BJ’s 3-year stacked same-store-sales increased +8.2% (+8.9% y/y), representing a 3-year comp acceleration from -1.5% in 1Q22 and +4.8% in 2Q22. The chain’s off-premise sales remained very strong and continue to pace at 2x pre-covid levels. Notably, its catering business grew +75% y/y and was more than double 2019 levels.
Management reported its belief that the increasing trend of workers returning to the office will continue, driving more lunch business as well as in-person meetings which will provide a tailwind for catering in the near term.
Operations benefit from updated software in its server handheld tablets used for order taking, improving functionality & reliability (team member feedback has been positive & servers are more efficient because of the devices).
Food cost inflation has moderated, up +5% y/y during 3Q22 and only up modestly from 2Q22.
Margin improvement initiatives & the benefit of an August pricing round helped partially mitigate the typical margin decline that accompanies its seasonally lowest sales 3Q period. BJ’s restaurant-level cash flow margin was 10.3% in 3Q22, down -1.6% from 2Q22 (its highest sales quarter seasonally) which represented an improvement from the -3.5% delta during the same period comparison during 2019.