BJ's Restaurants reported Q2 fiscal 2025 sales of $366 million, a 4.5% increase year-over-year, with comparable restaurant sales up 2.9% driven by 3.3% traffic growth.
Cost of sales was 24.8%, 90 basis points favorable year-over-year, with food cost inflation at approximately 2%, down from 3% in Q1.
Labor and benefit expenses were 35.4% of sales, 70 basis points favorable to last year, driven by better labor scheduling and operational execution.
Net debt decreased by $5.9 million to $34.5 million, supporting share repurchases and remodel investments.
Net income was $22.2 million with diluted earnings per share of $0.97, a 35% increase from $0.72 last year.
Occupancy and operating expenses were 22.8% of sales, slightly unfavorable by 10 basis points due to $2.5 million incremental marketing investments.
Restaurant-level cash flow margins improved by 150 basis points to 17%, and adjusted EBITDA margins increased by 120 basis points to 11.5%.
Applebee's First Positive Traffic in 2 Years Driven by 2 for $25
Applebee's achieved positive comparable sales of 4.9%, driven by a significant increase in traffic, the first since Q1 2023.
Traffic growth was supported by the 2 for $25 value platform, which the company is leaning into as a primary marketing message.
Introduction of new menu items each quarter, including Bourbon Street Cajun Pasta, New Skillets & Steak, and Chicken Parmesan Fettuccine, to sustain traffic and sales growth.
Operational processes for new menu rollouts are well-tested and manageable, with franchisees supporting frequent updates.
Value mix decreased slightly to 30%, but remains above historical levels, with positive guest feedback and strong traffic signals.
Impact of Hardie's Business Attrition on Volume and Profitability
Hardie's protein and produce programs were partially or fully exited during Q2, impacting reported case growth and volume metrics.
Excluding these programs, specialty case growth was 5.8%, and center-of-the-plate pounds increased by 5.8%.
The company expects continued impact on reported volume numbers until the second half of 2026, as they fully cycle out these high-volume, low-margin programs.
Management emphasizes that shedding non-core business improves overall profitability and aligns with their long-term strategic focus.
Strategic Reset and Transformation Initiatives Amidst Market Softness
Beyond Meat announced a comprehensive reset plan including appointing John Boken as interim Chief Transformation Officer to lead enterprise-wide efficiency efforts.
The company is intensifying expense reductions, including a workforce reduction and operational cost-cutting measures, to align with current demand levels.
Management emphasized a focus on gross margin expansion through product portfolio optimization, facility investments, and supply chain cost reductions.
Beyond Meat is actively pursuing expanded distribution channels in U.S. retail and plans to increase the use of the Beyond brand for broader consumer protein needs.
Leadership expressed confidence that the current challenges are transient and that cost structure improvements and scale will eventually enable competitive pricing.
The company aims to achieve EBITDA positive operations by the second half of 2026 despite ongoing market softness.
Top 4 DMAs (Los Angeles, San Francisco, Houston, Phoenix) experienced outsized macroeconomic pressures in Q2, contributing to a 30 basis point reduction in system-wide same-restaurant sales.
Markets affected by macro pressures saw a significant downturn starting mid-June, punctuated by headlines and macroeconomic news.
Management remains optimistic that consumer sentiment volatility will moderate over time, which could stabilize sales.
Brinker's 3-Year Turnaround Achievements and Future Outlook
Brinker has completed three years into its turnaround plan, with consistent positive results over seven quarters of outperformance in traffic and sales growth.
The company's average restaurant volume increased from $3.1 million in 2022 to $4.5 million in 2025, reflecting significant operational improvement.
Brinker's restaurant operating margin improved from 11.9% in 2022 to 17.6% in 2025, driven by menu simplification, increased labor investment, and better equipment.
The company paid down over $570 million of debt in three years, reducing leverage to 1.7x and strengthening its balance sheet.
Management emphasizes that the brand is fundamentally different today, with a focus on fundamentals, marketing, and operational excellence.
Dafinchi
