetConfidence
    Comparable restaurant sales growth
    3% to 4%
    high materiality
    High
    Restaurant-level operating profit
    $228M to $235M
    high materiality
    High
    Adjusted EBITDA
    $145M to $152M
    high materiality
    High
    Capital expenditures
    $85M to $95M
    medium materiality
    High
    Share repurchase
    up to $50M
    medium materiality
    High
    Comparable restaurant sales growth
    somewhat outpace Q4
    medium materiality
    Medium
    Total effective pricing
    3.7%
    low materiality
    High
    Total effective pricing
    2.6%
    low materiality
    High
    Total effective pricing
    3%
    low materiality
    High
    Average check pressure
    ease
    low materiality
    Medium
    Average check growth
    moderate positive growth
    low materiality
    Medium
    Normalized G&A run rate
    up to $90M
    low materiality
    Medium

    Operational metrics

    28
    Restaurant-level operating profit
    $66.8M
    Q2 FY26
    Restaurant-level operating profit margin
    17.2%up 20 bps YoY
    Q2 FY26

    Expanded despite 120 basis points commodity headwind.

    Cost of sales
    25.5%up 70 bps YoY
    Q2 FY26

    Primarily reflected a 120 basis points margin headwind due to approximately 5% commodity inflation.

    Commodity inflation
    5%
    Q2 FY26

    Led by an expected 20% increase in beef costs. Produce increases further pressured costs due to severe weather and higher transportation costs.

    Total labor expense
    34.5%improved 90 bps YoY
    Q2 FY26

    As sales leverage and disciplined execution more than offset a 10 basis point increase in workers' compensation costs.

    Workers' compensation costs
    10 bpsincrease YoY
    Q2 FY26
    Occupancy and operating expenses
    22.8%unchanged YoY
    Q2 FY26
    Marketing expense
    $1.2Mincrease YoY
    Q2 FY26

    Strategically shifted from Q1 to Q2 to support high volume Celebration Season.

    Marketing expense as % of sales
    declined 10 bpsYoY
    YTD FY26

    Reflecting improved efficiency and return, driving significant traffic growth.

    Repair and maintenance P&L investment
    $1Mincrease YoY
    Q2 FY26

    Increased as part of the journey to gold standard physical plant and equipment.

    General and administrative costs
    6.8%up 90 bps YoY
    Q2 FY26
    G&A incremental costs (legal reserve, leadership transition)
    $1.4M
    Q2 FY26

    Excluded from adjusted EBITDA.

    Deferred compensation program liability
    $1.5M
    Q2 FY26

    Recorded in G&A, offset in other income by increases in underlying investments.

    Normalized G&A
    $23Munchanged YoY
    Q2 FY26

    Excluding incremental costs and deferred compensation liability.

    Adjusted EBITDA
    $44.4Mup $2.3M YoY
    Q2 FY26

    Compared to $42.1 million last year.

    Capital expenditures
    $23.3M
    Q2 FY26

    Primarily for maintaining restaurants, completing 5 remodels, and constructing 2 new restaurants targeted to open in Q4.

    Shares repurchased
    64,000
    Q2 FY26

    Repurchased and retired approximately 64,000 common shares for $2.4 million.

    Debt repaid
    $18M
    Q2 FY26
    Net debt
    $30Mdown from $61M at start of FY26
    end of Q2 FY26

    A substantial reduction from the $61 million carried at the start of the year.

    Cost of debt
    5%
    Q2 FY26

    Remains low.

    Total revenue
    $388.9Mup 6.4% YoY
    Q2 FY26
    Traffic growth
    8.3%YoY
    Q2 FY26

    Driving comparable restaurant sales growth.

    Average check compression
    1.8%
    Q2 FY26

    Included in comparable restaurant sales growth.

    Marketing impressions
    67%increase YoY
    Q2 FY26
    Marketing impressions
    146%increase YoY
    H1 FY26
    Pizookie incidence
    doubledYoY
    Q2 FY26

    Driven by the Biscoff seasonal Pizookie.

    Restaurants breaking sales records
    over 80
    Q2 FY26

    Daily or weekly sales records.

    Menu price increase
    110 bps
    late June

    Included in a new menu launch.

    Industry KPIs

    2
    MetricValueDetails
    Comparable sales comps6.5%%
    Net unit growth development pipeline2units

    Product announcements

    3
    ProductTypeDetails
    Chicken sandwich and burger category refreshesupdate
    Pizookie lineupupdate
    Pizookie Meal Deal premium tierroadmap

    Risks & headwinds

    3
    Food inflationQ2 FY26, expected to subside in H2 FY26

    Approximately 5% in Q2 FY26, impacting cost of sales by 120 basis points, with beef costs up 20%.

    Mitigation: Improved product architecture and mix, operational initiatives like food waste management and reduced comp food and beverage incidence. Expectation for inflation rate to subside in H2.

    Average check compressionQ2 FY26, easing in Q3 FY26, moderate growth by Q4 FY26

    1.8% in Q2 FY26.

    Mitigation: Menu renovation, optimizing programming, and potential evolutions of the Pizookie Meal Deal to encourage trade-up. Expectation for check pressure to ease and return to moderate growth.

    Produce cost pressureQ2 FY26, some relief early Q3 FY26

    Increased costs in Q2 FY26.

    Mitigation: Anticipated relief early in Q3.

    What to watch in Q3 FY26

    5

    Comparable restaurant sales growth

    Q3 FY26
    Current6.5%
    Target3% to 4% (FY26 guidance)

    Why it matters

    Key indicator of continued traffic and sales momentum, especially relative to casual dining benchmarks.

    We are raising guidance for select financial metrics. Our updated guidance is as follows: comparable restaurant sales growth in the range of 3% to 4% compared with our previous range of 1% to 3%.

    Q&A highlights

    6

    Can cost of goods come down in the second half of the year, given the elevated levels in Q2 due to commodity inflation?

    Q2 was heavily impacted by commodity inflation, particularly beef and produce. While there might be some year-over-year relief in inflation, sequentially beef costs may still increase. Management expects a 'little bit of cost of sales improvement' in the balance of the year, but not a significant step down.

    “As we're looking at cost of sales for the balance of the year, we do think that Q2, to your point, obviously was impacted by a lot of commodity inflation. We get a little relief on a year-over-year basis in inflation. Keep in mind, though, sequentially, some of our beef costs in particular still increase. So we think cost of sales can improve a little bit. We're not looking for a big step down by any means, but we do think we can see a little bit of cost of sales improvement in the balance of the year.”

    asked by Alexander Slagle · answered by Todd Wilson

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence & Team Investment

    BJ's Restaurants continues to prioritize operational excellence and team member investment, which has translated into consistent guest metric improvements and reduced food and beverage costs. The company is investing in training, new team member and manager programs, POS simplification, tablet upgrades, and AI-supported activity-based labor models. These efforts have also led to team member and manager retention outpacing casual dining benchmarks, contributing to strong sales and profit performance.

    02

    Marketing & Culinary Strategy

    The company's marketing strategy involves optimizing spend timing, shifting dollars to high-volume periods like Q2's Celebration Season. This approach resulted in a 146% increase in impressions in the first half of the year and improved marketing efficiency. Culinary innovation, such as the Biscoff seasonal Pizookie, doubled Pizookie incidence year-over-year, while the Pizookie Meal Deal continues to drive new customer acquisition and repeat visits. Category refreshes for pizza, burgers, and chicken sandwiches are driving higher incidence, sales, and dollar margins.

    03

    Menu Innovation & Mix Management

    BJ's is taking a disciplined category management approach to its menu, focusing on leveraging recent chicken sandwich and burger refreshes through Q3 and advancing other key categories. The company's culinary calendar is driven by Pizookies, the Pizookie Meal Deal, and product news, with ongoing efforts to optimize for balance between traffic and mix. Tests are underway for potential evolutions of the Pizookie Meal Deal, including a premium tier, to explore trade-up pathways for guests.

    04

    Restaurant Atmosphere & Remodels

    BJ's is committed to maintaining a competitive advantage through its restaurant atmosphere. Over the past 18 months and for the next 18, the company is making incremental investments to catch up📎 on deferred facilities work and ensure its physical plants and equipment are 'gold standard.' This work, combined with the remodel program, is fundamental for future growth and is already contributing to traffic growth in remodeled restaurants.

    05

    New Unit Development & Leadership

    Two new restaurant openings are planned for later this year in Buckeye, Arizona, and Joliet, Illinois, which will showcase a refreshed expression of the BJ's brand. The company is actively building its pipeline with a 'right size, right place, right cost' approach for future unit growth. Recent key leadership hires include Monika Saxena as Brand President and Birju Amin as Chief Technology Officer, reflecting a commitment to unlocking the brand's full potential.

    06

    Balance Sheet Strengthening

    The company continues to generate significant free cash flow, which it is deploying across capital expenditures, share repurchases, and debt repayment. Net debt was reduced to approximately $30 million by the end of Q2, down from $61 million at the start of the year. This strengthening of the balance sheet positions BJ's to act with conviction on high-return investments and drive shareholder value.

    AI-generated summary of the company’s earnings call. Not investment advice.