BJ’s Restaurants reached a new high in off-premise sales in the first quarter and is considering ways to make it easier for those customers to place and pay for those orders, executives said Thursday.
BJ’s off-premise sales rose to 10.1% of the company’s total in the quarter ended April 2 and the company is investigating new technology and adapting operations to make that growing segment run smoother, executives at the Huntington Beach, Calif.-based casual-dining brand said on a first-quarter earnings call with analysts.
Greg Trojan, BJ’s CEO, said the company is looking to make it “easier to access our menu and make mobile pay easier to access.”
Trojan acknowledged BJ’s has “found hurdles to higher adoption rates” of its smartphone application, which for several years has allowed customers to order and pay within the app as well as add themselves to waitlists and accumulate loyalty points.
However, the company is “testing some capabilities around going right to mobile ordering or mobile paying” through a phone’s Internet browser and allowing them to do those transactions without having to use a brand-specific app.
Greg Levin, BJ’s president and chief financial officer, said the company is also adding technology for tracking where parts of an off-premise order are in the kitchen and communicate with the customer, such as texting back confirmations and adding geo-fencing to let the restaurant team know when the patron has arrived at the location.
Trojan said BJ’s is also “changing where the off-premise orders are assembled” and adding space and storage area in the kitchens so order can be handled in the kitchen and not burden front-of-the-house takeout staff.
“We're installing terminals that are linked to our kitchen management system,” Trojan said, “so both sides of the off-premise equation in the kitchen and in the takeout areas can see the status of particular orders.”
That holistic view of technology is “probably the next frontier,” he added.
Trojan said BJ’s will also continue to deploy handheld devices to wait staff, saying management has been happy with the results but executives have noticed increased maintenance costs, which have been higher than in early tests.
“We are still very interested in making our dining experience very personable from a server perspective,” he noted. “We’re not interested in technology taking over the fundamentals of a dining experience, but we do think there are some specific ways we can get people to more quickly reorder the second beer or a Pizookie, etc., and make the paying part of the transaction a lot more seamless as well.”
Trojan said immediate goals for off-premise are aimed at growing the large-party and catering part of that business.
“We see this as an opportunity to tap into a new guest occasion and category, as well as another important way to grow our average check and profitability,” he said. “Our June large-party channel launch should start to deliver another off-premise boost in the second half of this year.”
For the first quarter ended April 2, BJ’s reported net income fell 12.3% to $12.9 million, or 60 cents a share, from $14.7 million, or 70 cents a share, in the prior-year period. The first quarter included a $400,000 expense related to adoption of new lease accounting standards. Revenues rose 4.3% to $290.6 million from $278.5 million in the same quarter last year.
Same-store sales in the first quarter increased 2%, with some weather disruption, Trojan said.
Analyst Alexander Slagle of Jefferies Equity Research said in a note late Thursday that same store sales were “slightly better than expected” and the two-year average same-store sales were holding steady at 3.1%
“We expect BJ’s will benefit from a solid balance of traffic and check-driving initiatives in 2019,” Slagle wrote, “with continued growth in its Brewhouse Specials platform, a push to large-party catering, menu innovation/new slow-roast offerings (tri-tip sirloin) and more effective management of loyalty and discounting initiatives.”
BJ’s Restaurants owns and operates 204 casual-dining restaurants in 27 states. In the first quarter, the company opened one new restaurant in Toledo, Ohio., and in the second quarter it debuted a new unit in Sterling Heights, Mich.
“We expect to open an additional restaurant in the second quarter and four to six restaurants in the second half of this year for a total of seven to nine new restaurants in fiscal 2019,” Trojan said in a statement and added in the earnings call that the newer restaurants were performing well.
“The 15 restaurants that we’ve opened over the last two years, all of which are outside our core California, Texas and Florida markets, are averaging approximately $5 million in annual sales right now,” Trojan said.
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