Why BJ's Restaurants, Inc. Stock Fell 11.4% in July

By Jeremy BowmanMarketsFool.com

Image source: BJ's Restaurants.

Continue Reading Below

What:Shares ofBJ's Restaurants, Inc.(NASDAQ: BJRI) slipped 11.4% last month according to data from S&P Global Market Intelligenceas the company turned in a subpar second-quarter earnings report. As you can see from the chart below, the entirety of the stock's fall came on July 27 after the report came out.

BJRI data by YCharts.

So what:Reflecting a trend in the restaurant industry, BJ's said comparable sales declined 0.2%, though revenue increased 7.9% to $250.3 million as the company continued to open new restaurants. That figure was below the consensus at $253 million. Earnings per share, meanwhile, increased 19.5% $0.56, missing estimates by a penny.

More From Fool.com

CEO Greg Trojan was positive on the company's overall trajectory, but did acknowledge that comparable sales were softer than expected.

Now what:Management did not provide guidance for the current quarter, but said that comparable sales were down 2% thus far in July, blaming a weakening consumer environment. Over the long term, the company stressed that it has room to more than double its restaurant count from 177 today to 425. It's also targeting lower-cost, smaller-format restaurants that should provide a faster return on investment.

Still, declining comparable sales are always concerning for restaurants, and with the trend aiming downward, the stock could follow.

A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends BJ's Restaurants. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.