BJ’s Restaurants (NASDAQ:BJRI) reported second-quarter fiscal 2026 results marked by continued traffic growth, higher restaurant-level profit and an increased full-year outlook, while management said it is investing in menu innovation, restaurant upkeep and future unit development.
Chief Executive Officer and President Lyle Tick said the company recorded its eighth consecutive quarter of sales and traffic growth and its seventh consecutive quarter of profit growth. Comparable restaurant sales rose 6.5% in the second quarter, driven by 8.3% traffic growth. The company said it continued to outperform Black Box casual dining benchmarks.
Traffic Growth Offset Check Pressure and Food Inflation
Average check declined 1.8% during the quarter, as guest mix shifted toward promotional and seasonal offerings. Tick said Tuesday promotions aimed at younger consumers and the Pizookie Meal Deal on Fridays contributed to the pressure on check averages, but said the company was generating “profitable traffic” and was not overly dependent on any single day or promotion.
Seasonal Pizookie offerings were a major driver of traffic. The Biscoff Pizookie doubled Pizookie incidents compared with the prior year during the quarter, according to Tick. He said the product generated substantial trial, including from younger customers making smaller purchases, while supporting repeat visits over time.
Management said sales and traffic increased across all geographies, dayparts and days of the week. Mother’s Day sales rose more than 8% year over year, while Father’s Day sales increased more than 3%. More than 80 restaurants set daily or weekly sales records during the quarter, Tick said.
Restaurant-level operating margin expanded 20 basis points to 17.2%, despite cost-of-sales pressure. Cost of sales increased 70 basis points to 25.5% of sales, primarily due to about 5% inflation in the company’s commodity basket. CFO Todd Wilson said beef costs rose about 20% and were the largest contributor to the pressure, while severe weather and transportation expenses also increased produce costs.
Wilson said the company expects year-over-year commodity inflation to moderate during the remainder of the year, though sequential beef-cost increases remain a factor. BJ’s expects some cost-of-sales improvement in the second half, but not a major decline, he said.
Labor Leverage and Operational Investments
Total labor expense improved 90 basis points to 34.5% of sales as higher revenue and operational execution more than offset a 10-basis-point increase in workers’ compensation costs. Management said restaurant operators improved hourly labor, management and benefits expenses while continuing to raise guest-satisfaction measures.
The company also cited lower food waste and fewer food and beverage comp incidents. Tick said investments in training, point-of-sale simplification, tablet upgrades and an AI-supported activity-based labor model are intended to make restaurant jobs easier and support service levels. The labor model is expected to expand through year-end.
BJ’s shifted marketing spending from the first quarter to the second quarter to support its celebration season. Second-quarter marketing expense rose $1.2 million, or 20 basis points, year over year. However, year-to-date marketing dollars were unchanged and marketing expense declined 10 basis points as a share of sales, Wilson said.
Tick said the company continues to place greater emphasis on social, digital, cultural and word-of-mouth marketing, particularly for product news and Pizookie campaigns. The company plans to hold marketing investment as a percentage of sales roughly flat for the full year while seeking further efficiency.
The company increased repair and maintenance spending by about $1 million, or 14%, during the quarter as part of a broader effort to address deferred facilities work and improve restaurant conditions. Management expects to continue investing at a measured pace over the next several quarters.
Menu Work and Development Plans
BJ’s said its refreshed pizza, burger and chicken sandwich categories are producing higher incidence, sales, average prices and dollar margins than prior offerings. The company has invested more than $1.5 million in product quality, particularly in pizza, according to Tick.
Management does not expect another broad category refresh before year-end, though it is testing additional category and item changes. Seasonal offerings may provide early indications of future menu work, Tick said. The company is also testing a potential premium tier for the Pizookie Meal Deal, though management said the effort remains in an early stage.
Tick said the company expects average-check pressure to ease in the third quarter and projected a return to moderate average-check growth in the fourth quarter. Wilson said the extent of seasonal Pizookie popularity could affect those results because strong Pizookie demand can reduce check averages while benefiting traffic, sales and profit dollars.
BJ’s plans to open two new restaurants in the fourth quarter: one in Buckeye, Arizona, and one in Joliet, Illinois. Tick said both locations will feature a refreshed version of the brand’s restaurant design. The company operates 219 existing restaurants.
The company also completed five remodels during the quarter and said remodeled locations are generating traffic growth above the rest of the portfolio.
Guidance Raised as Debt Declines
Based on first-half performance, BJ’s increased its fiscal 2026 guidance for several metrics:
- Comparable restaurant sales growth is now expected to be 3% to 4%, compared with prior guidance of 1% to 3%.
- Restaurant-level operating profit is projected at $228 million to $235 million, up from $221 million to $233 million.
- Adjusted EBITDA is expected to total $145 million to $152 million, compared with prior guidance of $140 million to $150 million.
- Capital expenditures remain forecast at $85 million to $95 million.
- Share repurchases remain authorized at up to $50 million, subject to market conditions.
During the second quarter, BJ’s spent $23.3 million on capital expenditures, repurchased about 64,000 shares for $2.4 million and repaid $18 million of debt. Net debt ended the quarter at about $30 million, down from $61 million at the beginning of the year.
Wilson said the third quarter began with continued sales and traffic growth, with the company again outperforming the Black Box casual dining benchmark. He said Black Box casual dining traffic remained slightly negative and sales slightly positive early in the third quarter, similar to the second-quarter pattern.
About BJ’s Restaurants (NASDAQ:BJRI)
BJ’s Restaurants, Inc is a publicly traded casual dining chain known for its deep‐dish pizzas, California‐style thin crust offerings and in‐house craft beer selections. Operating under the BJ’s Restaurant & Brewhouse brand, the company combines a microbrewery concept with full‐service dining, offering an extensive menu that includes appetizers, salads, pasta dishes, sandwiches and the signature Pizookie dessert.
Founded in 1978 in Orange County, California, BJ’s Restaurants began as BJ’s Chicago Pizzeria, bringing a Chicago‐style pizza experience to the West Coast.
