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What's happening?
Shares of BJ's Restaurants (BJRI 1.69%) have leapt 24% higher today after the casual-dining chain reported strong third-quarter earnings after Thursday's closing bell.
Why it's happening
BJ's reported quarterly revenue of $206.5 million, up 9.7% year over year, but slightly below Wall Street's expectations for $208.3 million in revenue. However, the company's earnings of $0.23 per share trounced Wall Street, which had only modeled a profit of $0.13 per share for the quarter.
CEO Greg Trojan highlighted "cost containment" efforts as key to this outperformance, as restaurant-level margins rose 130 basis points year over year to reach 17.6%. He also noted that comparable-store sales grew by 0.3%, which was driven by 0.7% greater guest counts as the company increasingly emphasizes the affordability of its offerings. BJ's also opened three new restaurants in the quarter and plans to open another 15 restaurants in 2015, which is key to its strategy to improve operating leverage and thus improve restaurant-level margins to 18%, and eventually to 19% as part of the company's three-year plan ending in 2016.
