Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: Shares of BJ's Restaurants (BJRI +1.02%) were up roughly 17% as of 1:20 p.m. Thursday after the restaurant chain announced better-than-expected fourth-quarter earnings.
Quarterly revenue climbed 7.1% year over year to $213.9 million, helped by a modest 1.2% gain in comparable-restaurant sales, the repurchase of 2.8 million shares of stock for $100 million since last April, and the addition of 11 new restaurants in 2014. Three of those restaurants were opened in Q4. That translated to net income of $8.3 million -- compared to just $0.5 million in the same year-ago period -- or $0.31 per share. Analysts, on average, were expecting significantly lower earnings of $0.21 per share on slightly higher sales of $214.5 million.
Why it's happening: Keeping in mind that this is BJ's second straight quarter with positive comps, CEO Greg Trojan added, "BJ's strong fourth quarter financial results reflect our team's progress in reigniting comparable restaurant sales, refining our operating disciplines and menu offerings, launching a new higher return restaurant prototype, and continuing to execute on our long-term restaurant expansion plan."
During the subsequent conference call, CFO Greg Levin elaborated that comps are trending in the mid-single-digit range, with much of the growth driven by an increased guest count. BJ's also plans to accelerate new restaurant openings in 2015 with a total of "at least" 15 new locations, and continues to see a long-term opportunity to grow its current base of 158 restaurants to at least 425 locations nationwide.
All things considered, given BJ's solid performance in Q4, the great start to 2015, and knowing that its long-term story remains intact, it's unsurprising to see the market driving up BJ's Restaurants stock today.
