BJ's Restaurants Q3 2025: Contradictions Emerge on Pizookie Meal Deal Impact, Pricing Strategy, Consumer Behavior, and Menu Optimization

Date of Call: October 30, 2025

Financials Results

• Revenue: $330M, up 1.4% YOY; same-store sales +0.5%
• Gross Margin: Cost of sales 25.7% (gross margin up 90 bps YOY)
• Operating Margin: 12.5% restaurant-level operating margin, up 80 bps YOY; adjusted EBITDA margin 6.4%, up 70 bps YOY

Guidance:

• FY25 comps reiterated ~+2%.
• FY25 restaurant-level operating profit $211M–$219M.
• FY25 adjusted EBITDA $132M–$140M.
• FY25 capital expenditures $65M–$75M.
• FY25 share repurchases increased to $65M–$80M (depending on market conditions).
• Inflation assumption: overall inflation rising from ~2% in Q3 to mid-2% in Q4.

Business Commentary:

* Sales and Traffic Growth: - BJ's Restaurants reported 0.5% same-store sales growth for Q3, with a strong acceleration in the final two months, averaging 1.5% comp growth. - Traffic improved to 3.5% year-on-year and 9% on a two-year basis, outperforming Black Box casual dining benchmarks. - The growth was driven by improvements in guest metrics, increased frequency, and effective marketing strategies that focused on social media and word-of-mouth engagement.

• Profit Expansion:
• The company delivered 12.5% restaurant level operating margins and 6.4% EBITDA margins, an improvement of 80 and 70 basis points year-over-year, respectively.

• Profit expansion was supported by a focus on table stakes, simplification efforts, restaurant outliers, and the Pizookie Meal Deal platform.

• Menu and Marketing Strategies:

• The introduction of the All-American Smash Burger and Spooky Pizookie significantly increased brand awareness, with over 2 billion impressions for National Cheeseburger Day.

• Earned media impressions rose over 300% year-on-year, driven by a pro-active approach to social media engagement and influencer marketing.

• Share Repurchase and Financial Health:

• BJ's Restaurants repurchased and retired 996,000 common shares for $33.2 million during Q3, with a year-to-date total of 1,838,000 shares for $62.4 million.
• The company increased its annual share repurchase expectations to $65 million to $80 million, reflecting a healthy balance sheet with net funded debt of $64.1 million.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted a fifth consecutive quarter of sales and traffic growth and fourth consecutive quarter of profit expansion, called out record sales and profitability 'not seen in over 6 years,' and reiterated full-year top-line guidance (~2%), signaling confidence and momentum.

Q&A:

• Question from Alexander Slagle (Jefferies LLC): I wanted to ask about the drivers of the acceleration in traffic. And it looks like the back half of September and into October... could you expand on what drove that acceleration?
  Response: Traffic acceleration driven by improved guest metrics/frequency, continued growth of the Pizookie Meal Deal, and increased social/influencer marketing (notably Spooky Pizookie and Smash Burger).

• Question from Alexander Slagle (Jefferies LLC): You've been here a year—anything in the business surprising you or shaking out differently than expected?
  Response: Nothing surprising; pleased with recent acceleration and team execution against strategic priorities.

• Question from Brian Bittner (Oppenheimer & Co.): To hit ~2% for the year, is Q4 closer to ~3%? How should we think about Q4 comp growth?
  Response: Management expects Q4 comp growth around 2%–2.5%, which lands the year near ~2%.

• Question from Brian Bittner (Oppenheimer & Co.): Are you seeing any pullback in consumer behavior—changes in frequency or other dynamics others are seeing?
  Response: They're seeing rising frequency across age and income cohorts that more than offsets check compression; PMD is driving incremental occasions and lift.

• Question from Jeffrey Bernstein (Barclays): Can you update on remodels—costs, sales lift, and planned cadence for 2026 as you move toward renovating pre-2016 stores?
  Response: Remodels deliver attractive returns; plan to continue program in 2026 at a moderated pace to test the refreshed prototype, then resume ~20–25+ remodels annually as learnings are applied.

• Question from Jeffrey Bernstein (Barclays): On new-unit growth—how should we think about ramp in '27 and beyond and constraints (people, real estate, ops)?
  Response: Pipeline being built; prototype and returns will be validated in 2026, step-up in 2027 and fuller run-rate by 2028, focusing on expanding within existing footprints (concentric-market approach).

• Question from Sharon Zackfia (William Blair): For the 2 new prototypes, any key changes in box size or features we should expect?
  Response: Prototype will contemporize atmosphere while preserving BJ's core design cues, applied flexibly to different sizes/costs and testing conversions vs. ground-up builds.

• Question from Sharon Zackfia (William Blair): On the revamped pizza launch—how should we think about attach/incidence and check impact; will it act as a value offering alongside PMD?
  Response: Tests showed a modest uptick in average check and ~10% increase in pizza incidence; pizza refresh expected to build trial over time and complement PMD rather than create a short-term inflection.

• Question from Todd Brooks (The Benchmark Company): With a year of foundational work, where is the brand better positioned to play offense in 2026?
  Response: Stronger foundations enable more front-foot activity on menu renovations (post-pizza categories), prototype rollout, and enhanced hospitality/execute-driven initiatives.

• Question from Todd Brooks (The Benchmark Company): How is PMD performing as a check-builder—any add-on success and how are teams selling upgrades?
  Response: PMD is growing in frequency and attachment; full-size Pizookie trade-ups sell better at dinner, Smash Burger drove momentum, but add-on traction remains limited—further tests planned in 2026.

• Question from Brian Mullan (Piper Sandler): In pizza test locations, was lift driven proactively or organically, and what's the go-to-market plan at rollout?
  Response: Test lifts were largely organic with loyalty and in-restaurant merchandising; rollout will use external marketing focused on social/PR/influencers, in-restaurant sampling and loyalty communications.

• Question from Brian Mullan (Piper Sandler): On share repurchases, any leverage target or parameters to keep in mind?
  Response: No fixed leverage target; balance sheet has capacity—repurchases will be opportunistic while retaining 'dry powder' for remodels and new-unit growth.

• Question from Jon Tower (Citigroup): How are you thinking about pricing power given check pressure from higher PMD mix and broader menu pricing over the next 12 months?
  Response: They see pricing power but will be judicious—centering the value equation, using pricing alongside mix, category revenue management and entry points (PMD, Daily Brewhouse) to drive check.

• Question from Jon Tower (Citigroup): Where are you on digital and off-premise improvements?
  Response: Backend fixes (reducing missing/incorrect orders, KDS tweaks) are underway now; consumer-facing digital merchandising and friction reduction are prioritized for execution in 2026.

• Question from Jon Tower (Citigroup): Does your Q4 guidance account for holiday calendar shifts (e.g., Halloween, New Year's Eve)?
  Response: Yes—management confirmed Q4 guidance is adjusted for the cited holiday calendar shifts.

Contradiction Point 1

Pizookie Meal Deal Impact on Traffic and Consumer Behavior

It involves the impact of the Pizookie Meal Deal on traffic and consumer behavior, which is crucial for understanding the strategy and performance of the company.

What are the drivers of the traffic acceleration, particularly the late-September to early-October trends differing from benchmarks? - Alexander Slagle (Jefferies LLC, Research Division)

2025Q3: Some factors behind the traffic acceleration include improvements in guest metrics and value, which have begun translating into frequency increases. The Pizookie Meal Deal has also grown in frequency, giving confidence as it was lapped. - Lyle Tick(CEO, President & Director)

What is the success of the Pizookie Meal Deal and similar platforms in enhancing the everyday value proposition? What are the next steps for these platforms? - Alexander Russell Slagle (Jefferies LLC)

2025Q2: The Pizookie Meal Deal continues to resonate with guests and drive new and repeat visits. - Lyle D. Tick (CEO, President & Director)

Contradiction Point 2

Pricing Strategy and Value Proposition

It involves the company's pricing strategy and value proposition, which are key to understanding the company's competitive positioning and financial outlook.

How is PMD impacting pricing power, and what is your pricing strategy moving forward? - Jon Tower (Citigroup Inc., Research Division)

2025Q3: We are focused on the value equation, ensuring our product and experience are worth the price. We will continue to capitalize on guest metrics and value scores, potentially leveraging pricing opportunities through key offerings like PMD and Daily Brewhouse Specials. - Lyle Tick(CEO, President & Director)

Can you discuss the potential impact of the new pizza platform on sales and consumer behavior? - Todd Morrison Brooks (The Benchmark Company, LLC)

2025Q2: We think this is more about value than just price. We need to ensure we are delivering value to the guest at every price point. - Lyle D. Tick (CEO, President & Director)

Contradiction Point 3

Consumer Behavior and Traffic Trends

It involves changes in the company's perspective on consumer behavior and traffic trends, which are crucial for understanding the demand and growth potential of the business.

Have you noted any changes in consumer behavior or frequency trends with the 1.5% comps accelerating into the fourth quarter? - Brian Bittner (Oppenheimer & Co. Inc., Research Division)

2025Q3: We are seeing an increase in frequency across all age and income cohorts, with frequency driving average spend per customer. While there is some check compression, the frequency increase makes up for it. - Lyle Tick(CEO, President & Director)

What's your macroeconomic view and how does it impact consumer behavior? - Jeffrey Bernstein (Barclays Bank PLC, Research Division)

2025Q1: We are not seeing any material changes in consumer behavior across income cohorts, traffic, check or dayparts. - Lyle Tick(President & Chief Concept Officer)

Contradiction Point 4

Menu Optimization and Product Focus

It relates to the company's strategy and focus on menu optimization and product offerings, which directly impact the guest experience and brand perception.

What are the key changes for the two new locations and next year's prototypes? - Sharon Zackfia (William Blair & Company L.L.C., Research Division)

2025Q3: The new prototype will focus on strengthening the atmosphere to reflect the BJ's DNA. It will be more flexible and focused on right size, cost, and place, potentially testing conversions and ground-ups. No specifics on size or features were provided. - Lyle Tick(CEO, President & Director)

What changes are being made to the menu? - Jon Tower (Citigroup Inc., Research Division)

2025Q1: Menu optimization involves reducing long-tail items and focusing on core offerings. Pizookie platforms will be reduced by three items, and the focus is on improved execution and consistency. - Lyle Tick(President & Chief Concept Officer)

Contradiction Point 5

Menu Simplification and Innovation

It involves differing statements on the approach to menu simplification and innovation, which are key strategies for maintaining product relevance and customer satisfaction.

Can you provide an update on the remodel program, including costs, sales lift, and 2026 plans? - Jeffrey Bernstein(Barclays Bank PLC, Research Division)

2025Q3: We are seeing a positive return from our remodel program, which will continue at a moderated pace in 2026 as we pilot a new prototype. - Lyle Tick(CEO, President & Director)

What are the simplification efforts and plans to reduce the menu size? - Brian Mullan(Piper Sandler & Co., Research Division)

2024Q4: We see opportunities to streamline items that are not brand equity or commercially strong. This will allow for innovation and menu refreshment. Implementation is planned for the second half of this year. - Lyle Tick(President and Chief Concept Officer)