BJRI

STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE Certain information included in this Form 10-Q and other filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers may contain “forward-looking” statements about our current and expected performance trends, growth plans, business goals and other matters. Words or phrases such as “believe,” “plan,” “will likely result,” “expect,” “intend,” “will continue,” “is anticipated,” “estimate,” “project,” “may,” “could,” “would,” “should,” and similar expressions are intended to identify “forward-looking” statements. These statements, and any other statements that are not historical facts, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended from time to time. The cautionary statements made in this Form 10-Q should be read as being applicable to all related “forward-looking” statements wherever they appear in this Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the risk factors described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 30, 2025, as updated in our Form 10-Q for the twenty-six weeks ended June 30, 2026, and in other reports filed subsequently with the SEC. GENERAL BJ’s Restaurants is a leading full-service restaurant brand differentiated by a high-quality, varied menu with compelling value, a dining experience that offers our customers (referred to as “guests”) best-in-class service, hospitality and enjoyment, in a high-energy, welcoming and approachable atmosphere. BJ’s is a national restaurant chain that, as of July 30, 2026, owns and operates 219 restaurants located in 31 states. The first BJ’s restaurant opened in 1978 in Orange County, California, and was a small sit-down pizzeria that featured Chicago style deep-dish pizza with a unique California twist. In 1996, we introduced our proprietary craft beers and expanded the BJ’s concept to a full-service, high-energy restaurant when we opened our first large format restaurant with an on-site brewing operation in Brea, California. Today our restaurants feature a broad menu with approximately 90 menu items designed to offer something for everyone including: slow roasted entrees and wings, EnLIGHTened Entrees® such as our Cherry Chipotle Glazed Salmon, our original signature deep-dish pizza, and the world-famous Pizookie® dessert. We also offer our award-winning BJ’s craft beers, which are produced at four in-house brewing facilities, two standalone brewpubs and by independent third-party brewers using our proprietary recipes, alongside a full bar featuring innovative cocktails. Our revenues are comprised of food and beverage sales from our restaurants, including takeout, delivery and catering sales. Revenues from restaurant sales are recognized when payment is tendered. Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor. We sell gift cards which do not have an expiration date, and we do not deduct non-usage fees from outstanding gift card balances. Gift card sales are recorded as a liability and recognized as revenues upon redemption in our restaurants. Based on historical redemption rates, a portion of our gift card sales are not expected to be redeemed and will be recognized as gift card “breakage.” Estimated gift card breakage is recorded as revenue and recognized in proportion to our historical redemption pattern, unless there is a legal obligation to remit the unredeemed gift cards to government authorities. Our guest loyalty program enables participants to earn points for qualifying purchases that can be redeemed for food and beverages in the future. We allocate the transaction price between the goods delivered and the future goods that will be delivered, on a relative standalone selling price basis, and defer the revenues allocated to the points, less expected expirations, until such points are redeemed. All of our restaurants are Company-owned. In calculating comparable restaurant sales, we include restaurants open for at least 18 months as of the beginning of the period presented. Guest traffic for our restaurants is estimated based on the number of guest checks. Cost of sales is comprised of food and beverage costs, including the cost to produce and distribute our proprietary craft beer, soda and ciders. The components of cost of sales are variable and typically fluctuate directly with sales volumes but also may be impacted by changes in commodity prices, a shift in sales mix to items with different cost structures, or changes in level of promotional activities. Labor and benefit costs include direct hourly and management wages, bonuses, payroll taxes, fringe benefits and stock-based compensation, and workers’ compensation expense that are directly related to restaurant level team members. Occupancy and operating expenses include restaurant supplies, credit card fees, general liability and property insurance, third-party delivery company commissions, marketing costs, fixed rent, percentage rent, common area maintenance charges, utilities, real estate taxes, repairs and maintenance and other related restaurant costs. 15 General and administrative expenses include costs for our corporate administrative functions that support existing operations and provide infrastructure to facilitate our future growth. Components of this category include corporate management, field supervision and corporate hourly staff salaries and related team member benefits (including stock-based compensation expense and cash-based incentive compensation), travel and relocation costs, information systems, the cost to recruit and train new restaurant management team members, corporate rent, certain brand marketing-related expenses and legal and consulting fees. Depreciation and amortization are composed primarily of depreciation of capital expenditures for restaurant and brewing equipment and leasehold improvements. Restaurant opening expenses, which are expensed as incurred, consist of the costs of hiring and training the initial hourly work force for each new restaurant, travel, the cost of food and supplies used in training, grand opening promotional costs, the cost of the initial stock of operating supplies and other direct costs related to the opening of a restaurant, including rent expense during the in-restaurant training period. RESULTS OF OPERATIONS The following table provides, for the periods indicated, our unaudited Consolidated Statements of Income expressed as percentages of total revenues. The results of operations for the thirteen and twenty-six weeks ended June 30, 2026 and July 1, 2025, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding. For the Thirteen Weeks Ended For the Twenty-Six Weeks Ended June 30, 2026 July 1, 2025 June 30, 2026 July 1, 2025 Revenues 100.0 % 100.0 % 100.0 % 100.0 % Restaurant operating costs (excluding depreciation and amortization): Cost of sales 25.5 24.8 25.3 24.9 Labor and benefits 34.5 35.4 35.4 35.7 Occupancy and operating 22.8 22.8 22.7 22.9 General and administrative 6.8 5.9 6.5 6.1 Depreciation and amortization 5.4 5.1 5.9 5.2 Restaurant opening - 0.1 - 0.1 Loss on disposal and impairment of assets, net 0.3 0.1 0.4 0.1 Total costs and expenses 95.3 94.2 96.1 94.9 Income from operations 4.7 5.8 3.9 5.1 Other income (expense): Interest expense, net (0.2 ) (0.3 ) (0.3 ) (0.4 ) Other income, net 0.4 1.0 0.1 0.5 Total other income (expense) 0.1 0.7 (0.1 ) 0.2 Income before income taxes 4.9 6.5 3.8 5.2 Income tax expense 0.1 0.4 - 0.2 Net income 4.8 % 6.1 % 3.7 % 5.0 % Thirteen and Twenty-Six Weeks Ended June 30, 2026 Compared to Thirteen and Twenty-Six Weeks Ended July 1, 2025 Revenues. Total revenues increased by $23.3 million, or 6.4%, to $388.9 million during the thirteen weeks ended June 30, 2026, from $365.6 million during the comparable thirteen-week period of 2025. The change in revenues primarily consisted of an increase of 6.5%, or $23.5 million, related to sales from restaurants in our comparable restaurant sales base, offset by decreases in non-comparable restaurant sales. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 8.3%, offset by a decrease in average check of approximately 1.8%, resulting from changes in product mix, partially offset by menu price increases. Total revenues increased by $33.4 million, or 4.7%, to $747.0 million during the twenty-six weeks ended June 30, 2026, from $713.6 million during the comparable twenty-six-week period of 2025. The change in revenues primarily consisted of an increase of 4.5%, or $31.5 million, related to sales from restaurants in our comparable restaurant sales base, and $1.3 million related to sales from new restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 5.3%, offset by a decrease in average check of approximately 0.8%, resulting from changes in product mix, partially offset by menu price increases. 16 Cost of Sales. Cost of sales increased by $8.3 million, or 9.1%, to $99.1 million during the thirteen weeks ended June 30, 2026, from $90.8 million during the comparable thirteen-week period of 2025. As a percentage of revenues, cost of sales increased to 25.5% for the current thirteen-week period from 24.8% for the prior year comparable period. The increase was primarily due to approximately 5% inflation in our commodity basket costs led by beef inflation, partially offset by menu price increases and the effectiveness of improved operations. Cost of sales increased by $11.4 million, or 6.4%, to $189.0 million during the twenty-six weeks ended June 30, 2026, from $177.6 million during the comparable twenty-six-week period of 2025. As a percentage of revenues, cost of sales increased to 25.3% for the current twenty-six-week period from 24.9% for the prior year comparable period. The increase was primarily due to approximately 3% inflation in our commodity basket led by beef inflation, partially offset by menu price increases and the effectiveness of improved operations. Labor and Benefits. Labor and benefit costs for our restaurants increased by $5.0 million, or 3.8%, to $134.3 million during the thirteen weeks ended June 30, 2026, from $129.4 million during the comparable thirteen-week period of 2025. As percentage of revenues, labor and benefit costs decreased to 34.5% for the current thirteen-week period from 35.4% for the prior year comparable period. The change was primarily driven by a 1.6% reduction due to leveraging our fixed costs over a higher revenue base, partially offset by a 0.7% increase due to wage inflation. Labor and benefit costs for our restaurants increased by $9.2 million, or 3.6%, to $264.2 million during the twenty-six weeks ended June 30, 2026, from $255.0 million during the comparable twenty-six-week period of 2025. As a percentage of revenues, labor and benefit costs decreased to 35.4% for the current twenty-six-week period from 35.7% for the prior year comparable period. The change was primarily driven by a 1.3% reduction due to leveraging our fixed costs over a higher revenue base, partially offset by a 0.6% increase due to wage inflation, 0.2% increase in taxes and benefit costs, and 0.1% increase in workers' compensation costs. Occupancy and Operating. Occupancy and operating expenses increased by $5.3 million, or 6.4%, to $88.6 million during the thirteen weeks ended June 30, 2026, from $83.3 million during the comparable thirteen-week period of 2025. As a percentage of revenues, occupancy and operating expenses are unchanged at 22.8% for the current thirteen-week period and the prior year comparable period. This resulted from a 0.2% increased investment in marketing, offset by a decrease of 0.2% in rent and related costs due to our ability to leverage our fixed costs over a higher revenue base. Occupancy and operating expenses increased by $6.6 million, or 4.0%, to $169.8 million during the twenty-six weeks ended June 30, 2026, from $163.2 million during the comparable twenty-six-week period of 2025. As a percentage of revenues, occupancy and operating expenses decreased to 22.7% for the current twenty-six-week period from 22.9% for the prior year comparable period. This was primarily driven by a decrease of 0.2% in rent and related costs due to our ability to leverage the fixed nature of these costs over a higher revenue base. General and Administrative. General and administrative expenses increased by $4.6 million, or 21.1%, to $26.3 million during the thirteen weeks ended June 30, 2026, from $21.8 million during the comparable thirteen-week period of 2025. The change was led by $1.4 million of legal and leadership transition expenses, $1.2 million related to higher stock-based compensation led by forfeitures in 2025 that reduced the expense, and $1.0 million related to our non-cash deferred compensation liability. As a percentage of revenues, general and administrative expenses increased to 6.8% for the current thirteen-week period from 5.9% for the prior year comparable period. This increase was primarily due to the increase in the aforementioned expenses. General and administrative expenses increased by $4.8 million, or 11.0%, to $48.3 million during the twenty-six weeks ended June 30, 2026, from $43.5 million during the comparable twenty-six-week period of 2025. The change was led by $1.4 million of legal and leadership transition expenses, $1.3 million related to stock-based compensation led by forfeitures in fiscal 2025 that reduced the expense, $0.6 million related to our non-cash deferred compensation liability, and $1.2 million in subscription costs as we focus on laying the foundation for our technology infrastructures. As a percentage of revenues, general and administrative expenses increased to 6.5% for the current twenty-six-week period from 6.1% for the prior year comparable period. This increase was primarily due to the increase in the aforementioned expenses. Depreciation and Amortization. Depreciation and amortization increased by $2.2 million, or 11.8%, to $21.0 million during the thirteen weeks ended June 30, 2026, compared to $18.7 million during the comparable thirteen-week period of 2025. This increase is primarily due to increased capital expenditures related to our restaurant maintenance and remodel programs. As a percentage of revenues, depreciation and amortization increased to 5.4% for the current thirteen-week period from 5.1% for the prior year comparable period. Depreciation and amortization increased by $6.8 million, or 18.2%, to $43.8 million during the twenty-six weeks ended June 30, 2026, compared to $37.0 million during the comparable twenty-six-week period of 2025. The increase included a $2.7 million catch-up adjustment to depreciation expense recorded in the first quarter of 2026. As a percentage of revenues, depreciation and amortization increased to 5.9% for the current twenty-six-week period from 5.2% for the prior year comparable period. Restaurant Opening. Restaurant opening expenses decreased by $0.1 million to $0.1 million during the thirteen weeks ended June 30, 2026, compared to $0.2 million during the comparable thirteen-week period of 2025. 17 Restaurant opening expenses decreased by $0.6 million to $0.1 million during the twenty-six weeks ended June 30, 2026, compared to $0.7 million during the comparable twenty-six-week period of 2025. For both periods, this decrease in restaurant openings was primarily due to the timing of openings. Loss on Disposal and Impairment of Assets, Net. Loss on disposal and impairment of assets, net, was $1.0 million during the thirteen weeks ended June 30, 2026, compared to $0.2 million during the comparable thirteen-week period of 2025. Loss on disposal and impairment of assets, net, was $2.8 million during the twenty-six weeks ended June 30, 2026, compared to $0.4 million during the comparable twenty-six-week period of 2025. For both periods, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date and costs incurred for previously closed locations. Interest Expense, Net. Interest expense, net, was $0.8 million during the thirteen weeks ended June 30, 2026, compared to $1.3 million during the comparable thirteen-week period of 2025. Interest expense, net, was $1.9 million during the twenty-six weeks ended June 30, 2026, compared to $2.5 million during the comparable twenty-six-week period of 2025. For both periods, this decrease in interest expense, net, was primarily due to a lower outstanding debt balance. Other Income, Net. Other income, net, was $1.4 million during the thirteen weeks ended June 30, 2026, compared to $3.8 million during the comparable thirteen-week period of 2025. Other income, net, was $0.9 million during the twenty-six weeks ended June 30, 2026, compared to $3.7 million during the comparable twenty-six-week period of 2025. For both periods, this decrease in other income, net, was primarily related to a payroll tax credit in the prior year, offset by increases in the cash surrender value of certain life insurance policies. Income Tax Expense. Our effective income tax expense rate for the thirteen weeks ended June 30, 2026, was 1.3% compared to 6.3% for the comparable thirteen-week period of 2025. Our effective income tax expense rate for the twenty-six weeks ended June 30, 2026, was 1.0% compared to 4.4% for the comparable twenty-six-week period of 2025. The effective tax rate expense for the thirteen and twenty-six weeks ended June 30, 2026 and July 1, 2025, was different than the statutory rate primarily due to FICA tax tip credits. LIQUIDITY AND MATERIAL CASH REQUIREMENTS The following table provides, for the periods indicated, a summary of our key liquidity measurements (dollars in thousands): June 30, 2026 December 30, 2025 Cash and cash equivalents $ 14,427 $ 23,781 Net working capital $ (132,426 ) $ (112,850 ) Current ratio 0.3:1.0 0.4:1.0 Our capital requirements are driven by our fundamental financial objective to drive shareholder return through a balanced approach of new restaurant expansion plans, enhancements and initiatives focused on existing restaurants and return of capital to our shareholders through our share repurchase program. Based on current operations, we believe that our current cash and cash equivalents, coupled with cash generated from operations and availability under our credit agreement will be adequate to meet our capital expenditure and working capital needs for at least the next twelve months. Our future operating performance will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Similar to many restaurant chains, we typically utilize operating lease arrangements (principally ground leases) for our restaurant locations. We believe our operating lease arrangements provide appropriate leverage for our capital structure in a financially efficient manner. However, we are not limited to the use of lease arrangements as our only method of opening new restaurants and from time to time have purchased the underlying land for new restaurants. We typically lease our restaurant locations for periods of 10 to 20 years under operating lease arrangements. Our rent structures vary from lease to lease but generally provide for the payment of both minimum and contingent (percentage) rent based on sales, as well as other expenses related to the leases (for example, our pro-rata share of common area maintenance, property tax and insurance expenses). Many of our lease arrangements include the opportunity to secure tenant improvement allowances to partially offset the cost of developing and opening the related restaurants. Generally, landlords recover the cost of such allowances from increased minimum rents. There can be no assurance that such allowances will be 18 available to us on each project. From time to time, we may also decide to purchase the underlying land for a new restaurant if that is the only way to secure a highly desirable site. Currently, we own the underlying land for our Texas brewpub locations. We also own parcels of land adjacent to two of our restaurants. It is not our current strategy to own a large number of land parcels that underlie our restaurants. Therefore, in many cases we have subsequently entered into sale-leaseback arrangements for land parcels that we previously purchased. We disburse cash for certain site-related work, buildings, leasehold improvements, furnishings, fixtures and equipment to build our leased and owned premises. We own substantially all of the equipment, furniture and trade fixtures in our restaurants and currently plan to do so in the future. CASH FLOWS The following tables set forth, for the periods indicated, our cash flows from operating, investing, and financing activities (in thousands): For the Twenty-Six Weeks Ended June 30, 2026 July 1, 2025 Net cash provided by operating activities $ 74,037 $ 66,900 Net cash used in investing activities (40,432 ) (37,019 ) Net cash used in financing activities (42,959 ) (30,013 ) Net decrease in cash and cash equivalents $ (9,354 ) $ (132 ) Operating Cash Flows Net cash provided by operating activities was $74.0 million during the twenty-six weeks ended June 30, 2026, representing a $7.1 million increase from the $66.9 million provided during the twenty-six weeks ended July 1, 2025. The increase over prior year is led by increased profitability after non-cash items. Investing Cash Flows Net cash used in investing activities was $40.4 million during the twenty-six weeks ended June 30, 2026, representing a $3.4 million increase from the $37.0 million used during the twenty-six weeks ended July 1, 2025. The increase versus prior year is primarily due to restaurant maintenance and remodels. The following table provides, for the periods indicated, the components of capital expenditures (in thousands): For the Twenty-Six Weeks Ended June 30, 2026 July 1, 2025 New restaurants $ 3,978 $ 4,506 Restaurant maintenance and remodels 34,022 32,076 Restaurant and corporate systems 1,108 474 Total capital expenditures $ 39,108 $ 37,056 We expect to fund our net capital expenditures with our current cash balance on hand, cash flows from operations and our line of credit. Our future cash requirements will depend on many factors, including the pace of our expansion, conditions in the retail property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords. Financing Cash Flows Net cash used in financing activities was $43.0 million during the twenty-six weeks ended June 30, 2026, representing a $12.9 million increase from the $30.0 million used in financing activities during the twenty-six weeks ended July 1, 2025. The increase in cash used is primarily due to higher repayments of borrowings, offset by lower share repurchases. OFF-BALANCE SHEET ARRANGEMENTS We do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow limited purposes. As of June 30, 2026, we are not involved in any off-balance sheet arrangements. 19 CRITICAL ACCOUNTING POLICIES The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses in the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. We continually review the estimates and underlying assumptions to ensure they are appropriate for the circumstances. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates. A summary of our other critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 30, 2025. During the twenty-six weeks ended June 30, 2026, there were no significant changes in our critical accounting policies.