BJ's Restaurants (BJRI) Oppenheimer’s 24th Annual Consumer Growth & E-Commerce Conference summary

Consumer trends and behavior

• Lower-income consumers (under $50,000) have reduced restaurant visits, but spending patterns among other guests remain stable, with continued growth in add-ons and no significant check management.

• Alcohol sales have normalized to 2019 levels, attributed to less celebratory dining post-COVID, while special occasions like Valentine's Day and Mother's Day continue to drive strong traffic.

• Consumers are increasingly discretionary, with the industry shifting toward more promotional activity and price-focused messaging.

• Restaurant trends normalized in the second half of 2023, and easier comparisons are expected to support comp sales growth in the latter half of 2024.

Growth strategy and unit economics

• Long-term targets include 8%-10% annual sales growth, driven by 5% unit growth and mid-single digit same-store sales increases.

• Growth is governed by management and staffing quality, not capital or real estate constraints, with a focus on quality over quantity.

• The varied menu and polished casual positioning support expansion from 200 to 400 units, with new restaurant growth tied to achieving margin and comp sales goals.

• Adjustments to the restaurant prototype are expected to reduce build costs to about $6 million per unit.

Remodels and capital allocation

• By year-end, about 65 restaurants will be remodeled, with a target of 135 total; remodels aim for 20% cash-on-cash returns and consistent sales lifts.

• Remodel investments will continue but at a slower pace, with opportunities for lower-cost initiatives in newer units.

• Free cash flow supports share buybacks, with 2024 repurchases expected to exceed 2023, but capital is prioritized for restaurant investment and remodels.