BJ's Restaurants Reports Significant Q1 Profit Decline Despite Modest Revenue Growth
BJRI sits 29% above its 52-week low of $28.46.
Summary
BJ's Restaurants reported a 33% drop in Q1 2026 net income and a 29.3% decline in diluted EPS year-over-year, despite a 2.9% revenue increase, driven by rising operating costs and higher depreciation.
Key Events · Earnings and Guidance · BJRI
-
Significant Profitability Decline
Net income decreased by 33.0% to $9.034 million, and diluted EPS fell by 29.3% to $0.41 for the thirteen weeks ended March 31, 2026, compared to the prior year.
-
Modest Revenue Growth
Total revenues increased by 2.9% to $358.1 million, driven by a 2.4% increase in comparable restaurant sales, primarily from higher guest traffic.
-
Increased Operating Costs
Cost of sales, labor and benefits, and depreciation and amortization all increased as a percentage of revenues, with depreciation seeing a 24.8% rise, including a $2.7 million catch-up adjustment.
-
Deteriorating Liquidity Metrics
Net working capital deteriorated to $(133.088) million from $(112.850) million, and the current ratio decreased to 0.3:1.0 from 0.4:1.0.
Analysis · BJRI · Trade & Services
BJ's Restaurants' first-quarter 2026 results reveal a substantial decline in profitability, with net income dropping by 33% and diluted EPS by 29.3% year-over-year, despite a modest 2.9% increase in total revenues. This contrasts with the 'robust' characterization in the prior day's 8-K, as the detailed financials show a significant deterioration in operating income. Key factors contributing to the profit decline include higher commodity costs, increased labor and benefits expenses (partly due to stock-based compensation), and a notable 24.8% rise in depreciation and amortization, which included a $2.7 million catch-up adjustment. The company also reported an increased loss on disposal and impairment of assets. Furthermore, liquidity metrics such as net working capital and the current ratio deteriorated. While the company continued its share repurchase program, buying back $5.3 million in stock, the overall financial performance indicates significant operational pressures impacting the bottom line.
At the time of this filing, BJRI was trading at $36.74 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $804.6M. The 52-week trading range was $28.46 to $47.02. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.