What happened
Shares of BJ's Restaurants (BJRI 0.35%) were surging today after the casual-dining restaurant chain posted strong results in its first-quarter earnings report.
BJ's closed the session up 12.6%.
So what
It's been a strong quarter for restaurant stocks as the sector laps the peak of the omicron variant of COVID-19 a year ago, and BJ's was no exception.
The casual-dining chain reported comparable sales growth of 9%, driving overall revenue up 14.2% to $341.3 million, which beat estimates at $331.8 million.
Profitability also surged thanks to the increase in comparable sales, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly doubling to $25 million, and restaurant-level operating margins rose by 280 basis points to 12.6%.
On the bottom line, earnings per share jumped from $0.06 to $0.15, easily beating estimates at $0.05. A tax benefit helped lift earnings per share.
CEO Greg Levin said, "Our strong performance in the first quarter demonstrates that we are making tangible progress on our sales and productivity initiatives and that our commitment to gold-standard service and gracious hospitality is resonating with guests."
Now what
BJ's didn't provide guidance in the earnings release, but the company said that it plans to open five new restaurants and remodel more than 30 on top of the nine restaurants it remodeled last year, saying that the remodels have delivered good financial returns.
Over the long run, it still sees room in the market to double its store base to at least 425 restaurants.
The stock has underwhelmed over the last five years, but with the pandemic finally behind us, BJ's could get back to steady growth.
