Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 31, 2024, as updated in our Form 10-Q for the thirty-nine weeks ended September 30, 2025, 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 November 5, 2025, 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 100 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 a restaurant in the comparable base once it has been open for 18 months. 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 higher cost proteins or other higher cost items, or varying levels 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, 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.

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 Operations expressed as percentages of total revenues. The results of operations for the thirteen and thirty-nine weeks ended September 30, 2025 and October 1, 2024, are not necessarily indicative of the results to be expected for the full fiscal year. Percentages below may not reconcile due to rounding.

Thirteen Weeks Ended September 30, 2025 Compared to Thirteen Weeks Ended October 1, 2024

Revenues. Total revenues increased by $4.5 million, or 1.4%, to $330.2 million during the thirteen weeks ended September 30, 2025, from $325.7 million during the comparable thirteen-week period of 2024. The increase in revenues primarily consisted of $4.1 million related to sales from new restaurants not yet in our comparable restaurant sales base.

Cost of Sales.Cost of sales decreased by $1.8 million, or 2.0%, to $84.9 million during the thirteen weeks ended September 30, 2025, from $86.7 million during the comparable thirteen-week period of 2024. This decrease was primarily due to lower poultry and produce costs. As a percentage of revenues, cost of sales decreased to 25.7% for the current thirteen-week period from 26.6% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of improved operations and our cost savings initiatives.

Labor and Benefits.Labor and benefit costs for our restaurants increased by $1.6 million, or 1.3%, to $122.3 million during the thirteen weeks ended September 30, 2025, from $120.7 million during the comparable thirteen-week period of 2024. This increase was primarily due to $1.5 million related to higher workers' compensation insurance expense. Included in labor and benefits for the thirteen weeks ended September 30, 2025 and October 1, 2024, was approximately $0.6 million and $0.7 million, respectively, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. As a percentage of revenues, labor and benefit costs remained consistent at 37.1% for the current thirteen-week period and the prior year comparable period.

Occupancy and Operating.Occupancy and operating expenses increased by $1.3 million, or 1.6%, to $81.6 million during the thirteen weeks ended September 30, 2025, from $80.3 million during the comparable thirteen-week period of 2024. This was primarily due to increases of $1.0 million in property insurance, $0.9 million in utilities, $0.4 million in marketing-related expenses, and $0.3 million in credit card processing fees, offset by decreases of $0.8 million in supplies, $0.4 million in repairs and maintenance, and $0.2 million in delivery fees. As a percentage of revenues, occupancy and operating expenses remained consistent at 24.7% for the current thirteen-week period and the prior year comparable period.

General and Administrative. General and administrative expenses increased by $1.5 million, or 7.0%, to $22.4 million during the thirteen weeks ended September 30, 2025, from $21.0 million during the comparable thirteen-week period of 2024. This was primarily due to $1.4 million in stock-based compensation. General and administrative expenses during the thirteen weeks ended October 1, 2024 included a stock-based compensation credit related to the reversal of previously awarded stock-based compensation expense in conjunction with our leadership transition. Included in general and administrative costs for the thirteen weeks ended September 30, 2025 and October 1, 2024, was approximately $1.6 million and $0.2 million, or 0.5% and 0.1% of revenues, respectively, of stock-based compensation expense. This increase was primarily due to equity forfeitures associated with leadership changes during the thirteen-week period ended October 1, 2024. As a percentage of revenues, general and administrative expenses increased to 6.8% for the current thirteen-week period from 6.4% for the prior year comparable period.

Depreciation and Amortization. Depreciation and amortization increased by $1.1 million, or 6.1%, to $19.3 million during the thirteen weeks ended September 30, 2025, compared to $18.2 million during the comparable thirteen-week period of 2024. This increase was primarily due to depreciation expense related to our restaurants opened since the thirteen weeks ended October 1, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization increased to 5.8% for the current thirteen-week period from 5.6% for the prior year comparable period.

Restaurant Opening. Restaurant opening expenses were zero during the thirteen weeks ended September 30, 2025, compared to $1.1 million during the comparable thirteen-week period of 2024. This decrease 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 $0.6 million during the thirteen weeks ended September 30, 2025, compared to $0.3 million during the comparable thirteen-week period of 2024. For the thirteen weeks ended September 30, 2025 and October 1, 2024, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Interest Expense, Net. Interest expense, net, was $1.2 million during the thirteen weeks ended September 30, 2025, compared to $1.3 million during the comparable thirteen-week period of 2024. This decrease was primarily due to a lower weighted average interest rate year over year.

Other Income, Net. Other income, net, was $1.2 million during the thirteen weeks ended September 30, 2025, compared to $0.8 million during the comparable thirteen-week period of 2024. This change is primarily due to gains associated with the cash surrender value of certain life insurance policies.

Income Tax (Benefit) Expense.Our effective income tax rate for the thirteen weeks ended September 30, 2025, was a benefit of 146.5% compared to a benefit of 8.2% for the comparable thirteen-week period of 2024. The effective tax rate expense and benefit, respectively, for the thirteen weeks ended September 30, 2025 and October 1, 2024, was different than the statutory rate primarily due to FICA tax tip credits.

Thirty-Nine Weeks Ended September 30, 2025 Compared to Thirty-Nine-Weeks Ended October 1, 2024

Revenues. Total revenues increased by $30.8 million, or 3.0%, to $1.04 billion during the thirty-nine weeks ended September 30, 2025, from $1.01 billion during the comparable thirty-nine-week period of 2024. The increase in revenues primarily consisted of a 1.8%, or $17.7 million, increase in comparable restaurant sales and $14.8 million related to sales from new restaurants not yet in our comparable restaurant sales base, offset by $1.5 million related to closed restaurants. The increase in comparable restaurant sales was due to an increase in guest traffic of approximately 2.2%, offset by an average check decrease of approximately 0.4%, resulting from changes in daypart and channel mix, partially mitigated by menu price increases.

Cost of Sales.Cost of sales increased by $1.1 million, or 0.4%, to $262.5 million during the thirty-nine weeks ended September 30, 2025, from $261.5 million during the comparable thirty-nine-week period of 2024. This increase was primarily to support the higher sales at restaurants in our comparable restaurant sales base as well as our new restaurants. As a percentage of revenues, cost of sales

decreased to 25.2% for the current thirty-nine-week period from 25.8% for the prior year comparable period. This decrease was primarily due to lower commodity costs and the effectiveness of our cost savings initiatives.

Labor and Benefits.Labor and benefit costs for our restaurants increased by $5.3 million, or 1.4%, to $377.4 million during the thirty-nine weeks ended September 30, 2025, from $372.0 million during the comparable thirty-nine-week period of 2024. This increase was primarily due to $2.3 million related to higher management compensation, $1.9 million related to higher workers' compensation insurance expense, and $1.5 million in taxes and benefits, offset by $0.4 million related to lower hourly labor. Included in labor and benefits for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, was approximately $1.9 million and $1.8 million, respectively, or 0.2% of revenues, of stock-based compensation expense related to equity awards granted in accordance with our Gold Standard Stock Ownership Program for certain restaurant management team members. As a percentage of revenues, labor and benefit costs decreased to 36.2% for the current thirty-nine-week period from 36.7% for the prior year comparable period. This decrease was primarily due to leveraging our comparable restaurant growth and improved labor efficiency driven by our cost savings initiatives.

Occupancy and Operating.Occupancy and operating expenses increased by $8.1 million, or 3.4%, to $244.8 million during the thirty-nine weeks ended September 30, 2025, from $236.7 million during the comparable thirty-nine-week period of 2024. This was primarily due to increases of $3.8 million in marketing-related expenses, $2.3 million in utilities, $1.6 million in repairs and maintenance, and $1.5 million in rent and related expenses, offset by decreases of $2.1 million in supplies. As a percentage of revenues, occupancy and operating expenses increased to 23.5% for the current thirty-nine-week period from 23.4% for the prior year comparable period. This increase was primarily related to our investment in increased marketing with the goal of driving incremental sales.

General and Administrative. General and administrative expenses increased by $1.4 million, or 2.1%, to $65.9 million during the thirty-nine weeks ended September 30, 2025, from $64.6 million during the comparable thirty-nine-week period of 2024. This was primarily due to increases of $2.0 million in external services, including consulting fees, and $1.6 million related to office expenses, offset by decreases of $2.4 million in legal fees. Included in general and administrative costs for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, was approximately $4.2 million and $4.4 million, respectively, or 0.4% of revenues of stock-based compensation expense. This reduction was due to equity forfeitures associated with leadership changes during the period. As a percentage of revenues, general and administrative expenses decreased to 6.3% for the current thirty-nine-week period from 6.4% for the prior year comparable period. This decrease was primarily due to our ability to leverage our fixed costs over a higher revenue base.

Depreciation and Amortization. Depreciation and amortization increased by $2.1 million, or 3.9%, to $56.3 million during the thirty-nine weeks ended September 30, 2025, compared to $54.2 million during the comparable thirty-nine-week period of 2024. This increase was primarily related to depreciation expense related to our restaurants opened since the thirty-nine weeks ended October 1, 2024, coupled with depreciation related to our remodeled restaurants. As a percentage of revenues, depreciation and amortization remained consistent at 5.4% for the current thirty-nine-week period and the prior year comparable period.

Restaurant Opening. Restaurant opening expense decreased by $1.3 million, or 66.9%, to $0.7 million during the thirty-nine weeks ended September 30, 2025, compared to $2.0 million during the comparable thirty-nine-week period of 2024. This decrease 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 $0.9 million during the thirty-nine weeks ended September 30, 2025, compared to $3.0 million during the comparable thirty-nine-week period of 2024. For the thirty-nine weeks ended September 30, 2025, these costs primarily related to disposals of assets in conjunction with initiatives to keep our restaurants up to date. For the thirty-nine weeks ended October 1, 2024, the cost primarily related to the impairment and reduction in the carrying value of the long-lived assets related to one of our restaurants, coupled with the disposals of assets in conjunction with initiatives to keep our restaurants up to date.

Interest Expense, Net. Interest expense, net, decreased by $0.3 million to $3.7 million during the thirty-nine weeks ended September 30, 2025, compared to $4.0 million during the comparable thirty-nine-week period of 2024. This decrease was primarily due to a lower weighted average interest rate year over year.

Other Income, Net. Other income, net, was $4.9 million during the thirty-nine weeks ended September 30, 2025, compared to $4.2 million during the comparable thirty-nine-week period of 2024. This change is primarily related to an increase in income related to a payroll tax credit, compared to prior period, coupled with lower net loss due to our reduced equity investment ownership.

Income Tax Expense (Benefit).Our effective income tax rate for the thirty-nine weeks ended September 30, 2025, was an expense of 0.5% compared to a benefit of 15.0% for the comparable thirty-nine-week period of 2024. The effective tax rate expense and benefit, respectively, for the thirty-nine weeks ended September 30, 2025 and October 1, 2024, 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):

Our capital requirements are driven by our fundamental financial objective to improve total 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. We expect to accelerate restaurant openings in 2026 with two restaurant openings planned for the second half of the year. In addition, we want to maintain a flexible balance sheet to provide the financial resources necessary to manage the risks and uncertainties of conducting our business operations in the restaurant industry. In order to achieve these objectives, we use a combination of operating cash flows, debt, and landlord allowances.

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 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):

Operating Cash Flows

Net cash provided by operating activities was $92.0 million during the thirty-nine weeks ended September 30, 2025, representing a $22.1 million increase from the $69.8 million provided during the thirty-nine weeks ended October 1, 2024. The increase over prior year is primarily due to improved net income, the timing of accounts payable payments and accounts receivable receipts.

Investing Cash Flows

Net cash used in investing activities was $58.5 million during the thirty-nine weeks ended September 30, 2025, representing a $2.6 million decrease from the $61.0 million used during the thirty-nine weeks ended October 1, 2024. The decrease over prior year is primarily due to the number of new restaurant openings offset by the timing of restaurant remodel activity.

The following table provides, for the periods indicated, the components of capital expenditures (in thousands):

As of November 5, 2025, we have opened one new restaurant and currently plan to remodel approximately 20 existing locations in fiscal 2025. We currently anticipate our total capital expenditures for fiscal 2025 to be approximately $65 million to $75 million. This estimate includes costs to open new restaurants and remodel existing locations and excludes anticipated proceeds from tenant improvement allowances. 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 $34.2 million during the thirty-nine weeks ended September 30, 2025, representing a $14.7 million increase from the $19.5 million used during the thirty-nine weeks ended October 1, 2024. The increase over prior year is primarily due to the increase in share repurchases, partially offset by the increase in proceeds from stock option exercises and higher borrowings under our credit facility.

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 ("VIEs"), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow limited purposes. As of September 30, 2025, we are not involved in any off-balance sheet arrangements.

IMPACT OF INFLATION

Inflation has had an impact on our operations, new restaurant construction and corresponding return on invested capital. While we have been able to partially offset inflation and other changes in the costs of key operating inputs by gradually increasing menu prices, coupled with more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. Increases in inflation, including the effects of any tariff increases or other changes in trade policies on food and other restaurant operating and construction costs, could adversely affect our business, financial condition and results of operations. In addition, increases in inflation could have a severe impact on the United States and global economies, which will have an adverse impact on our business, financial condition and results of operations. Macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent to offset the effects of inflation. Whether we are able to continue to offset the effects of inflation will determine to what extent, if any, inflation affects our restaurant profitability in future periods.

SEASONALITY AND ADVERSE WEATHER

Our business is impacted by weather and other seasonal factors that typically impact other restaurant operations. Holidays (and shifts in the holiday calendar) and severe weather including hurricanes, tornadoes, thunderstorms, snow and ice storms, prolonged extreme temperatures and similar conditions may impact restaurant sales volumes in some of the markets where we operate. Many of our restaurants are located in or near shopping centers and malls that typically experience seasonal fluctuations in sales. Quarterly results have been and will continue to be significantly impacted by the timing of new restaurant openings and their associated restaurant opening expenses. As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for a full fiscal year.

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 31, 2024. During the thirty-nine weeks ended September 30, 2025, there were no significant changes in our critical accounting policies.