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Why BJ's Restaurants Stock Is Down 10% Today

By Howard Smith – Updated Oct 23, 2020 at 2:31PM

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The decline came despite growing sales trends throughout the quarter.

What happened

Shares in BJ's Restaurants (BJRI 1.70%) are down 10% today, after reporting third-quarter earnings that continue to reflect struggles in the sector brought by impacts of the pandemic.

So what

The restaurant and brewhouse chain reported a 30% decline in comparable-restaurant sales, and a 29% drop in total revenue versus the year-ago period. Excluding gains unrelated to the operations, the company lost $0.44 per share in the quarter ended Sept. 29, versus a $0.18 gain in the prior-year period. 

empty restaurant table with brick wall in background

Image source: Getty Images.

The results are an improvement over the second quarter, which ended June 30, when dining rooms were closed and the company transitioned to take-out and delivery only, for part of that reporting period. Comps were down almost 60% for that previous quarter. 

Now what

Though the company reported improvement in the third quarter, it wasn't enough for investors after the shares had gained more than 80% in the past three months. 

CEO Greg Trojan said that third-quarter results were above expectations, however. The company went from about 70% of its dining rooms open at the start of the third quarter, to having 87% currently open, though with limited seating. The company built approximately 100 temporary outdoor patios in response, and weekly sales per restaurant improved by more than 20% through the final weeks of September. 

The chain continues to expand as it opened two new restaurants in 2020, and said it plans to announce a moderate increase in new restaurant openings for 2021. It currently has 210 restaurants and has long-term plans to more than double that number. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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