BJ's Restaurants Q1 2026 Earnings Call - Traffic-Led Growth and Menu Innovation Drive Outperformance

Operator: Good afternoon. Welcome to the BJ’s Restaurants first quarter 2026 earnings release conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Rana Schirmer, Director of SEC Reporting. Please go ahead.

Rana Schirmer, Director of SEC Reporting, BJ’s Restaurants: Thank you, operator. Good afternoon, everyone, welcome to our fiscal year 2026 first quarter investor conference call and webcast. After the market closed today, we released our financial results for our fiscal 2026 first quarter. You can view the full text of our earnings release on our website at www.bjsrestaurants.com. I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These statements are based on management’s current business and market expectations, and our actual results could differ materially from those projections in the forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events, or otherwise, unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the company’s filings with the Securities and Exchange Commission. We will start today’s call with prepared remarks from Lyle Tick, our Chief Executive Officer and President, followed by Todd Wilson, our Chief Financial Officer. After which we will take your questions. With that, I will turn the call over to Lyle. Lyle?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Thank you, Rana. Good afternoon, everyone, and thank you for joining us to discuss our Q1 financial results, operating performance, and outlook. Q1 was another strong quarter for BJ’s. We delivered our seventh consecutive quarter of sales and traffic growth, along with our sixth consecutive quarter of profit dollar growth and EBITDA margin expansion. Same-store sales increased 2.4%, driven primarily by 2.2% traffic growth, continuing to outperform Black Box casual dining benchmarks by roughly 120 basis points on sales and close to 400 basis points on traffic. On the profit side, restaurant-level operating margins were 16%, and adjusted EBITDA margins reached 10.5%, up 30 basis points year-over-year. Our consistent performance continues to reflect the progress we’re making across our four strategic priorities.

Focused on building a winning culture, improving our food, enhancing our atmosphere, and driving wow hospitality and executional consistency. A few notable Q1 highlights and context. Valentine’s Day performance was exceptional. Approximately half our restaurants set new daily sales records, while 14 set weekly records, reinforcing our strength in the social splurge occasion. We delivered Q1 results with roughly 20% lower media spend year-over-year as we continue to optimize how we deploy marketing dollars while ensuring we have sufficient resources to drive Q2, or what we call celebration season. This is a testament to the progress our marketing and culinary teams have made on refining our go-to-market strategy and how best to leverage our product news and media. The quarter had its fair share of volatility, including approximately 70 basis points of weather-related headwinds year-on-year.

Importantly, the teams managed this volatility effectively while growing sales and protecting margins. We also are encouraged by the results of some of our tests and recent programming we put into the market. Overall, total beverage sales stabilized in Q1 behind growth in non-alcoholic beverages. Our 22-ounce beer upgrade and a successful seasonal beer offering in our Waterfall beer, which was a collaboration with Sapporo Breweries, hitting on growing segment trends like lower ABV, sessionable drinks, and Japanese-style rice beer, which is one of the few growing segments in craft beer. Our chicken sandwich renovations have shown clear positive impact in tests, improving the chicken sandwich and overall handheld performance, and will be rolling out as we move into Q3. Our premium Wagyu Burger with a custom blend patty has garnered a lot of interest in trial and provides a top-of-the-barbell anchor in the burger category.

This has just moved into a full system limited time feature and will become part of our menu burger lineup as we move into Q3 as well. Overall, I’m pleased with our Q1 results and encouraged by the positive momentum in the business as we head into Q2 and our growing outperformance versus Black Box casual dining benchmarks. 18 plus months into my journey at BJ’s, we have a clear roadmap that made material progress in building stronger foundations, and we intend to continue to focus on bringing guests a better BJ’s by investing in our food, our people, and our atmosphere, ensuring these elements continue to work in concert to drive performance. While there’s still a significant amount of work and opportunity ahead, we have made tangible progress across several areas.

We have seen significant improvement across our guest metrics since Q3 of 2024, with our Net Promoter Score improving roughly 10%. Our team member retention continues to be better than pre-pandemic levels and trending positively. Both hourly and management turnover are improving on a trailing 12-month average and tracking 12-plus percentage points below Black Box industry benchmarks as we continue to strive to make BJ’s a better, easier, and more rewarding place for our team members. The work we’re doing to upgrade our menu offerings, while still in its early stages, is reflected in improvement in our food scores, our momentum with younger guests, and our new product performance. Since the launch of the All-American Smash Burger in June of 2025, the burger category is delivering roughly 30% more sales than prior to the launch.

Pizza has also performed well since its introduction, with category sales up about 20%, and we’re beginning to see encouraging signs that the new pizza is improving repeat visits amongst guests who try it. Seasonal Pizookies continue to resonate, particularly with younger guests, contributing to both traffic and growth in dessert sales. Our value scores have materially improved behind the Pizookie Meal Deal and an improved overall experience, reinforcing our complete value proposition. Our marketing strategy continues to evolve with greater emphasis on social and word-of-mouth to support our new products, complemented by selective use of broader media to deliver value messaging. At the same time, we’ve materially improved margins over the last 18 months while making significant investments in our restaurants and guest experience through our remodels and facilities programs.

We are, however, still in the early innings, and the vast majority of our opportunity still lies ahead of us. The last 6 quarters of sales and traffic growth have been driven predominantly by traffic. We have brought a younger, hard-to-reach guest into our restaurants, lifted frequency, and meaningfully reset BJ’s relevance in casual dining. As we look ahead, we will continue to build on the drivers of success to date while moving to further balance the model where traffic as well as average check and mix carry weight over time. The Wagyu Burger I mentioned earlier is an example of the category management work we’re doing on the menu. Sitting alongside the All-American Smash Burger that remains a hero at the opening price point of the category, the Wagyu Burger gives guests a premium trade-up option, building a clear good, better, best strategy within a high-affinity category.

In addition, we’re moving into a test with a premium tier on the Pizookie Meal Deal, giving our most engaged guests a path to trade up while still reinforcing two core and ownable BJ’s equities in variety and the Pizookie. We continue to work across the menu, extending this structured approach to category renovation. I’ll share more information in the coming quarters as we gain more learnings from our market tests. The progress to date, combined with the work ahead, will help us maintain momentum while continuing to allow us to improve flow-through over time.

I’m confident in our plans and our commitment to investing in our people, ensuring they have the tools and support needed to bring our brands to life every day, advancing operational excellence, making BJ’s better and easier for both team members and guests, continuing to improve our food offerings and guest experience, and setting the foundation for future net unit growth. On net unit development, our prototype work is progressing at pace. The two planned openings later this year are in Buckeye, Arizona and Joliet, Illinois, and they will showcase a meaningfully improved guest experience. These markets represent a mix of an established performance market in Buckeye, Arizona, and a development opportunity in Joliet, Illinois, where we expect proximate restaurants to benefit from increased brand awareness and operational leverage.

As we build the pipeline, we will stay focused on refining the prototype to continue to improve the consistency and financial returns of future openings. Q1 delivered another strong quarter for BJ’s and reflects our continued progress, sustained traffic-driven growth, and share gain. While the environment remains dynamic, we enter Q2 with positive momentum, strong plans, and growing outperformance versus Black Box casual dining benchmarks, and a focus on continuing to build on the foundations we’ve laid across our strategic priorities. Before I close, I would like to thank all our BJ’s team members from our restaurants through to the support center for their passion and commitment in bringing our promise to life every day for our guests.

Q1 was not without its volatility, navigating multiple severe weather episodes, and our teams took care of each other, our guests, our restaurants, and adjusted real time to deliver another strong result for BJ’s. Thank you. I will now turn it over to Todd for more color on our financial results and our outlook.

Allison Arps, Analyst, Piper Sandler1: Thank you, Lyle. Good afternoon, everyone. We delivered a strong first quarter with traffic-driven sales growth, generating an increase of $1.6 million in restaurant-level operating profit and a $2.4 million increase in adjusted EBITDA. As Lyle noted, we achieved these gains while navigating sales volatility, including 70 basis points of winter weather headwinds. Total revenue for the quarter was $358.1 million, a 2.9% increase versus last year. Comparable restaurant sales increased 2.4%, led by a 2.2% traffic growth and a 0.2% increase in average check. The traffic-led growth underscores the continued strength of our brand and our increasing guest frequency. Restaurant-level operating profit was $57.2 million, a $1.6 million increase versus last year.

Margins were stable at 16%, reflecting strong operational execution in a shifting environment. Cost of sales was 25.1%, a sequential improvement from 25.5% in the fourth quarter. While this is a 10 basis point increase versus last year, led by anticipated beef inflation, we mitigated much of the impact with operational improvements, including reduced food waste and continued progress in our gross to net initiative focused on simplifying the efforts of our team members and more consistent execution for guests. Our menu evolution has also brought upgraded and new items to our guests, like pizza and seasonal Pizookies, that are delivering increasing incidents, great guest satisfaction, and carry a favorable cost structure. Total labor expense was 36.3% of sales, a 20 basis point increase versus last year.

Core labor expense, including hourly wages, management, and benefits, was unchanged from last year. Our operations were efficient while also delivering meaningful gains in guest satisfaction. The reported increase was driven entirely by higher workers’ compensation costs resulting from rising medical expenses despite our team’s good work of reducing the number of claims. We expect this pressure to begin to normalize in the back half of the year. Occupancy and operating expense was 22.7% of sales, a 30 basis point reduction versus last year. This reflects a strategic decision to shift marketing dollars into the second quarter to support our high-volume celebration season. It also reflects the good work our marketing team has done to optimize channel mix and drive better return on our investments with increased focus on social and digital channels.

General and administrative costs are $22 million and 6.1% of sales, a 20 basis point reduction versus last year. Depreciation expense increased 110 basis points compared to last year, largely due to a one-time catch-up entry. Excluding this, the underlying increase was 30 basis points, reflecting our ongoing remodel program and new unit investment. These component parts delivered an adjusted EBITDA increase to $37.7 million as compared to $35.4 million last year. This represents a 30 basis point increase to 10.5% of sales. The strong business performance resulted in significant free cash flow that we deployed for three primary purposes. First, we invested $15.8 million in capital expenditures, primarily maintaining our restaurants and completing 5 remodels. Second, we repurchased and retired approximately 151,000 common shares for $5.3 million.

Third, we repaid $23 million of debt. We ended the first quarter with net funded debt of $39.3 million, a significant reduction as compared to $61.2 million at the end of 2025. With my first 100 days at BJ’s complete, I would like to share an update on my initial areas of focus and the opportunity I see in front of us. Initially, my priority was stabilizing building my immediate team and strengthening the foundational processes within our accounting and finance functions. We are fortunate to have many great team members in place, and I’m pleased to have bolstered the team in key areas, including the addition of Ashley Van as our accounting leader, who we announced a few weeks ago.

With that groundwork in place, my focus has shifted to partnering more closely with Lyle and the broader leadership team to accelerate our growth initiatives. This includes our efforts to continue driving top-line sales growth through great operations, marketing efforts, and remodels, driving further margin gains in the middle of the P&L, and enhancing our unit economics to accelerate new restaurant growth. While I was optimistic when I joined in December, I’m even more energized by what I see today. The BJ’s brand clearly resonates with a broad and growing cross-section of consumers. Our team is highly engaged, and we are continuing to build sales, traffic, and profitability. I am confident we have significant runway ahead. Turning to our 2026 financial outlook. We are reiterating all metrics in our 2026 full year financial guidance. I will provide additional color for modeling purposes.

Comparable restaurant sales and traffic trends to start the second quarter are off to a strong start and continue to beat the Black Box casual dining benchmark. We expect the second quarter to be the peak for commodity inflation this year, which will likely result in a Q2 cost of sales % marginally higher than Q1. In response, we are tracking towards a mid-year menu update engineered to further optimize product mix. Combined with our planned pricing actions, we expect to fully offset the inflation impact in the second half of the year. We expect occupancy and operating expenses to be approximately 23% of sales in Q2 as we reinvest the marketing favorability captured in Q1 to drive sales performance in our high-volume celebration season.

Lastly, construction is underway for our new restaurant in Joliet, and we are on track to break ground in Buckeye in the coming weeks. We expect to record nominal preopening expenses in Q2 and Q3, with approximately 80% concentrated in Q4 as these restaurants open. As a reminder, we target roughly $700,000 in preopening costs per opening.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Overall, our sales and traffic trends are strong, providing a solid foundation for the business. We are implementing targeted improvements across our menu, operations, and marketing tactics. As inflationary pressures ease, we expect these actions to further enhance performance, positioning us for accelerating profit growth in the second half of the year. In closing, the first quarter was a strong start to the year, defined by healthy traffic growth and resilient margins. This performance is a direct result of the hard work and dedication shown by our restaurant teams, field operators, and everyone at the support center. Thank you for your hard work and commitment. Looking ahead, we are confident that our strategic plan, combined with strong execution, will drive sustainable growth and create long-term value for our shareholders. With that, we’ll turn the call over to the operator for questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question today is from Brian Bittner with Oppenheimer & Co. Inc. Please go ahead.

Brian Bittner, Analyst, Oppenheimer & Co. Inc.: Thank you. Just want to ask about same-store sales. The seven consecutive quarters of traffic growth is very impressive, as is the outperformance against the benchmark. It kind of speaks for itself. I really want to ask about the average check side of the equation. It was flattish in the first quarter, which is definitely improvement from where you were in 4Q. I want to ask about the opportunity for average check to become a bigger contributor to comp growth as the year unfolds. You know, perhaps what type of average check is embedded in your 2026 outlook for same-store sales growth of 1%-3%.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Sure. Hey, Brian, this is Lyle. I’ll start and turn it over to Todd. Yeah, I mean, look, I’m really pleased with the consistent traffic growth and outperformance that we’ve been seeing and with the moderation of the check compression, which I think we signaled to be expected, you know, in Q4 of last year when we were talking about this year. I think it’s moving along, you know, very much the way that we expected it to, as we lap some of the performance from last year and then start to be able to layer in some of the other growth drivers. Right in Q4, I think we had a very strong seasonal Pizookie play.

Towards the end, started to be able to lay in pizza as kind of building on that mix. As you see us coming into this year, we continue to build on pizza. As I started to talk about in my comments, things like the Wagyu Burger, the chicken sandwich refresh, the PMD tiering, and other menu work we’re doing. We’ve kind of got a planful approach as we go forward that we think will continue to moderate and allow both of those levers to work for us as we go forward. In terms of the exact price or check built into the model?

Allison Arps, Analyst, Piper Sandler1: Yeah, Brian, I’ll jump in there. You know, relative to the guidance, what’s embedded in our model is check in a range of, call it, flat to +1. As Lyle alluded to, we think that progressively advances through the year, both as we lap different items and as some of these new initiatives come on board. We think Q1, you know, marginally positive check into Q1, we think that’s kind of one side of the bookend. We think it could be as high as a +1 on the year as some of these different initiatives take hold.

Brian Bittner, Analyst, Oppenheimer & Co. Inc.: Great. That’s helpful. My follow-up is just, you know, really zooming out here. Can you give us maybe a state of the union, updated state of the union on your plans for accelerating unit growth? You know, how are you thinking about the near-term building blocks that are in place to accelerate unit expansion? Just as it relates to the longer term opportunity, have you had a chance now that you’ve been, you know, there for a while, Lyle, to maybe create a roadmap on how you are thinking about what the proper growth algorithm for this company is over the next many, many years?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah, I’ll answer both those questions. First of all, I guess as we take a step back and we look at laying the foundations for unit growth as we go forward, right? I mean, I think, you know, our first stage of it was looking and making the geographical decision about where we wanna grow, which I think I’ve talked about in terms of, you know, growing out from where we already have a footprint versus going greenfield and the kind of concentric circle approach. The second part of that was getting to a new prototype design. Really the first part of that job is getting to a prototype that we feel like our guests and our team members are gonna love, and we feel great about what we’ve seen so far.

That’s kind of step two, and that’ll be reflected in the, in the next two openings. Then I think the second job after you’ve established that is, as you go forward, we wanna make it, you know, commercially exciting for all of us to accelerate growth, you know? While the new units that we have, you know, to date have been a good use of capital and that they’ve hurdled our weighted cost of capital, it’s been a responsible use. You know, we have much higher ambitions for that as we go forward and look to tune in the prototype both through actual kind of engineering of the prototype, but flexibility in the size of the box, as I’ve talked about, a mix of first and second generation space.

You know, when I talk about the box also, just challenging existing assumptions, right? We, there had been kind of an assumption that BJ’s was gonna have something from 35 to 40 taps, right? This is just one example. When you do the productivity analysis, you know, we probably need 20, and those are mostly driven by our BJ’s beers. When you start to kind of look through the opportunities and follow the numbers, there’s a lot of benefits that play off of something like that. Everything from cost to build, to ongoing maintaining of the infrastructure, to OPEX costs. Just kind of taking, you know, a holistic look at everything as we go forward.

You know, if I get my head up and look at the growth, you know, we’re looking to open a couple this year, I would say mid-single digits next year, moving towards double digits as we go into 2028 and beyond. I feel like we have significant headroom in filling out our existing markets prior to actually, you know, having to go greenfield. As we’ve done our analysis and we will, share more about the long-term growth algorithm as we go forward, I feel very confident in the headroom that we have, to grow BJ’s units.

Brian Bittner, Analyst, Oppenheimer & Co. Inc.: Great. Thank you.

Operator: The next question is from Jeffrey Bernstein with Barclays. Please go ahead.

Jeffrey Bernstein, Analyst, Barclays: Great. Thank you very much. My first question is just drilling down on the comp. I think you mentioned a growing outperformance versus the industry. I’m wondering if you could share maybe, you know, the sequential trend through the quarter and more specifics into April. I recall last quarter you saying you thought all four quarters would be within that 1%-3% range, just looking for some context there. Just lastly, whether or not gas price volatility. I know you mentioned weather was a big impact, but you didn’t mention gas. I’m just wondering whether you saw any kind of pressure or change in sequential trend as there was a spike in gas.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah, I mean, Thank you, Jeffrey, by the way. This is Lyle. I can only speak for our consumer, but our consumer has remained very resilient. When we look across Q1, we saw a very consistent performance across the periods in Q1 for our brand and our consumer. As we’ve entered Q2, based on Black Box benchmarks, we have seen some of the delta between our performance and the category performance, our performance accelerate versus the category. You know, at least to date, obviously, we’re keeping a very close eye on our consumer and their behavior. We really have seen a resilient consumer and resilient behavior, at least with respect to BJ’s.

Allison Arps, Analyst, Piper Sandler1: Hey, Jeffrey. Todd here. I’ll tip in on a few of those of, you know, just building on in kind of the order you asked. You know, relative to Black Box, Lyle may have said it in his prepared remarks, you know, in Q1, we beat the benchmark by 3.3%. Encouragingly, that was across every geography that we operate in. It was a consistent outperformance for our business, which is good to see. I think you asked about as well the quarterly same-store sales cadence. We talked last time about an annual expectation of 1%-3% growth. We obviously reiterated that in terms of our full year guidance, I’d say we still feel good with that. We’re able to deliver that growth, you know, consistently quarter after quarter.

I think that’s consistent with what we would’ve shared in our last update.

Jeffrey Bernstein, Analyst, Barclays: Understood. My, my follow-up is just taking a step back. Lyle, I think on a couple of occasions in your prepared remarks, you said you think the brand is still in the early innings. Seemingly you’ve had some strong momentum and a number of quarters of accelerating strength. Just wondering what exactly early innings means. What are you referring to in terms of where you see the greatest further opportunity, whether it’s a long-term target that you’re aspiring towards, or whether there’s a North Star or a player in the industry that you aspire to be like. Just wondering what exactly that means when you say early innings. What are you referring to?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Well, I mean, I mean, one, very broadly, I’m 18 months, roughly, or a little bit more than that into a journey of, I think what I’ve talked about, which is creating a more durable, consistent, and sustainable performance platform for BJ’s that we expect and want to deliver on, you know, into the future. I think, you know, secondarily to that, a lot of the work that we’ve done in the first 18 months, while we’ll continue to build off of, I would say is foundational. You know, we put a lot of work into foundationally improving what we called our table stakes operations, and we see that coming through in our scores and our retention. You know, that is kind of a foundation for us to then continue to improve operations.

We solidified our value platform with the Pizookie Meal Deal, kind of as I alluded to in our comments, as you then get that platform solidified, the question is, after that kind of step 1, where are you going with step 2 and 3? We talked about some of the tiering. Then really on the menu work, we’re really early doors there, right? The first real category renovation that we did was pizza, and I think we solidified our seasonal program for Pizookies. We have a lot more ahead of us in continuing to do the menu work and, you know, while I speak about all of those things individually, you know, the idea is that as those things come together over time, they ultimately create a stronger kind of flywheel for BJ’s working collectively together to deliver sustained performance.

When I look at where we’re at, I would still say we are in the early innings of the journey with more opportunity ahead. I do think we’ve identified our strategic priorities and they’ll guide us as we go forward, there’s more room in all of them. Obviously, we haven’t even touched on really starting to get development going again, right? That’s clearly in its early stages.

Jeffrey Bernstein, Analyst, Barclays: Great. Thank you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Thank you, Jeffrey.

Operator: The next question is from Alexander Slagle with Jefferies. Please go ahead.

Alexander Slagle, Analyst, Jefferies: Hey, thanks. wanted to follow up on the Pizookie Meal Deal, just sort of how you’re feeling about the progress there and the next steps you talked about to further refine the offering, maybe with more attachment and upgrade options and the tiering options that you’re testing.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah, sure. I mean, I feel really good about the Pizookie Meal Deal. It continues to resonate. It continues to bring in traffic and do its job, and importantly, bring new people into a BJ’s that, based on our numbers, is providing an improved experience. You know, that is exciting because hopefully a number of those people are gonna have a good experience and come back to us. When I think about evolving the Pizookie Meal Deal, there’s a couple of different things that I would point to. You know, one is, as I talked about some of the chicken sandwich work that we have done and how we’ve felt confident in what we’ve seen in testing and are gonna roll those out as part of Q3 menu.

We’re taking an opportunity within PMD, for example, at the $13 level, to retire one of our less performing items on there, and we’re gonna bring in kind of a core chicken sandwich. The reason I mention that is ’cause if you remember the Smash Burger, we introduced the Smash Burger exclusively on PMD, and then it became very popular, and people wanted it, and then it became kind of a mainstay on the menu. We are gonna be doing a couple of premium chicken sandwiches on the menu, but kind of an entry chicken sandwich on PMD that I think potentially could play a similar role for chicken sandwiches as hopefully Smash Burger did for burgers for us.

There’s the tiering, which is, you know, we have a lot of people who come and engage in PMD, and we wanted to give them an opportunity for, you know, our best and most frequent customers who are coming in and taking advantage of that deal to have trade-up opportunities. We’ve developed a premium tier offering. It’s just a few offerings where we’re able to condense the 13 a little bit, open up a trade-up tier a little bit. I’m excited to see how the test goes. It’s gonna be starting in the next 2 days here. We feel good about the products that we’re putting into that tier. We think it’ll be a compelling partnership to the 13.

Alexander Slagle, Analyst, Jefferies: Great. That’s helpful. Then just on marketing spend, just remind us the percentage of sales in the 1Q and what the 2Q outlook looks like. I know you gave some comments on that.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah. When I look at marketing spend, I guess the thing that I would point us back to is that when we look at it year-over-year in terms of the full-year marketing spend, we’re planning flat year-over-year. I think it’s 2.2%, if I’m not mistaken, reinvestment from a, from a marketing spend percentage point of view. We did make a strategic decision to move dollars out of Q1 to reinforce Q2. As I said, we call it celebration season. It’s kind of one of our most critical seasons. That was because, you know, when you think about the natural shape of our year and what the important quarters are, Q1 is always a choppy time, right? It’s, you know, you have weather.

You’ve got, you know, January and people eating and drinking differently and all those types of things. We felt that with our evolved marketing strategy, we could get more out of less in Q1 and reinforce Q2. The biggest shift is really between Q2 and Q1, but overall, the percentage of sales year-on-year will remain flat.

Alexander Slagle, Analyst, Jefferies: All right. Thank you.

Operator: The next question is from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia, Analyst, William Blair: Hi, thanks for taking the question. Sorry if I missed this, but I’m curious what you learned from your first pizza LTO. When you talk about the growth that you saw in pizza and burger, which is really quite amazing, what have you seen consumers shift away from? Kind of what did that come at the expense of?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah. The LTO, the Mike’s Hot Honey LTO, it performed really well. It was our third, I believe, highest performing pizza in our pizza lineup, which we felt pretty good about. It had really good scores. You may see it rear its head again, sometime later in the year. We felt really good about that. We’ve actually just moved into our next kind of pizza LTO, which is a burrata pizza. Think of like a margherita pizza, but with burrata cheese, which, you know, I’m pretty excited about. It’s a nice premium offering, but also not a meat-based offering. Excited about that. You may actually try it soon, Sharon. The, in terms of Sorry, the second part of the question.

With respect to the growth of burgers and the growth of pizza, I mean, we’ve seen the sales growth, we’ve seen units per store per day growth, and overall, we’ve seen, you know, trading into pizza and trading into burgers is margin accretive to the menu. We feel good about any sort of incident movement there from a margin percentage point of view. Where we’ve seen probably a little bit of movement around the menu is in some of our steaks and Slow-Roasted category and in some of our specialty entrees. We’ve seen some movement there while we’ve seen a lot of growth in pizza and burgers.

Sharon Zackfia, Analyst, William Blair: Okay. Thank you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Sure.

Operator: The next question is from Nick Setian with Mizuho. Please go ahead.

Nick Setian, Analyst, Mizuho: Thanks for taking the question. It was very helpful, the cost commentary and the other OpEx commentary, but you, I didn’t hear anything about labor. Would you mind sharing kind of what your thoughts are around Q2 labor and maybe for the full year? Just bigger picture, you know, where do you think the opportunities around sort of remaining cost cuts and efficiency initiatives are across the P&L?

Allison Arps, Analyst, Piper Sandler1: Nick. Hey, this is Todd. I’ll start there. As we look at labor, if I look at last year in Q2, we ran a little over 35%, 35.4%. Part of our commentary on Q1, navigating those weather ups and downs is not easy for an ops team. We were really pleased with the team, the job our team did in Q1, both on the margin side and the guest experience side, but we certainly feel like there’s opportunity there as we go forward. As we look at the balance of the year, we think there’s opportunity to improve our labor margins. Primarily, certainly the traffic traction that we have leads that, right?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: As traffic grows, we’re able to leverage our fixed costs, and so that’s a leading piece of it. There are specific initiatives in place. We work with our operators, you know, on a daily and weekly basis to learn, you know, what are best practices and how do we to implement those across the system. As we look forward, we think there’s opportunity to improve that through the balance of the year.

Nick Setian, Analyst, Mizuho: Thank you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Thank you, Nick.

Operator: The next question is from Jon Tower with Citi. Please go ahead.

Jon Tower, Analyst, Citi: Great. Thanks for taking the questions. Maybe starting, you know, obviously moving to this premiumization test on the PMD is interesting. I’m just curious, is this something that’s spawned by consumer behavior that you’re already seeing, meaning someone’s coming in, getting the $13.99 and then, you know, adding a few more things to the menu such that you feel comfortable with the idea of moving in this direction?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: It’s less spurred, you know, by that, although, you know, we do see people coming in for the Pizookie Meal Deal and, you know, adding appetizers. Obviously, it doesn’t include a drink, the vast majority of Pizookie Meal Deals also have drink attached to them. Those are opportunities. It’s really just the idea of, as we go forward, optimizing that $13 segment to the most high performing, you know, products within the segment, giving those people who are coming in looking for that kind of social splurge need state, looking for kind of an entry point like the Pizookie Meal Deal, to give them a place to go if they wanna go for something more premium.

That it’s a hypothesis based on, you know, what we see in our business is the way people kind of navigate our broad menu. We see a lot of people come in at different entry points when they’re going for that social splurge occasion. Secondarily, you know, obviously observations in the market about how this tiering can work and work effectively for your business.

Jon Tower, Analyst, Citi: Got it. Okay, cool.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah

Jon Tower, Analyst, Citi: the other World Cup’s coming up on you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah

Jon Tower, Analyst, Citi: It’ll be at the end of your fiscal second quarter. Obviously, you talked to the idea of the celebration season as being something that’s important, but I know in the past, certainly when the World Cup’s been more aligned with your time zones, there has been an impact on the business. Curious how you’re thinking through either marketing around it or building up any, you know, business around it if anything at all.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: I mean, when we are looking at it, you know, I’m hopeful that the World Cup, when you think about it year on year on year will provide some tailwinds. In my previous life, which was, you know, much more sports bar rooted, with respect to World Cup, you really saw material movement around U.S. games, Mexico games, and sometimes when there was like, you know, a really, really big matchup. They were kind of geographical and specific to matchups. We’ve looked at that in terms of our planning. We’ve looked at also where we have restaurants in proximity to stadiums and venues where games are going on to make sure we’re doing the right things locally.

Then, you may see some fun riffs on some of our iconic products that live into celebrating the World Cup as well as, you know, an important year for our, for the U.S. We’re playing around there. Yes, on our radar, hope it’ll provide, you know, some tailwinds, and we’re gonna have a little bit of fun with it from a marketing and engagement perspective.

Jon Tower, Analyst, Citi: Got it. Thanks for taking the questions.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Sure.

Operator: The next question is from Brian Mullan with Piper Sandler. Please go ahead.

Allison Arps, Analyst, Piper Sandler: Hi, this is Allison Arps from On for Brian. Thanks for taking the question. Just one more on labor, but on the activity-based labor model, what % of stores have it today? Any commentary you can share on learnings or data points you’ve noted through the scaling of this rollout, would be great. Thank you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Yeah, yeah. We’re still at about a third of our stores that have the activity-based labor model. We’re still targeting for it to be deployed to the system over the course of this year. We probably won’t do much of that in Q2 because of the importance of Q2, so the next rollout phase will be probably more focused in Q3. What we continue to see with it is it suggests that we have what I would call some marginal savings from a labor perspective because our looseness around our shoulder hours are more loose than the incremental labor we need at our peak hours, is what it’s, the model is suggesting. The real KPIs that we continue to look at, are in those restaurants, are we seeing improvements across our guest metrics?

We’re pleased with that, particularly, where we’re seeing, I think most of the movement is in our speed metrics, which, you know, stands to logic as you get the right people in the right place at the right time. Overall, very much a build on the same story that you’ve heard before on where we are and where we’re going with that.

Allison Arps, Analyst, Piper Sandler: Thank you.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Thank you. Thank you.

Operator: The next question is from Todd Brooks with Benchmark Stonex. Please go ahead.

Allison Arps, Analyst, Piper Sandler0: Hey, thanks for taking my questions. First I was wondering about visibility into celebration season, either through some of the advanced reservation capabilities and people utilizing those and being more aware of them year-over-year, or we’re kind of in the middle of graduation season now. Just, Lyle, what’s your take on the front end of celebration season here?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: I mean, as I kinda mentioned in the, I think in my comments, Todd, is, you know, we’ve been pleased with the performance as we’ve gone into Q2 and some of the accelerated outperformance we’ve seen against Black Box benchmarks. You know, we feel good about how Q2 has gotten out of the gates for us and, you know, hope that bodes well for the rest of the celebration season. I think we have pretty strong plans that are, you know, reinforcing our core equities that we’ve been building off of. I feel really good about the plans we have in place and at least how the quarter’s gotten started. Overall, feeling good right now.

Allison Arps, Analyst, Piper Sandler0: Okay. Is this a period that’s so high volume that there’s not an opportunity to drive a lot more incremental traffic year-over-year? It’s more of a hard to tell or do you see opportunities to drive more traffic through the boxes this year?

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: I mean, look, when I look at our, you know, top performing restaurants and you look at the AUVs that they’re driving, there’s clearly headroom for most of the restaurants in our system to continue to service and move more people through our boxes. I think it’s a matter of us operating as efficiently as possible and really doing the fundamentals right. It’s about having it staffed right, it’s about full hands in and out of the kitchen. It’s about busing and turning tables quickly. We have our teams very focused on that. You know, we’ve over the past couple of years been pushing towards, you know, getting more upfront reservations or at least as many as we can ’cause it helps us be as planful as possible.

You know, I think one of the things that we get credit for at BJ’s from our guests is we’re a place where, you know, you can book ahead of time, but we’re also a place that tends to be pretty flexible on accommodating people as they come through our doors. I think, you know, that tends to be to our benefit. You know, I’m excited about the season.

Allison Arps, Analyst, Piper Sandler1: Hey, Todd, I’d just quickly add, Lyle commented on it in his prepared remarks, right, we had, you know, roughly half of our restaurants setting records on Valentine’s Day. You know, true for us, true for many in the restaurant business that that is the typically one of, if not the highest volume days of the year. Seeing that many restaurants able to raise the bar even further, I think to me, very much says we have opportunity to continue to grow even in the high season of Q2.

Allison Arps, Analyst, Piper Sandler0: Okay, great. Thank you both.

Lyle Tick, Chief Executive Officer and President, BJ’s Restaurants: Thank you.

Operator: This concludes our question and answer session, and the conference has also now concluded. Thank you for attending today’s presentation. You may now disconnect.