Although off-premise sales continue to grow at a 20% clip for BJ’s Restaurants, the delivery portion of the increase has decelerated this month, prompting the casual chain to experiment with new come-ons for at-home customers, management explained to investors yesterday.
Simultaneously, the chain is completing a sweeping overhaul of its back-of-house operations. “We've evaluated every aspect of our kitchen value chain, from how and what food and supplies we order, to order quantities, to how we physically receive and store, to who and when we perform prep for our kitchen lines,” CEO Greg Trojan told financial analysts during a discussion of BJ’s second quarter financial results. The result will be higher-quality food served more quickly in an environment that’s less taxing for employees, he asserted.
“It's only been a few weeks post-execution for some restaurants, but we're already seeing that our initiatives are working and that our kitchens are operating more effectively,” Trojan said.
He noted that the chain added a new premium item to its menu during the quarter, a tri-tip sirloin that’s slow roasted in the special ovens BJ’s uses for its prime rib and pork chops. The price of the entree drops on Thursday nights to $13.95, a part of the brand’s Brewhouse Specials, according to Trojan.
BJ’s same-store sales for the quarter rose 2%, with check averages rising 3% and traffic slipping by a point.
Transaction size was helped in part by BJ’s efforts to land more catering sales, Trojan said.
However, “we have seen a deceleration of our delivery growth rate in July,” he said. “We have been experimenting with some different offers to drive trial, particularly with our third-party partners.” He cited the example of offering a free Pizookie, BJ’s signature baked-cookie dessert, to patrons who place at least a $19.95 order through DoorDash. To date, Trojan continued, that promotion has not been as successful as the offer of free delivery for customers.
“One of the things that we're encouraged to see is that our takeout business lately has been growing,” said Greg Levin, BJ’s president and CFO. “Obviously, we like takeout a little bit more because you don't pay those commissions to the delivery companies.”
BJ’s overall sales have softened in July because of weaker-than-expected results from some restaurants in Northern California, Levin said. He attributed the slowdown there in part to forest fires in the area.
BJ’s posted a net income for the second quarter of $14.2 million, a 16% decline from the year-ago quarter. Management attributed the slide in part to a change in accounting methods.
Revenues totaled $301.1 million, an increase of 4.7%.
The company operates 205 restaurants.
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