BJ's margin-focused plans work in concert with a number of sales-building roadmaps, starting with remodeling existing restaurants. The chain added seating capacity in seven stores and upgraded the bar area of a high-volume legacy location by modernizing the woodwork, moving taps to the back wall, and installing a 130-inch TV. Another bar remodel is scheduled for later in October. There are also plans to revitalize two patios in Q4 to increase the number of days the seating can be offered.
In terms of off-premises, BJ's is testing a more high-touch catering experience to help with corporate business, which tends to have bigger frequency and average check, Levin said. Catering grew roughly 75 percent against 2021 in the third quarter, and was more than double 2019 marks. For takeout, curbside, and delivery customers, the chain implemented a digital order tracker that's seeing a 75 percent usage rate among guests. As a nice touch, the tracker is in the form of a pint of beer that fills up with each step. The next goal is launching a new web-based ordering platform before the end of 2022. The design will then used to update the mobile app.
In the dining room, BJ's enhanced the functionality and reliability of server's handheld tablets. Additionally, the brand rolled out a digital call-ahead waitlist, which uses AI to determine and communicate wait times. The company has tested the technology for several months and hopes to launch it across the system in Q4.
"Our comprehensive strategy to grow sales, as I outlined in detail on our previous quarterly call, is working, even though we are only in the early innings," Levin said. "These sales initiatives over the long run will allow us to leverage the fixed costs inherent in our business to drive margin expansion."
BJ's has 214 restaurants nationwide after opening four units this year and recently closing a legacy small-format store that was no longer financially viable. Two more locations are projected to debut in the fourth quarter. Because of supply chain and construction delays, two units expected this year were pushed into Q1 2023. Since there's so much noise around inflation, equipment, permitting, and labor shortages, BJ's hasn't yer finalized its 2023 growth plans, but Levin believes it should be around six restaurant openings again.
The chain is continually weighing the value of opening a new restaurant versus remodeling an exist one. The time it takes to build a store has doubled from 130-150 days to 260.
"We still like the sales levels and returns we're getting from new restaurants, but because of the challenges of getting restaurants done timely and just the supply and demand, we continue to see elevated construction cost there," Levin said. "And while our sales-to-investment ratio are still above one based on the solid sales of new restaurants, it just makes us, frankly, kind of take a look across the board as to how we want to allocate capital at the current time where we want to have that right balanced approach of investing in new restaurants, knowing then that we got these high-return remodels, especially when we can add capacity and keep our concepts in a like new first-class and contemporary manner."
Total revenues increased 10.3 percent to $311.3 million in Q3. Adjusted EBITDA was $15.2 million, compared to $16.4 million in the year-ago period. The brand also saw a net loss of $1.6 million, compared to a net loss of $2.2 million in 2021.
Typically, BJ's sales jump from Q3 to Q4 because of the holidays. In 2019, average weekly sales per restaurant grew from $104,000 to $108,000, and the company expects a similar increase this year. Considering the higher sales, an additional 53rd week, and cost-saving opportunities, BJ's believes Q4 margins will be in the low-to-mid 12 percent range.