管理層發言
Good afternoon, and welcome to the BJ's Restaurants Fourth Quarter 2025 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Rana Schirmer, Director of SEC Reporting. Please go ahead.
Thank you, operator. Good afternoon, everyone, and welcome to our fiscal year 2025 Fourth Quarter Investor Conference Call and Webcast. After the market closed today, we released our financial results for our fiscal 2025 fourth quarter. You can view the full text of our earnings release on our website at www.bjsrestaurants.com. I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These statements are based on management's current business and market expectations, and our actual results could differ materially from those projections in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the company's filings with the Securities and Exchange Commission. We will start today's call with prepared remarks from Lyle Tick, our Chief Executive Officer and President; followed by Todd Wilson, our Chief Financial Officer, after which we will take your questions. And with that, I will turn the call over to Lyle Tick. Lyle?
Good afternoon, everyone, and thank you for joining us today. Q4 was another strong quarter for BJ's, delivering our sixth consecutive quarter of sales and traffic growth as well as our fifth consecutive quarter of profit and margin expansion. From a top line perspective, in Q4, we delivered 2.6% same-store sales growth, driven by 4.5% in traffic growth. On the profit side, we delivered 16.1% restaurant-level operating margins and 10% adjusted EBITDA margins, representing an improvement of 70 and 40 basis points, respectively, year-over-year. Given the strong performance in Q4 2024, I'm particularly proud of how the team worked together to deliver a strong finish to 2025. Worth double-clicking on is the implied check compression between the comp sales and traffic in Q4. Our traffic momentum builds on the progress we have made throughout the year and underlines the continued improvements in operations, the resonance of the Pizookie Meal Deal and BJ's relevancy in the holiday and social splurge occasion. Two additional drivers in Q4 beyond these foundational elements are the buzz around our LTO Pizookies, which brought in a hard-to-reach younger demographic and drove an increase in the number of what we call Pizookie trial checks as well as our continued outperformance in late night. While both of these occasions carry a lower dollar check, they help us continue to introduce BJ's to new customers, give existing guests new reasons to come back and sustainably grow sales and profit dollars. For the full year 2025, on the sales side, we ended at 2% same-store sales growth, driven by 2.8% in traffic. And from a profit perspective, we landed at 15.5% restaurant-level operating margins and 9.6% adjusted EBITDA margins, representing an improvement of 110 and 100 basis points, respectively, year-over-year. As I talked about previously, 2025 was a year of strengthening foundations and learning, guided by our 4 strategic priorities. We created alignment, understanding and shared ownership of our strategy. We built trust, improved accountability and showed resilience when encountering performance challenges. We added 3 strong new leadership team members who have integrated well and made a difference with Jen Jaffe, our Chief People Officer; Tom Kowalski, our Chief Supply Chain Officer; and most recently, Todd Wilson, our Chief Financial Officer. We clarified our growth drivers and continue to refine how to leverage them most effectively. In Q4 specifically, the combination of better execution, value rooted in the Pizookie Meal Deal and compelling product news driven by seasonally relevant Pizookies and the renovated pizza platform allowed us to continue to deliver strong traffic-driven growth. We evolved our marketing strategy, leaning more heavily into social and word of mouth to support our product news, while leveraging broader paid channels to deliver value through the Pizookie Meal Deal messaging, further refining how we deploy media and message most effectively. Throughout Q4, consistent with 2025 overall, our key metrics continued to build confidence in our progress with improvements across our NPS scores, our team member retention, operational metrics and frequency across age and income cohorts. Some key callouts with respect to Q4. On the team member experience side, we completed the rollout of our new manager and hourly team member training. On the menu front, we built on our seasonal Pizookie momentum with 2 successful LTOs with the return of the Monkey Bread Pizookie and the introduction of the Dubai Chocolate Pizookie, which also had an accompanying Martini. We launched the renovated pizza platform, which is resonating well with guests and performing consistently with what we saw in test markets with incidents up just under 10% and check-in margin in line with expectations. We ended 2025 with a net reduction of 6 menu items and 4 ingredient SKUs. From a brand perspective, our marketing teams continue to do a great job optimizing how we deploy our media and messaging. In Q4, we leaned more heavily into word of mouth and social with relevant product news, which drove significant dialogue, interest and trial as reflected in our traffic numbers. Together, these launches generated a 4x increase in Pizookie impressions quarter-over-quarter, outperforming what had previously been our strongest social performance with Spooky Pizookie in Q3. It also drove overall organic social impressions up 12x year-over-year in Q4. On the operations front, we continue to lean into our core initiatives to drive everyday table stakes improvements and made further progress across our key guest and team member metrics with NPS recommend scores up just under 10% in the fourth quarter, led by improvements in pace, value and food scores. We deployed our AI-based activity-based labor model to 30% of the system at the year-end and intend to deploy to the full system in 2026 and pilot a follow-on use case. With respect to Keeping Our Atmosphere Fresh, in 2025, we completed 19 remodels, bringing the total to just shy of 50% of our pre-2016 fleet as of year-end. We also modernized our facilities program, tagging and tracking all of our equipment, moving from a more reactive to a more planful approach to ensuring that our team members have the tools they need to deliver on our high standards, and we can put our best foot forward with our guests. As we enter 2026, we've continued to see positive momentum in the business. While calendar shifts and weather always create noise in Q1, I'm pleased with our performance so far in the quarter and our performance versus Black Box, which continues to outperform on both sales and traffic year-to-date. As I look ahead through 2026, I'm confident in our plans, and we remain focused on delivering consistent growth and improving shareholder value by putting the guest and team member at the center of everything we do. Our 4 strategic priorities remain unchanged. We will continue to focus on Investing in our People, ensuring they have the tools and support needed to bring our brand to life every day. We will advance our operational excellence initiatives focused on making BJ's better and easier for both team members and guests. We will progress our menu renovation work and set the foundation for future net unit growth. Our team members are the heart and soul of BJ's. In 2026, our key priorities with respect to the team member experience will be training, embedding the new manager and team member training, ensuring our teams have the right support to deliver for our guests, leadership development, refreshing our high-potential development programs as we continue to build restaurant and above-restaurant management pipeline to support future growth and culture, continuing to build engagement and alignment around our values and behaviors. With respect to Handcrafted Food and Beverage, we will progress our menu renovation work across our priority categories. We kicked off the year building on 2025 momentum with the Butterfinger seasonal Pizookie, our first LTO pizza with Mike's Hot Honey, which quickly became our third most popular flavor out of 9 and a Korean Sticky Rib appetizer leveraging an existing wing sauce and ribs to create an easy and craveable new option. We also removed 2 lower-performing items that were heavy on single-use SKUs, which resulted in the removal of 5 single-use ingredient SKUs. As we move forward in 2026, our culinary priorities will be to continue to drive buzz and engagement with seasonal Pizookies, and I'm excited about the pipeline we've built, continue to renovate our core categories, refresh strong sellers with clear NPS and executional opportunities, and continue to find opportunities to simplify while maintaining and protecting the turf coverage that allows us to win across so many occasions and consumer groups. We're currently in market in the early stages of testing refreshes to our burger category and chicken sandwiches. Our culinary team has been hard at work, and we have a pipeline of category and core item improvement tests that will follow suit. These refreshes are still in their early stages. And like we did with pizza, we will follow a structured approach to gain operational and guest feedback and make adjustments ahead of rollout. And also like with pizza, I will provide further updates as appropriate. Our third priority is Delivering WOW Hospitality. Our focus in 2026 is to build off the foundations we've laid and continue to improve our guest satisfaction, throughput and efficiency. We'll continue to focus on great fundamentals and not seeding conceded ground by continuing to drive accountability through our directors of operations and GMs, having clear and consistent KPIs, lifting up our outliers and driving best practices. Our simplification team continues to work to remove unnecessary barriers and complications, things like integrating Apple Pay into pay at the table, simplifying split check procedures for our team members, simplifying Pizookie and cocktail ordering and ringing in processes and so on. As mentioned previously, we'll continue to advance our technology initiatives to help our GMs and managers have the right people in the right place at the right time. 2026 is an important year for our fourth strategic pillar, keeping our atmosphere fresh. We're going to continue to invest in our remodel program, which has shown strong results and pilot a refreshed BJ's prototype, setting the foundations to grow our restaurant portfolio. With the progress we're making on the core business, we're now laying the groundwork to reignite net unit growth. We're actively building a flexible pipeline as we target up to 2 new openings in the second half of '26 to pilot a refreshed prototype and set the foundation for further growth in 2027 and beyond. You will see this reflected in our capital allocation for 2026, which Todd will talk about in more detail. Before I close, I would like to once again express my thanks to all our BJ's team members from our restaurants through the support center for their passion and commitment. I'm proud of the progress we made in 2025 and excited about the road ahead. I will now turn it over to Todd to provide further color on how we closed the year and our 2026 outlook.
Thank you, Lyle, and good afternoon, everyone. As Lyle has just outlined, the BJ's brand and business are healthy and thriving. In fiscal 2025, BJ's delivered growth across all key financial measures, sales, traffic, restaurant level profit, net income, EPS and adjusted EBITDA. Comparable restaurant sales increased 2%, restaurant-level profitability increased 110 basis points to 15.5% and adjusted EBITDA increased 14.5% to $134.1 million. Turning now to the fourth quarter. In the fourth quarter, we generated total revenue of $355.4 million, a 3.2% increase versus last year. Comparable restaurant sales increased 2.6%, led by 4.5% traffic growth and a 1.9% lower average check led by the drivers Lyle outlined earlier. Restaurant-level operating profit increased from 15.4% last year to 16.1% this year, led by the leverage benefit of growing sales and continued efficiency gains captured by our operators. Cost of sales was 25.5%, 40 basis points favorable to last year. The favorability was led by menu price increases and continued gains from our gross to net initiative focused on simplifying the efforts of our team members and more consistent execution for guests. This favorability outweighed food cost inflation led by beef costs of approximately 14% higher than last year and increases in produce costs, partially offset by favorable poultry prices. Total labor expense is 35.8% of sales in the fourth quarter. While this result is unchanged versus last year, our restaurant teams continue to operate more efficiently while also delivering higher guest satisfaction. The efficiency gains are a credit to the great work of our operators and overall simplification efforts with contribution from the activity-based labor management tool that is rolled out to approximately 30% of the system at year-end. These efficiency benefits were offset by increased bonus costs for restaurant management as a result of the sales and profit growth, and we continue to see higher workers' compensation expense due to rising medical costs despite our progress in reducing the number of claims. Occupancy and operating expenses, which include marketing, was 22.6% of sales in the fourth quarter, a 30 basis point improvement versus last year. Sales leverage more than outweighed inflationary pressure across the category. General and administrative costs are $25.1 million and 7.1% of sales, an increase of 20 basis points compared to last year. The increase is a result of 2 primary factors. First, we determined that certain previously capitalized expenses no longer held future value and expensed them in the quarter. Second, we incurred costs related to different aspects of leadership transition, particularly in the finance function. Excluding these unusual expenses, our run rate for the quarter would have been approximately $22 million or 6.2% of sales, in line with expectations. Depreciation expense increased 30 basis points compared to last year as a result of our investments in restaurant renovations and new restaurant openings. These components delivered growth across all profitability measures. Net income in the quarter increased to $12.6 million in 2025 as compared to a loss of $5.3 million in 2024. Adjusted EPS increased 40% to $0.66 per diluted share from $0.47 last year. And adjusted EBITDA increased to $35.6 million, a 7.4% increase compared to $33.1 million last year. In the fourth quarter, we repurchased and retired approximately 167,000 common shares for $5.4 million. During fiscal 2025, we repurchased approximately 2 million shares at an average price of $33.80. With over $90 million of Board authorization to purchase additional shares remaining, we have significant capacity funded by the business' durable and growing cash generation to repurchase shares when the market price is at a meaningful discount to its intrinsic value. Importantly, our balance sheet remains healthy as we ended the fourth quarter with net funded debt of $61.2 million, comprised of a debt balance of $85 million and cash and cash equivalents of $23.8 million. Now turning to 2026. Our financial guidance for 2026 is as follows. First, comparable restaurant sales growth from 1% to 3%. We expect continued traffic growth and a marginal increase in average check as we anniversary promotions that affected check in 2025 and implement prudent pricing action to address inflation. I would note, comp sales results to date in the first quarter, including the impact of Winter Storm Ben in late January are in line with this annual guidance. Second, restaurant-level operating profit of $221 million to $233 million. We expect sales gains and further efficiency from initiatives, including gross to net and cost of sales, activity-based labor management and multiple initiatives from our supply chain team to drive this growth versus 2025 and outweigh approximately 2% to 3% inflation in our commodity basket, labor rates and other costs. Third, adjusted EBITDA of $140 million to $150 million. In addition to the restaurant-level operating profit, we anticipate total G&A costs will normalize near $90 million or 6.2% of sales, a 30 basis point improvement versus 2025. This G&A estimate is inclusive of approximately $11 million in stock-based compensation expenses. Fourth, capital expenditures of $85 million to $95 million. This is an accelerated pace from 2025 and represents incremental investments in IT and a restart of our new restaurant opening pipeline. On the new restaurant front, we expect to open up to 2 restaurants in the second half of 2026 with additional restaurants under construction in 2026 slated for 2027 opening. Fifth, we may repurchase up to $50 million of stock depending on market conditions. This is an important lever that demonstrates the cash-generating power of the business. We expect cash from operations to fund our CapEx, including an accelerated pace of new restaurant openings and have flexibility to return excess cash to shareholders through the share repurchase program or use it to further strengthen our balance sheet. As we demonstrated in 2025, we have the financial capacity and intent to put our capital to work, buying back stock when the market undervalues our shares. Finally, as we model the quarterly shape of 2026, I would note 2 items. First, inflation accelerated in the second half of 2025, led by beef commodities, and we expect that elevated inflation to carry through the first half of 2026 before moderating in the second half. Second, we expect a more even spread of G&A across the quarters in 2026 than 2025, resulting in a G&A increase in the first half of the year and reduction in the second half. While we expect to increase our profitability in all quarters, as a result of these factors, we expect growth to be more measured in the first half of the year then accelerate in the second half. In closing, 2025 was a tremendously successful year for the BJ's business. Financial results across all key measures increased significantly as the team executed across all aspects of the strategic plan. Congratulations, and thank you to our restaurant team members, field operators and everyone at the restaurant support center. As we look forward to 2026, we are confident in our strategic direction and our ability to continue to sustainably grow the business to create value for shareholders. With that, we'll turn the call over to the operator for questions.
分析師問答
The first question is from Jeffrey Bernstein with Barclays.
I wanted to discuss the components of our comparable sales. Clearly, the traffic is very strong and appears to be supported by significant value. However, you mentioned that the shift in mix seems to have decreased significantly in the fourth quarter. I'm curious about your current sales mix regarding value, however you define it, in comparison to a year ago. Are you satisfied with the balance between value and premium offerings, or do you think the value mix might be excessively high? I'm trying to understand the overall mix shift and your expectations as we look ahead to 2026.
Yes, I can start off with that. When looking at Q4, I personally wouldn't define it as having a significant emphasis on value. The Pizookie Meal Deal didn't play a notably larger role this quarter; however, it continues to perform well and grow. The difference between sales and traffic, which suggests a decrease in customer spending, was primarily influenced by the seasonal Pizookie we offered. People are visiting not just to buy Pizookies at a discount, but because they're interested in trying them. We've seen an influx of younger customers, which is encouraging since they're typically a challenging demographic to attract. If we can provide good operations, we hope more of these new customers will return. We're noting more transactions where customers are enjoying a Pizookie along with drinks rather than just ordering a main entree. We've observed positive shifts in our sales mix, and late-night offerings have continued to perform well in Q4. The factors leading to reduced spending in Q4 shouldn't necessarily be viewed as negative or driven by increased emphasis on discounts. Additionally, we made strategic decisions this holiday season, such as featuring salmon instead of ribeye due to steak prices, which affected our average check but improved our margins. Overall, I wouldn't say there has been a sudden increase in the focus on value compared to previous quarters.
I'll quickly mention two points to build on Lyle's comment about the trade down in check or lower check. It's essentially a math equation where we gained additional traffic at a lower average check, particularly with the seasonal Pizookies. Additionally, as we look ahead to 2026, we anticipate continued growth in PMD, which is beneficial for us as that value message appeals to guests. We do expect some ongoing trading down in check, but not to the extent we experienced in 2026, indicating we foresee some growth in net check. This is primarily due to pricing adjustments to counteract inflation.
Understood. Can you share what the commodity and labor inflation was in the fourth quarter and what your outlook is for the full year 2026?
Yes, absolutely. So the total basket in the fourth quarter was about 2.5%. We called out beef. We called out produce as the big drivers of the commodity basket. Labor was a similar ballpark between 2% and 3% in Q4. We think the first half of the year, quite frankly, will be in the 3% to 4% range in terms of total inflation. Those same drivers really drive the start of the year, but then we see that moderating in the back half.
The next question is from Brian Bittner with Oppenheimer & Company.
4% traffic growth in the fourth quarter, really impressive. I think it was your sixth straight quarter of positive traffic. And as you look to '26, your 1% to 3% same-store sales guidance, I think it clearly builds in a more balanced check and traffic, I think, and that's kind of what you just said to Jeff's question. And just in your internal models, how are you anticipating the overall comp trends could be throughout the year? Do you expect them to be pretty steady throughout the year? Is there any interesting drivers we should be aware of that happened post-first quarter?
I don't think there's anything we call out. There's obviously some movement in our internal models, but I don't think it's enough to call out. I go back to some of the comments we made in the call, Lyle commented on this, and I did as well that we're pleased with the start of the year. I pointed to our annual 1% to 3% guide and that our results to date are in line with that. And so that gives you a sense of what we're seeing at least so far in Q1. I know there's been thought internally and externally about anniversarying PMD, which the company did successfully back in 2025. And so we're always looking ahead to make sure that we're planful in those things. I think you see that in the fourth quarter with the seasonal Pizookies that kept that momentum going. So we try to be very planful there. But ultimately, I wouldn't call out anything as big movements within the quarters. But to be clear, we are looking to grow comp sales and expect to grow comp sales and traffic in every quarter.
Okay. And just a follow-up on the restaurant profit guidance, I think it assumes kind of a 50-ish basis point expansion in restaurant level margins. If you can just kind of confirm that. And you've been on this really strong margin expansion path recently. What's going to keep the margins expanding as we look forward in '26? If that 50 basis points is the right kind of base case, where is that coming from?
Yes, I'll start, and Todd, you can jump in. As we look at next year, I think there are three components to consider. First is delivering consistent sales growth and achieving some leverage on the top line. We've been focused on creating a more consistent and durable BJ's that can sustain this growth. Second, we will continue to emphasize the programs I've mentioned before, which include a strong core set of KPIs that we are using to drive accountability within our teams. Our goal is to improve the performance of our lower quartile and increase efficiency across the board. Ideally, we want everyone to become more efficient, especially those at the bottom. Third, we will keep our attention on gross to net, particularly in comp food and beverage, as it's a crucial area for us. Improved performance in this area indicates better execution, fewer issues with guests, and quicker table turnover. Additionally, as I mentioned earlier, we are in the process of rolling out the activity-based labor model, which will take place through 2026. We plan to implement this carefully to ensure proper learning and adoption from general managers, as we don't want to lose any progress. It might have a more significant impact in 2027. This model suggests we can save some hours, especially during slower periods, while needing more labor during peak times. Our main focus with this model is on consumer metrics and improvements in pace, food quality, and hospitality. While we were able to make significant advancements last year, we expect the level of expansion this year won't be as large. Though there are still improvements to be made, as we progress, we anticipate becoming progressively more efficient and effective, but the extent of these improvements will change over time.
Brian, to confirm, the 50 basis points you mentioned aligns with our expectations. Your calculations match ours.
The next question is from Sharon Zackfia with William Blair.
It's really interesting to continue to hear about the LTOs on the Pizookies bringing in younger demographics, and it sounds like it really accelerated for you in the fourth quarter. It may be too early, but what does engagement look like with those customers after they do come in for an LTO? Are you seeing kind of a tail of engagement with those cohorts?
You're right. Given the average frequency of our business in full service, it's too soon for me to confidently say yes or no. I want to have more time to assess. Overall, as we look ahead to 2025, we observed increases in frequency across various age and income groups, particularly among the younger and older demographics, and significantly among lower-income cohorts. These trends appear to indicate a correlation with the appeal of PMD and Pizookie. However, it's still too early for me to definitively confirm that.
That's completely fair. Are you doing something different in social media? Have you augmented your capabilities there? Or is that increase that you alluded to, is that just organic and coming from your consumers?
We have changed our approach to the market. We have added a new team member who excels in social interactions more than anyone else in the room. We have also evaluated our agency resources. Previously, our social media content was primarily produced by our brand and shared outwardly. Now, we have not only increased our investment in social media and influencer marketing but have also shifted the focus to content created by influencers rather than by our brand. This means that people are now speaking on behalf of us instead of just us speaking for ourselves.
Great. And then last question. Now that we've kind of fully lapped the meal deal, how does the weekend traffic look versus weekday?
As we look through Q4, we saw growth through Q4 of all dayparts grew with the highest growth coming from late night. But yes, I'm looking at it right now. So as we look at all dayparts grew and late night was the biggest grower with mid-afternoon and dinner being quite similar and lunch growing, but not quite to the same amount. So that's what we saw from a daypart point of view in Q4.
The next question is from Brian Mullan with Piper Sandler.
This is Allison Arfstrom on for Brian Mullan. On the refreshes to the burger category in chicken sandwiches, curious if you could speak more about what led to the decision on these 2 platforms? And then what opportunity might be there and if we should expect a similar timeline or stage gate process as the pizza relaunch?
Yes, working backwards, the process for bringing products to market will generally be similar. We will identify opportunities by analyzing our menu satisfaction, intent to reorder, and value perceptions. These factors help us pinpoint potential areas for improvement. Additionally, we consider which categories contribute significantly to sales. Initially, we will conduct some screening on major categories to ensure we are targeting the right consumer space. As we launch, we will rely on feedback from operations and guests. Much like with the pizza, I anticipate that some adjustments will be necessary once we gather this feedback. The process will remain consistent, though it's still early in the testing phase for me to share any significant insights.
The next question is from Todd Brooks with Benchmark StoneX.
First question, on the activity-based labor, I think you talked about a ratable rollout across the course of this year, 30% was in the barn last year. I mean by celebration season this year, you think you're kind of 50% penetrated with having it rolled out?
I don't know if we'll be all the way to 50%. I would say celebration season is probably the season where we are most cautious about creating disruption. So I think in the first half, we'll have some more rollout. I don't know if we'll get all the way to 50%. I think our windows for rolling something out that we have to kind of intake and get comfortable with. Q1 is a pretty good window and Q3 are pretty good windows. So it's not that we won't advance it at all, but we want to be really judicious about any disruption that we might cause during celebration season as GMs get used to it because there is a getting used to it, right, when you go now to getting that labor schedule from the AI and kind of learning how to balance the GM's overlay with AI. There's a bit of a learning process, which we've seen in terms of getting comfortable with it. So we'll be judicious about how much of that happens over celebration season.
And just kind of looking at some of the earlier units that have implemented the platform, you talk about wanting to see a bend higher in certain scores. Can you start to put a framework around how much improvement you do see once the store is on that platform?
I'm not going to provide specific numbers at this point. However, when I assess the progress, it's evident that we're seeing improvements across almost all our metrics when comparing the pre-post results to the control group. The most significant improvement is in pace, which is encouraging because it focuses on getting the right people in the right place at the right time. This is the area where I would like to see the most progress. Other metrics show movement as well, but to varying degrees. Pace has shown the most improvement, and as you might expect, it's a core metric for achieving the right staffing alignment.
Okay. Great. And the final one for me. Todd, you said earlier in Q&A that you continue to see the Pizookie Meal Deal grow. Can you talk to what mix looked like in the fourth quarter maybe versus what you were seeing in Q3 as far as percent of checks on PMD?
Yes, absolutely, Todd. When we look back at Q4, PMD grew almost 16% of checks in the fourth quarter. That was up almost 2% versus the fourth quarter a year ago and an increase versus Q3. So broadly, that platform continues to grow for us, which there's obviously been a lot of traffic associated with that over the last 5 or 6 quarters. So it's good to see that. That does come, Lyle hit on this. The check is just a little bit lower is what we see on the PMD checks. It's about 5% lower. So there's a little bit of a check trade-off there, but obviously, getting that traffic in is a big win for our business.
Yes. Additionally, the percentage margin of those checks closely resembles the percentage margin of our other checks. Throughout 2025, it averages about 15.5% for checks, with Q4 being slightly higher. When considering it as a percentage mix of sales, it is around 6%. This is for the full week, and as we have discussed previously, it holds true that during the week, the percentage is in the low 20s.
The next question is from Jon Tower with Citi.
I'm curious to hear that you are experiencing relatively strong late-night business. It's good to know. I'm wondering if you're implementing anything special to drive this compared to what you've done previously. Also, is this strength inclusive of the off-premise business?
Well, late night is growing. I'll let Todd discuss the channel mix because I don't have that information at the moment. Jon, I wish I could tell you that we were doing something particularly unique to drive the late-night business. I think we have a great environment and a solid offer with our happy hour available during late night. I've mentioned before that I believe some of this is based on supply and demand. Over the past few years, fewer people have been extending hours or returning to full hours, resulting in less late-night supply. I think we are seeing some demand returning, and we offer a better alternative for many during late night, which is helping us succeed. However, we don't have a specific marketing initiative or unique offer that's solely driving this growth.
Jon, it's Todd here. I'll provide some quick insights on the on-prem versus off-prem segments. When we separate our business into these two categories, the dine-in segment, which is the majority of our business this quarter, is performing very well. Dine-in traffic has increased by around 7%, indicating strong performance in that area. However, our off-prem business has experienced declines, which is not a new trend for the fourth quarter and has been a challenge for us in recent quarters. We have dedicated teams working to address this issue, but the strength of the dine-in business remains particularly strong.
Okay. Following up on the comment about late night, if you were to recover from an average weekly sales standpoint back to peak, how much more room do you have to go? Or better yet, how far has late night declined compared to your peak times or years?
I mean honestly, I don't have the number to hand of whether we're there or whether late night, if we look back, I assume we're talking like kind of pre-COVID like what the late night AUV was. I mean what I can say is as part of what we talked about in Q1, which is the continued momentum we're seeing in Q1, the shape of that continues to see particular strength in late night. So that has continued into this quarter. I don't know, Todd, if you have an insight in terms of specific AUV.
Jon, maybe we can tag those...
Okay. Hopefully, you guys can still hear me. Just one last question that I had. Okay, great. Just you had mentioned, obviously, you're going to be opening new stores in the back half of this year. Can you just speak to what the new prototype might look like, high-level features that are different versus the baseline they could even just be square footage. But I would assume there's probably a little bit of a differential even off-premise access to the stores versus maybe some of the legacy asset base that you have today and even the cost to build?
As we consider the new design, our goal is to create a modern representation of our brand that remains familiar to our loyal customers while also attracting new visitors. We are utilizing our brand positioning to guide this design, ensuring it feels both familiar and contemporary. We're incorporating some refreshed branding elements, particularly highlighting our craft beer heritage through updated features like silos. However, the overall experience will remain recognizable as BJ's. Regarding the size and structure of our new locations, I believe in finding the right size, cost, and location. The initial locations we establish will serve as prototypes, and as we advance, especially moving into 2027, we may explore varying square footage, potentially opting for smaller spaces in certain markets. We will also consider conversions in suitable areas rather than strictly adhering to a ground-up prototype each time. This flexibility will inform our design process as we establish comprehensive brand standards that are applicable across different sizes and shapes, all while maintaining the distinct BJ's look and feel. When evaluating the costs of building new units, we focus on ensuring they yield a strong internal rate of return (IRR), being mindful of construction costs and inflation. Our innovative design approach aims to take advantage of flexible components, enabling us to align build costs with expected sales, profits, and desired IRR. As a result, in some markets, you may encounter designs that closely resemble the current BJ's size, while in others, you could see smaller footprints or conversions aimed at maximizing our investment returns.
This concludes our question-and-answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.