(BJRI) BJ’s Restaurants 2011 Unit Growth on Track

BJ’s Restaurants, Inc (BJRI), which operates around 105 restaurants, remains on track to open as many as 12 to 13 new restaurants in fiscal 2011, of which three restaurants have already been opened.

The company opened the first restaurant of 2011 in Tyler, Texas. The 8,000-square feet restaurant can accommodate upto 265 guests. The second restaurant has been opened at Arden Fair Mall in Sacramento, California. The restaurant is approximately 8,500 square feet and seats around 260 guests.

The third restaurant has been opened recently in Austin, Texas. The outlet has a space of 8,500 square feet and can accommodate 280 guests at a time. The new restaurant is the second restaurant of the company in Austin and the twenty second in Texas.

The Orange County, California-based company’s newly-opened restaurant is located at the Shops at Arbor Walk and is expected to benefit immensely from its strategic positioning.

Apart from its signature deep-dish pizzas, its own hand-crafted beers and famous Pizookie dessert, the menu possesses great variety. The guests also have the option of watching television programs while trying out the various lip-smacking delicacies in this restaurant.

BJ’s next two restaurants are set to open in Century City, California and Las Vegas, Nevada before the end of June 2011.

BJ’s is one of the few casual dining chains that remains committed to its unit growth plan in 2011 and beyond and believes that there is room for at least 300 outlets in the long run. Looking forward to 2012 and 2013, the company plans low double-digit capacity increase per year in the approximate range of 12% to 13%. One third of these openings will be in BJ restaurant’s market home court of California, while another third will come up in the Western states, excluding California and the other third in the Florida market or in a few new markets. Additionally, 50% of the new stores will be conversions of old retail locations.

We believe the company should continue to open new restaurants in order to enhance its market share as industry peers such as California Pizza KitchenInc. (CPKI), Red Robin Gourmet Burgers Inc. (RRGB) and Buffalo Wild Wings Inc. (BWLD) are also on a modest expansion mode.

BJ’s is well positioned to sustain its growth momentum while generating improved earnings spurred by operating efficiencies and innovative offerings. These also help the company to drive traffic and post robust same-store sales growth. The company also boasts of a debt-free balance sheet and plans to enhance pricing to mitigate input cost pressure. Additionally, the core Californian market, which had been badly hit during the housing downturn, has also begun to turnaround. The gradual development of this market, which is one of the major operational locations for the company, is an important tailwind for BJ.

We maintain a Zacks #1 Rank on BJ’s, which translates into a short-term Strong Buy rating. Our long-term recommendation also remains Outperform.

BJ’S RESTAURANT (BJRI): Free Stock Analysis Report

BUFFALO WLD WNG (BWLD): Free Stock Analysis Report

CALIF PIZZA KIT (CPKI): Free Stock Analysis Report

RED ROBIN GOURM (RRGB): Free Stock Analysis Report

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