NEW YORK (TheStreet) -- BJ's Restaurants (BJRI) was falling 10.5% to $25.95 Thursday after the company announced that it expects first-quarter consolidated restaurant level margins in the 15% to 16% range.
The company stated on a conference call to discuss its fourth-quarter earnings that consolidated restaurant level margins compressed into the 15% to 16% range as comparable sales decelerated during the last two quarters. BJ's Restaurants set a goal to elevated the margins up to the 19% to 20% range; however, it expects the margins to remain in the 15% to 16% range in the first quarter as the company invests for the future. The company said it expects restaurant level cash flow margin to stay in the compressed range at approximately 16% is pressure persists on sales.
For the fourth quarter, BJ's Restaurants reported a 77.7% year-over-year decline in adjusted earnings per share to six cents, which aligned with the Zacks consensus estimate. Revenues increased 8% year-over-year to $199.8 million, nearly in line with the Zacks consensus estimate of $200 million.
TheStreet Ratings team rates BJ'S RESTAURANTS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BJ'S RESTAURANTS INC (BJRI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."